SPK - Spark NZ

[BlackPeter]

Yes - probably will be sub $2 ex-dividend. But no reason to sell at those levels, if the yield remains high. The question to ask is - will SPK recover to $3 or $4 in the next 2-3 years. My view is that it will, in which case, keep banking the divvy's and sit tight - possibly even buy. But definitely NOT sell.

Look - we understand your situation. You kept the shares all the way down, bnought some more and sit now on a significant unrealized loss. Ouch. Difficult to give in this situation unbiased advise.

So, just allow me one question. If we (and you, it appears as well) assume the shares are going to further drop - why would it not make more sense to sell them now and buy them cheaper when the trend change is in?

You are saying "hold as long as the yield is high". Hmm, yes, sure, but did you ever consider what happens to the SP as soon as they announce a yield reduction? Unlikely that you can sell them at that stage still for the currnt premium, isn't it?

Nobody is perfect - and I have been in similar situations as well (holding in a downtrend, not with Spark, though). From my experience it feels like a liberation after you have sold a downtrending share ... and after that you can book every further SP drop as a personal gain. Makes one feel much better. The other thing is - ones mind opens up, and you see immediately all these other opportunities where you could invest your money.

If you don't hold anymore, the question would be is Spark really the best place to park once money after reaching the bottom? So many opportunities around - and lets face it, while Spark was always too dear and undercapitalized ... it never sparkled with the brilliance of its board and management team. 

Anyway ... each to their own - and good luck on your investment yourney.

[LoungeLizard]

Look - we understand your situation. You kept the shares all the way down, bnought some more and sit now on a significant unrealized loss. Ouch. Difficult to give in this situation unbiased advise.

So, just allow me one question. If we (and you, it appears as well) assume the shares are going to further drop - why would it not make more sense to sell them now and buy them cheaper when the trend change is in?

You are saying "hold as long as the yield is high". Hmm, yes, sure, but did you ever consider what happens to the SP as soon as they announce a yield reduction? Unlikely that you can sell them at that stage still for the currnt premium, isn't it?

Nobody is perfect - and I have been in similar situations as well (holding in a downtrend, not with Spark, though). From my experience it feels like a liberation after you have sold a downtrending share ... and after that you can book every further SP drop as a personal gain. Makes one feel much better. The other thing is - ones mind opens up, and you see immediately all these other opportunities where you could invest your money.

If you don't hold anymore, the question would be is Spark really the best place to park once money after reaching the bottom? So many opportunities around - and lets face it, while Spark was always too dear and undercapitalized ... it never sparkled with the brilliance of its board and management team. 

Anyway ... each to their own - and good luck on your investment yourney.

No-one can pick the bottom of a downtrend, so I prefer not to make decisions about selling when businesses are at the bottom of the cycle. Yes, with the benefit of hindsight we can always find examples of when we should or should not have bought/sold, but my approach is to look through what is happening and towards the future.

In SPK'S case I feel Management are taking the necessary actions - reducing op-ex, deferring non-essential capex, bringing partners in, selling non core assets etc - and that in 2-3 years time they will be in a much better position as a company. And you have to think that the NZ recession will be temporary???

So no, selling and hoping to buy at a lower point is more for traders and short-term investors and not how I invest. I have a longer lens than most here and have seen downtrends come and go in most of my investments. Overtime, quality comes through and I don't doubt that will be the case with Spark.

It's interesting that those who appear to be the most hysterical about the SPK decline are in fact the non-holders. Sure, I don't like the paper loss, but as I say, if you take a long view and are confident that things will come right, there really isn't a need to panic sell.

A yield reduction to say, 18c, might push the SP to say, $1.80. Personally, based on my view on the future of Spark, I'd say that's a buy situation rather than a sell. Others of course will disagree. We won't know who is right for another 2-3 years.

Probably for another thread, but I'd say there's a good chance that the US will lead the world into a global recession within 6 months. There are signs of that now. In which case all shares are going to take a 20-25% haircut regardless of their relative strength. Maybe Spark, having already hit near rock bottom, might not be as affected to the same degree. Just a thought.

[entrep]

want to hear what the BoD and CEO have to say about turning this ship around but then it may be too late.

Why aren't they saying anything now? The downtrend and issues are not new. They talked about addressing things later this year only... WTF are they doing today?

So many opportunities around

I'm assuming off the NZX?

A yield reduction to say, 18c, might push the SP to say, $1.80.

Seems possible ex-div TBH

[Basil]

Maybe Spark, having already hit near rock bottom, might not be as affected to the same degree. Just a thought.

To be fair, you were confident it was near rock bottom at $3. 

[LoungeLizard]

To be fair, you were confident it was near rock bottom at $3.

That's not quite right, Basil. If you look back on my posts I certainly was saying that I felt Spark was oversold and that the SP didn't look right and would over time correct itself. I certainly didn't expect it would go this low - and it will go even lower ex dividend -   but that's not the same thing as being confident that it wouldn't.
My investment timeframe is long-term, so I probably should resist the impulse to speculate as to where the SP will be in 3-6 months - it's pretty much just a guess anyway. Longer term (2-3 years) I think Spark will have recovered a good deal of the paper losses that shareholders are currently seeing, and I'm pretty sanguine about that as the yield (even if/when cut) will be one of the best on the NZX in the meantime.

