# TSI - Transfield Services Infrastructure



## MOSSuMS (5 March 2009)

Does anyone know why this stock has slid from support levels just under 90c down to 65c in the last few days?

I've been watching this stock for a while follwing an infrastructure presentation (ASX Investor Hour in Perth - skip to pages 36-38) to balance the portfolio and add an income play.

I was trying to pluck up the courage for a small buy if it broke lower, but this has surprised me, so long after their results. Has TSE had some more bad news, is there a power station issue, has the wind blown on thier farms for the last time, or are there more debt rumblings? The drop is so much greater than the general market...


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## MOSSuMS (15 March 2009)

Still none the wiser. Haven't found any rumours, no debt to refinance in the short term, and not aware of any issues with related parties.

ASX issue a speeding ticket on the 9th, and TSI said 'nothing to declare'. 

I was still too nervous, so held off.

Then TSI rose 27% on the 13th.

I'm sure the ASX will issue another ticket for this massive switch in direction, to which the response from TSI will be the same I presume.

I'm just putting it down to the switches we are seeing between fear versus greed at the moment. If you know different, let us know!


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## dirkdiggler444 (30 March 2009)

This seems like a great little fund, no debt refinancing issues until 2011, so no real concern there, and they are looking at a DIV of 12c, which 15% on current $0.80 SP.

Thats if they hold their predicted revenue, but they reconfirmed they are on track for holding that as recently as 9th Feb 09.  Also most of their revenue is contracted, so guaranteed income, and being mostly green power, things will be looking good for future.

What I'm chasing is anyone got some insights into this? as I've been holding a bit from a couple of months back, but thinking of investing more heavily.  I've gone through the last 2 quarters worth of reports, and besides one power station down on output, there's no bad news.  Anyone think differently??


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## MOSSuMS (15 May 2009)

Thanks Dirt Digger - I've been watching this for a long while and like what I see also, although Transfields issues cause some concern. I've not got in yet unlike yourself though - just not enough coverage due to their size

It's been steadily regaining it's sahre price strength, so I think I've missed the boat again - 65c would have been nice!

I wonder who will get the solar contracts the Gov announced in the bugdet, as there wasn't anything more for wind explicitly...


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## oldblue (15 May 2009)

I prefer the parent company, TSE.
Since the heavily discounted cash issue to repair the balance sheet - necessary largely due to the weakening of the AUD v USD, TSE's SP has put on over a dollar in the last three months.
I find it easier to see how big govt spending on infrastructure will benefit TSE rather than on TSI which is invested in existing assets.


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## dirkdiggler444 (18 May 2009)

I've got both TSE and TSI, have been trying to accumulate TSI at roughly the $1 SP level.

TSE has put on about $1.15 in last 3 months ($1.55 low to $2.70 high).  thats a 74% increase on its SP low of $1.55.

however TSI has put on $0.57 in less than 3 months, ($0.57 low to $1.14 high).  Thats a 100% increase on its SP low of $0.57.

so the average Joe should have made more money on TSI, over a shorter period of time too.

TSI has a predicted increase in EPS for the next 2-3 years, TSE is falling somewhat as contracts are tendered for and work is won or lost, or maybe more to do with currency markets and AUD vs USD as someone mentioned.  

TSI income is more fixed as like you said Old Blue, it's based on existing infrastructure with contracted income.  TSE should pick up, but the order books aren't as full as past years using their forecast EPS as a guide.  There may be other main factors that are affecting TSE's fall in EPS though.  not just workload.

What I am a bit unsure about though, is TSI's forecast DIV is higher than its forcease EPS according to Commsec data.  Can anyone explain how this is possible??


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## prawn_86 (18 May 2009)

dirkdiggler444 said:


> What I am a bit unsure about though, is TSI's forecast DIV is higher than its forcease EPS according to Commsec data.  Can anyone explain how this is possible??




Im fairly sure that the forecast divs are just based on the historic data, whereas the forecast earnings are based on profit guidances released by the company, so there is no doubt the div will fall.


