Contract miner Henry Walker Eltin Group Limited (HWE) said today its net profit rose 20.7% to $8.17 million for the six months to December 31, 2001. Revenue from ordinary activities was up 4.9% to $607.19 million. The result was below market expectations. An interim dividend of 3.5 cents a share has been declared, down 1.75 cents. Shares in HWE are trading at $1.28, down 36.5 cents or 22.2%.Profit up 20.7%, stock price drops 22.2%. Looks like they were expecting a profit in the area of 15 to 20 million $.
Shares in HWE are trading at $1.28, down 36.5 cents or 22.2%.BarcooIt's inexlicable isn't it ?? Time and time companies report good profits despite the overall economic difficulties and yet the share price falls. I've given up worrying about it and tend to focus on the company results rather than on the immediate share price move.RegardsHarmy
BarcooNot sure whether you would be interested but Campbell Bros Ltd (CPB) is an interesting company. They have a steady soap and industrial chemical business which provides a good profit and dividend. The other part of their business is in providing analytical laboratory services. It is this part which I find interesting. For some time now they have been aquiring laboratory service companyes around the world until now they are one of the biggest, if not the biggest, in the world.These labs provide a service to the mining industry and Campbell's, I am sure, are waiting until they are big enough when they will then push up the price of their services. I can see no other reason for them to aquire so many of these labs around the world.I first bought into Campbells a couple of years ago when the price was around $4.50 it stagnated around the $5 mark when I bailed out.Since then I notice the price has risen to around $6 which may indicate that the company is at last beginning to move.It is one of the companies I will be looking at in a couple of months.RegardsHarmy
Harmy,only had a cursory look at CPB but they look like a good, steady companypaying a good income stream.Slightly overpriced for my liking. I want them to be cheap & beaten down. Buffett's "margin of safety".I'm in the process of setting up my first "workout". Looks good to me. I'll fill you in when I'm set.
I'm in the process of setting up my first "workout". Looks good to me. I'll fill you in when I'm setBarcooNot sure what you mean by this but if it involves setting up a portfolio or something similar then I would be very interested.Within a couple of months I will be buying into a number of Oz companies so your proposals would be interesting.An exchange of ideas is what makes for an interesting board !!I emailed Wayjo the other day to see if he intended returning to the board - I really felt he had something to offer - his posts were always very perceptive. RegardsHarmy
I dont think I will ever be able to understand the way the market reacts to news, good or bad news is all in the perception ---. I hold HWE and that news wiped out a nice profit-- so why the heck is the market sulking?? A profit is good news isn't it? especially in a year when a lot of companies are making a loss! I think the way the market reacts to news is absolutely unpredictable- I bought LLC at 11.50 and a few days later there was news that they were going to develop the millenium site (which I thought was a lousy business decision) and the price spiked! when a little later there was an announcement thet they had won the contract for cleaning up ground zero( which I thought the market would be pleased with,) the price fell to bits and I sold at 13.15 because I couldnt see where I was going with it. I dunno--
Harmy,only had a cursory look at CPB but they look like a good, steady companypaying a good income stream.Slightly overpriced for my liking. I want them to be cheap & beaten down. Buffett's "margin of safety". ......... I must agree with you Barcoo----- way too dear at the moment. generally I am finding that at the moment good solid companies with reliable earnings and profits are overpriced imho. anyone else finding this? I dont like the possibility of too much downside so I'm a bit mean I guess.! FC.
CassI dont think I will ever be able to understand the way the market reacts to news, good or bad news is all in the perception ---It's mystifying isn't it ?? I've never been able to figure out why this happens.I must agree with you Barcoo-----way too dear at the moment.generally I am finding that at the moment good solid companies withreliable earnings and profits are overpriced imho.anyone else finding this? I'm sure there's a flaw in that line of thinking !! I seem to remember reading (I think it might have been Weinstein) that it is what the market thinks that is important - not what you personally think should happen to a stock. If the market perceives that good solid companies are the place to put it's money then don't go against the trend. I guess in the end it all comes down to fundamentals. There are still companies in the US trading with p/e's of 200 or more. It's madness !!RegardsHarmy
Not sure what you mean by this ...In Buffettese speak a "workout" is an arbitrage type situation.
I'm sure there's a flaw in that line of thinking !! I seem to remember reading (I think it might have been Weinstein) that it is what the market thinks that is important - not what you personally think should happen to a stock.Sorry Harmy but I'm sure there is a flaw in Weinstein's line of thinking. For short term trading it might not too far from the ball though.Are you familiar with Ben Graham's "Mr Market" story?
Are you familiar with Ben Graham's "Mr Market" story? BarcooNo !! - I must admit that you've got me there. I've read so much about Ben Graham's theory that I've never actually read his classic.I think it's about time I did though - I think my local newletter has a special on selected books. I'll see if it's still on offer.RegardsHarmy
The concept of Mr. Market goes something like this: imagine you are partners in a private business with a man named Mr. Market. Each day, he comes to your office or home and offers to buy your interest in the company or sell you his [the choice is yours]. The catch is, Mr. Market is an emotional wreck. At times, he suffers from excessive highs and at others,suicidal lows. When he is on one of his manic highs, his offering price for the business is high as well, because everything in his world at the time is cheery. His outlook for the company is wonderful, so he is only willing to sell you his stake in the company at a premium. At other times, his mood goes south and all he sees is a dismal future for the company. In fact, he is so concerned, he is willing to sell you his part of the company for far less than it is worth. All the while, the underlying value of the company may not have changed - just Mr. Market's mood. The best part of this entire arrangement: you are free to ignore him if you don't like his price. The next day, he'll show up at your door with a new one. For your interest, the more manic-depressive he is, the more opportunity you will have to take advantage of him [don't worry, he doesn't have feelings or mind being taken advantage of.] As long as you have a strong conviction of what the company is really worth, you will be able to look at Mr. Market's offers and reject or accept them... the choice is yours. This is exactly how the intelligent investor should look at the stock market - each security that is traded is merely a part of a business. Each morning, when you open up the newspaper, you can find Mr. Market's prices. It is your choice whether or not to act on them and buy or sell. If you find a company that he is offering for less than it is worth, take advantage of him and load up on it. Surely enough, as long as the company is fundamentally sound, one day he will come back under the sway of a manic high and offer to buy the same company from you for a much higher price. By thinking of stock prices in this way - as mere quotes from an emotionally unstable business partner - you are free from the emotional attachment most investors feel toward rising and falling stock prices. Before long, when you are looking to buy stock you will welcome falling prices. The only time you want to invite high stock prices is when you are eager to sell your securities for some reason. Thankfully, in most cases, you are free to wait out Mr. Market's emotional roller coaster until he offers a price that you consider equal to or higher than intrinsic value. This is perhaps your greatest advantage in your investments.
BarcooWell said !! - in other words the market is bi-polar and therefore irrational. Look at how it reacts to good news with falling prices.regardsHarmy
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