[Greekwatchdog]

To be fair, you were confident it was near rock bottom at $3.

Hmm, none of us are immmortasl investors Basil including yourself after HGH blunder you made amongst others..

In the end we all own our investment philosophies that we the investor needs to meet to our own expectations.

Sometime it helps if one is a little more pragmatic about these things. I suppose it depends on that respective persons timeline in wanting to maximise their investment whether they drop the bone when things don't work out as they expected...

[Basil]

Hmm, none of us are immmortasl investors Basil including yourself after HGH blunder you made amongst others..

Dodged a bullet there in 2024, buying in a downtrend, (a salient reminder of the risks involved with that is evidenced by the current HGH share price).  Very relieved to get out at breakeven inclusive of dividend received.    The key question here is this, is SPK a growth company or a no growth company ?
On Ferg's excellent analysis all the evidence suggests it's a no growth company.
No growth companies are easy to value for those who know how to value them.
P.S. When you make a mistake, and all of us do from time to time including you, the key is limiting your losses.  Getting out at breakeven is something I count as a win !

[Greekwatchdog]

Deleted.

[Red Baron]

On Ferg's excellent analysis all the evidence suggests it's a no growth company.

I am sure ze analysis of Herr Von Verg vill indeed be excellent....

There seems to be a focus on valuing SPK based on dividends.  I predict the dividend will be cut further than most analysts are expecting which undermines such valuations.

So better to focus on EPS as you say, given the dividend uncertainty.  I haven't run the numbers on future EPS

....From the anecdotes I am hearing,....

I'm not putting too much effort into the FA on SPK right now

.....Vhen he gets around to doing eet, zhat eez.....

RB

[BlackPeter]

I'm assuming off the NZX?

Both on the NZX as well as in other countries (plenty of opportunities in e.g. building industry, health and defence.

If we stay however on the NZX, I could say that most of the stocks trend currently better than Spark, but if you are looking for some solid investment opportunities trending upwards - what about e.g. (in no particular order and not complete) TRA, CDI, SEK, GNE, or even MCK (though just for a short term game)? ... and yes, there are plenty more currently down but with much better chances to start growing again (look into the agricultural and real estate sectors).

[Ferg]

I am sure ze analysis of Herr Von Verg vill indeed be excellent....

.....Vhen he gets around to doing eet, zhat eez.....

You have the memory of a goldfish.....

https://stocktalk.co.nz/index.php?topic=74.msg26101#msg26101

A high level review was done some time ago.  The no growth EPS story line and using debt to pay dividends has been proved .... more detailed FA will be conducted once more information becomes available and/or my interest is *sparked*.

Speak English Snoopy.  Your continued act is ...... contrived.

[Red Baron]

You have the memory of a goldfish.....

https://stocktalk.co.nz/index.php?topic=74.msg26101#msg26101

A high level review was done some time ago.  The no growth EPS story line and using debt to pay dividends has been proved .... more detailed FA will be conducted once more information becomes available and/or my interest is *sparked*.

Zhanks for zhat.  I have been told I zuffer from "post traumatc stress disorder", a consequence of the hyper concentration required to become a vighter pilot.  I hyper concentrate on ze present and obliterate ze past.

Nevertheless, I theenk zhis zite could do vith a better 'zearch' vacility to be zure!

Speak English Snoopy.  Your continued act is ...... contrived.

Your continued attempts to conflate me vith my arch nemesis is amusing.  I mean, take a rat, stick on a big nose and a couple of vloppy ears and vhat do you have?   Zhat 'creature' vhich must not be mentioned (vhich you nevertheless did) zhat zleeps on ze top of a doghouse all day!   He has no qualifications apart from zhose he imagines in his own fantasies.  And you say you vould rather engage vith that?

Vhat is zhis fascination vith cartoon characters anyway?   I vould bet if you vere zummoned to ze Vhitehouse and Donald Trump came out to zee you, ze first zhing you vould say eez
"Hey, what are you doing here.  I came to meet Donald Duck."

On ze other hand you have me, a 'real person'.  A zkilled vighter pilot of ze Jagdestaffel, vith instrument training and ze ability to assimilate data at an incredible rate.   Exactly ze skills needed to play ze ztock market.

Vurthermore as vell as being a 'master of attack' (taking a position), I am also a master of defence (getting out).   I am ze master of ze 'barrel roll' and also ze 'loop the loop'.  And I have ze zertificates to prove eet.  In vact at my last medical examination I vas officially certified as a "complete loopy."   Now I put it to you, who else can you engage vith having qualifications like zhat?

RB

[Left Field]

Interesting HUGE rebalancing day trades for SPK, over 58 mill shares crossed today at $1.99 VWAP

The  1 mnth chart begins to look interesting from a TA point .......

SPK is not for me..... but interesting to watch from the sidelines..

[seaweed]

ZZZZZZ Wake me up when it hits 2.40. But now that I have posted it will probably drop back.

[LoungeLizard]

ZZZZZZ Wake me up when it hits 2.40. But now that I have posted it will probably drop back.

If that's your average price then you may do well out of SPK in the next few weeks/months. Me, I've a got a bit to go yet before I can take a deep breath. Hopefully the divvy won't get cut too much in the meantime.