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## oldblue (18 May 2009)

I don't know if it applies in TSI's case but in the past infrastructure funds such as MAP, MIG etc have been known to revalue their assets upwards, borrow on the increased value and increase distributions thereby.
Obviously not so easy in these conditions but might be possible if the assets are held at sufficiently low current levels and an accommodating banker can be found. Or if some asset(s) can be sold off at a good profit.


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## dirkdiggler444 (18 May 2009)

Ok, I understand both theories, but from memory reading the last earnings guidance (feb 09), the EPS is increasing relative to 08 figures, the forecast DIV has dropped somewhat though.  The bit i'm confused about is the DIV is higher (and has historically been) than the EPS.  

     2008 2009 2010 2011 
EPS  2.8  6.2   8.1  9.8 
DPS 18.5 12.0 12.2 12.7 


So what you said Prawn_86 about the DIV cut is possible, but that wouldn't expalin the historical 08 figures.  

Same with what you said oldblue, by revaluing and borrowing against, shouldn't that have EPS higher than DIV for at least one year??


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## oldblue (19 May 2009)

That would depend on whether or not the revaluation of assets figure was included in EPS, ie Does EPS consist purely of trading earnings only?
Anyone have the answer to that?


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## geea (25 October 2009)

*TSI Transfield Services Infrastructure*

TSI is one of my favorite stocks yet hasn't been doing much for a couple of months. To me it seems to be stable with a great div, can anyone tell me why this share isn't moving?


Geea.


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## MOSSuMS (26 October 2009)

*Re: TSI Transfield Services Infrastructure*



geea said:


> TSI is one of my favorite stocks yet hasn't been doing much for a couple of months. To me it seems to be stable with a great div, can anyone tell me why this share isn't moving?
> 
> 
> Geea.




It's been trending up quite nicely over the last two months so expect some resistance as it recovers back towards it's old levels (given its 'boring/infrastructure' label and stable earnings profile). I just wish I'd had the guts to get in at the 65c ish level when it felt dirt cheap! Kudos to anyone that did. I'm not a holder in this one but still taking a keen interest.

I feel it has good long term but steady prospects, as TSE picks up, if it can get more of it's quality wind site options developed before there is saturation in the wind part of the renewables market.

NB: It's also probably due to their paying out more than their profit (8.8c per share earnings, 12c distro) which has people worried by association, given the problems with other funds, however well manged this one is.


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## geea (26 October 2009)

*Re: TSI Transfield Services Infrastructure*



MOSSuMS said:


> It's been trending up quite nicely over the last two months so expect some resistance as it recovers back towards it's old levels (given its 'boring/infrastructure' label and stable earnings profile). I just wish I'd had the guts to get in at the 65c ish level when it felt dirt cheap! Kudos to anyone that did. I'm not a holder in this one but still taking a keen interest.
> 
> I feel it has good long term but steady prospects, as TSE picks up, if it can get more of it's quality wind site options developed before there is saturation in the wind part of the renewables market.
> 
> NB: It's also probably due to their paying out more than their profit (8.8c per share earnings, 12c distro) which has people worried by association, given the problems with other funds, however well manged this one is.




When the stock was falling in March i couldn't understand why. I already held at an ave of $0.88. When they fell i started buying more and bought all the way to the bottom.
It's been a great share for me and i believe when people start chasing yields again they will head for the $1.50 range. With a 12c div that still gives them an 8% return.

Here are my March purchases.

9/03/2009 BUY 5000 units TSI @ $.52 $2,621.90 5000 $0.00 Yes 
6/03/2009 BUY 4000 units TSI @ $.57 $2,301.90 4000 $0.00 Yes 
4/03/2009 BUY 4200 units TSI @ $.655 $2,772.90 4200 $0.00 Yes 


Geea.


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## MOSSuMS (22 December 2009)

Back up to the $1.10, and dividends look to be very similar to previous periods at the moment.

I just can't get excited by income stocks, and the whole renewables space is having headwinds (pardon the pun) with rec prices, ETS, lack of a global outcome... Now, if there were a 'peak wind' or 'peak renewables' scenario!

Apart from all that it has formed a good solid base above 90c, and I think $1.20 (from it's current 1.10) is on the cards early next year.

But I just need a bit more 'zing' in a trading stock, and I don't hold/invest my longer term stocks for income.


