Goodman Fielder Limited (GFF.AX) Page 1
This post goes out to Tom Engle, perhaps better known as TMF1000. Tom’s devotion to helping others become better investors is fantastic. He showed me the importance of keeping a good investment journal and I liked his style of ‘Page Xs’. One of the benefits of a journal is the edge that accumulated knowledge enables.
Here’s some more of Tom’s advice, this selection from his Motley Fool profile:
- There is no need to overweight your portfolio.
- Diversify over time.
- And remember when the market is going up everything looks wonderful and all of your decisions look good. All of that can change quickly when the market reverses itself.
- Market declines are our friends – it gives us a chance to buy bargains.
- New investors start out small. Buy small positions, so small you are not tempted to sell them, in fact, so small that when they drop you are more likely to add to them.
- Easing into the market in your formative years, is the best way in my opinion. You learn to grow a portfolio wisely and you don’t develop a strategy based on fear which hurts investors. A strategy based on fear generally relies too much on trading.
GFF.AX Page 1
This is a working document / notes
Let’s head over to Goodman’s recent filings
2009 AGM Provides a quick overview and a few high level numbers
2008/09 Shareholder Review
- Excellent company history
- Good operational overview
- Intangibles assets are high at 61%, $1,886M of $3,097M total assets. $170M write-down in 2008 caused the big earnings drop. Better dig into those intangible assets
- p97-98 for the intangibles. review for impairment annually and
- With 45% of revenues from NZ and Asia Pacific what affect will FX have this year? negligible according to history p88 note 5
- deprec and amort $55.5M, profit $182.7M capex $93.6M oe =$144.6M
| Market cap (M) | 2,133 |
| Net debt ($M) | 999.4 |
| Enterprise value ($M) | 3,132.1 |
| Shares Out | 1,355,069,000 |
- ev/oe 21.66 seems high, if I add the $19.3M from sale of PP&E then it’s still 19.1.
Why has the cash flow doubled while earnings have gone nowhere over the last four years, since GFF was re-floated? That also explains why the ev/oe is high while the Price to operating cash flow is low.
| GFF.AX per share | 6/06 | 6/07 | 6/08 | 6/09 |
| Sales ($) | 1.86 | 1.83 | 2.02 | 1.85 |
| Cash Flow (cents) | 10.9 | 18.5 | 15.9 | 21.4 |
| Earnings (cents) | 18.1 | 18.1 | 2.1 | 13.3 |
| Adj. Earnings(cents) | 69.6 | 16.8 | 17.0 | 13.1 |
| Dividends (cents) | 5.5 | 13.5 | 13.5 | 10.5 |
This super fast first quick look along with its chart makes me think stalwart with reasonable prospect of decent return, but not a compelling story to buy right now. More later. Please feel free to add any insights.
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Hi Dean, Tom Engle’s advice is good stuff.
I agree on GFF. When looked at in more detail, it is not compelling value now.
The REITS are getting back to good value for me. I got some SLF at 7.8 and will get some more at 7.0.
WDC I think is a buy at 10.00ish and it may get back to there when they cut their dividend and with the rising AUD. It has a nice business with barriers to entry but the US malls are suffering. That will turn around at some stage. It’s interesting to see the earnings growth and ROE has been in single digits since it was stapled but the price premium to the average PE has varied between 1.0 (now) to 2.7 (!) in the last 5 years. The book value is 12ish but there are maybe some more writedowns this year.
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