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## Julia (26 December 2009)

Just flicking through the stock threads, have had a look at TSI.  Aren't any of you who are holding this at all bothered by the huge debt level?


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## MOSSuMS (2 January 2010)

Julia said:


> Just flicking through the stock threads, have had a look at TSI.  Aren't any of you who are holding this at all bothered by the huge debt level?




As worrying huge debt levels go, this one is a pussy cat. It's always had a more conservative gearing than it's peers with an internalised structure (so no maq bank break fees or debt restructures looming) and was lucky with it's refinancing dates compared to the others.

But I hear you - the debt levels are what made these stocks sexy for a while, then made the 'best placed' (i.e. TSI) really cheap at the height of the GFC. If there's another shock then TSI might be a looker again, but the sector as a whole will take a long time to recover it's former gloss and we'll all be watching debt ratios if they lift.

Maybe they will be a good stock for the retiree baby boomers who want income? I just can't seem to peg a somewhat mixed strategy (coal+wind generation+water plants) and cloudy (excuse the pun) climate/energy future yet. So far the best stocks have actually been the contrarians, like coal...


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## So_Cynical (7 August 2010)

MOSSuMS said:


> Maybe they will be a good stock for the retiree baby boomers who want income? I just can't seem to peg a somewhat mixed strategy (*coal*+wind generation+water plants) and cloudy (excuse the pun) climate/energy future yet. So far the best stocks have actually been the contrarians, like coal...




Actually the majority of TSI's generating capacity is gas fired so with the wind assets there actually a reasonably clean generator, the debt issues seem to be well under control with the recent capital raising ($110 million @ 70 CPS) and 5 year debt extension...perhaps blue skys ahead. :dunno:

Interesting that in the recent rights issue only 32% of retail share holders took up there rights...it certainly seems as if most holders are only interested in TSI as an income stock, that and the fact that the SP has been in almost continuous decline, combined with the seemingly endless half on half dividend decreases...most retail holders would be pretty pissed off.

TSI Distributions

Dec-2007: 0.095
Jun-2008: 0.090
Dec-2008: 0.050
Jun-2009: 0.070
Dec-2009: 0.060
Jun-2010: 0.040
Forecast FY11 full distribution of 8.2 cents per security. :dunno:

While it would be terrible to have been holding TSI from the float in mid 2007 at $2.10 all the way down to 64 cents today...it just goes to show just how important timing really is when it comes to entry, and perhaps now is a great time for entry, debt ratio down to 51% etc...looking at the all data chart theres only 2 great entry oppertunitys, Feb-Mar 09 and nowish.



> Transfield Services’ additional investment in TSI Fund totals $43.2 million, which represents 61.8 million securities at 70 cents per security
> 
> On this additional investment, Transfield Services expects to receive a forecast annualised distribution yield of 11.7 per cent.




http://www.tsinfrastructurefund.com...firmation_of_Transfield_Services_guidance.pdf 

The Capital Structure Review Investor Presentation leaves me feeling very upbeat about the future for TSI...These guys have some great assets.

http://www.tsinfrastructurefund.com...al_Structure_Review_Investor_Presentation.pdf
~


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## So_Cynical (13 August 2010)

So_Cynical said:


> While it would be terrible to have been holding TSI from the float in mid 2007 at $2.10 all the way down to 64 cents today...it just goes to show just how important timing really is when it comes to entry, and perhaps now is a great time for entry.




Took my own advise today and entered TSI @ $0.61 .. sold out of VRL, added a little extra capital and plonked it all on TSI, happy to hold till it comes good and collect distributions along the way, TSI yielding over 13% at today's share price, and fundamentally in good shape with the recent capital raising, debt extension and asset sale.


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## Julia (13 August 2010)

So_Cynical said:


> Took my own advise today and entered TSI @ $0.61 .. sold out of VRL, added a little extra capital and plonked it all on TSI, happy to hold till it comes good and collect distributions along the way, TSI yielding over 13% at today's share price, and fundamentally in good shape with the recent capital raising, debt extension and asset sale.



When do you anticipate it's going to 'come good'?  It has been in a solid downtrend for three years!
No wonder the dividend is so high when you consider the debt level and the diminishing DPS and EPS!



> Capital Structure ($ 000s)
> Total Debt	771,183	Interest: 49,398
> Long Term Debt	722,500	(92% of capital)
> Preferred Stock	0
> ...


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## So_Cynical (14 August 2010)

Julia said:


> When do you anticipate it's going to 'come good'?  It has been in a solid downtrend for three years!
> No wonder the dividend is so high when you consider the debt level and the diminishing DPS and EPS!






> Capital Structure ($ 000s)
> Total Debt 771,183 Interest: 49,398
> Long Term Debt 722,500 (92% of capital)
> Preferred Stock 0
> Shareholders Equity 60,024 (8% of capital)




That must be dated info generated from last years annual...is it from Etrade?

The 3 year down trend chart tells a story...they floated at the top of the market with massive debt as was the norm then, and the SP has struggled ever since...the assets are good and the income is mostly regulated and solid as a rock.

As you know Julia...im a believer in timing and that there's a time to sell, a time to buy, and a time to hold....this is clearly to me anyway, time to buy.

ill post a screen shot and link to there 'Capital Structure Review Outcome Investor Presentation' released in May..it gives a post capital raising and asset sale picture of TSI http://www.tsinfrastructurefund.com...al_Structure_Review_Investor_Presentation.pdf
~


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## So_Cynical (17 September 2010)

So_Cynical said:


> (13th-August-2010)Took my own advise today and entered TSI @ $0.61 .. sold out of VRL, added a little extra capital and plonked it all on TSI, happy to hold till it comes good.






Julia said:


> (13th-August-2010) *When do you anticipate it's going to 'come good'?  It has been in a solid downtrend for three years!*
> No wonder the dividend is so high when you consider the debt level and the diminishing DPS and EPS!




Hey Julia...did you happen to notice today's intra day high of 0.675 and close of 0.67 ? looks like it took 5 weeks to "come good" assuming that you would consider 10% in 5 weeks "good" i certainly do.

I've done very well with some of my stocks following your lead of holding onto my winners and letting them run (HDF up 66% TRY up 31%) so perhaps you could also have some success with following my lead and trying a little bottom picking?

-----------------------------

The year to date chart below would seem to indicate a slight up trend has begun, certainly the longest running up trend TSI has seen in over a year, for mine the volume bars would seem to confirm the change in sentiment/trend...others may have there own opinion. :dunno: 
~


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## exgeo (4 October 2010)

*Re: OUTSTANDING BREAKOUT Alerts!!*

Not sure where I should post this, but I like the look of the chart of TSI, Transfield Services Infrastructure. 8.2c div for FY11 forecast as well. Been going down for ages, now consistently going up. End of technical analysis!


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## pedalofogus (27 October 2010)

Thanks for the chart exgeo.

This company really should be on the move up.  Investor sentiment was smashed when they announced the capital raising, and it was always going to take a long time to come back.

That seems to be happening slowly now.  It certainly seems to be undervalued by the market, so there should be some capital growth over the coming years.  The yield is also very attractive (even if it isn't as attractive as it used to be).  The yield could also be boosted by any distributions from LYA, which haven't been factored in anywhere at present.

There is also some potential for this to be a takeover target IMO.

Pedalofogus


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## So_Cynical (11 December 2010)

Surprising to see the SP fall so sharply on Friday :dunno: back down to 0.62 intra day, really surprising considering we are only a week or so away from the ex date 24th Dec, and really really surprising since the Distribution Guidance announcement on Thursday confirmed the distribution to be 0.041 (assuming operating conditions are in line with expectations.  )

http://www.tsinfrastructurefund.com/icms_docs/84905_FY11_Interim_Distribution_Guidance_and_DRP.pdf

TSI looks to be the dividend/distribution play of the week at these prices.  i mite even double dip :dunno: as i really should be doing a second entry about now...my biggest mistake over the last 8 months has been not selling at 9 or 10% its prob cost me 2 or 3 grand, waiting for the 15 or 17% that just never came. 
~


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## So_Cynical (18 February 2011)

So_Cynical said:


> i mite even double dip :dunno: as i really should be doing a second entry about now.




Today TSI was just too tempting, especially after the half yearly report the other day confirmed guidance for the coming half and overall wasn't to bad a report....considering the nature of the business etc....so i had a little average down/top up today at 0.59 

Half year highlights, half on corresponding half.


EBITDA up 11.9%
On track to meet FY11 earnings guidance of $104 million
Net debt and gearing down 2.5% (approx)
Cash headroom of $38.8 mill (Cash & Facility's)

Sure they have some issues to work thru and some challenges ahead and that is reflected in the SP and yield..and that just cant last, with today's low of 0.58 cents the yield is well over 13%

http://www.tsinfrastructurefund.com/icms_docs/88528_2011_Half_Year_Results__Presentation.pdf


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## So_Cynical (31 March 2011)

pedalofogus said:


> It certainly seems to be undervalued by the market, so there should be some capital growth over the coming years.
> 
> There is also some potential for this to be a takeover target IMO.
> 
> Pedalofogus




Pedalofogus made the call 6 months ago....and today came this Announcement.

"Transfield Services Infrastructure Fund receives indicative, conditional and nonbinding
approach from Ratchaburi Electricity Generating Holding PCL"

http://www.tsinfrastructurefund.com...haburi_Electricity_Generating_Holding_PCL.pdf

The 85 cents per share offer was responsible for today's 28.46% SP jump and more than likely mostly responsible for the 51%+ turn around in the TSI share price over the last 3 or so weeks.  (and i bet no one gets prosecuted)



So_Cynical said:


> (7th-August-2010) While it would be terrible to have been holding TSI from the float in mid 2007 at $2.10 all the way down to 64 cents today...it just goes to show just how important timing really is when it comes to entry, and perhaps now is a great time for entry, debt ratio down to 51% etc...looking at the all data chart there's only 2 great entry opportunity's, Feb-Mar 09 and nowish.







So_Cynical said:


> (13th-August-2010) Took my own advise today and entered TSI @ $0.61 .. sold out of VRL, added a little extra capital and plonked it all on TSI, happy to hold till it comes good and collect distributions along the way.






So_Cynical said:


> (18th-February-2011) Today TSI was just too tempting, especially after the half yearly report the other day confirmed guidance for the coming half and overall wasn't to bad a report....considering the nature of the business etc....so i had a little average down/top up today at 0.59




I'm going to hold until the SP hits 87 cents or the take over is completed, i need to hold my TSI shares until the 5 of Sept to get the CGT discount on my first parcel (the biggest parcel) also need to sell in the coming financial year as this years tax bill is already bigger than expected.

One of the often under estimated pluses of diversification is the fact that ya never know what's around the corner and the more diverse your portfolio is the more potential you get to exposure of the unexpected, and if your stock selection is good and your buy in price/s are low then the greater the unexpected and expected upside is....i reckon.

Chart below of my TSI activities.
~


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## So_Cynical (2 May 2011)

So_Cynical said:


> (13th-August-2010) Took my own advise today and entered TSI @ $0.61 .. sold out of VRL, added a little extra capital and plonked it all on TSI, happy to hold till it comes good and collect distributions along the way, TSI yielding over 13% at today's share price, and fundamentally in good shape with the recent capital raising, debt extension and asset sale.




With hindsight it turns out i would of been better off keeping this money in VRL, oh well  i sold almost all of the above parcel of shares today at 0.825 a 38%+ gross profit for holding almost 9 months....ill let the rest of my holding go in the takeover.

Winner #51 lifted my all trades expectancy from 0.63 to 0.67  winning trade %: 82.26% :grinsking


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## So_Cynical (6 July 2011)

The TSI takeover is now complete and i can report the following profits on the final sale of my remaining 3 parcels of shares.


34.53% Profit on my initial buy in
37.80% Profit on my first and only average down
55.47% Profit on my first and only dividend reinvestment

All in all a very satisfactory outcome. imp:
~


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## skc (6 July 2011)

So_Cynical said:


> The TSI takeover is now complete and i can report the following profits on the final sale of my remaining 3 parcels of shares.
> 
> 
> 34.53% Profit on my initial buy in
> ...




Great trade. Too bad you couldn't get the 12month CGT discount.


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