ABC - Adbri Limited

[roland]

Adelaide Brighton keeps coming up when I am looking around at good stock picks. Both Aegis and Comsec have rated it as quite a promising stock and have strong buys.

Again, on tonights "Aegis Weekly Focus" it appears again:

Adelaide Brighton (ABC) posted a record FY07 result. Sales and EBIT (excluding share of net profit of joint ventures) increased 12% each, while adjusted NPAT saw a 14% increase in FY07. Given many of ABC's facilities are now running at capacity and ABC is facing continued high energy costs,
we have cut our EPS forecasts by 10% and 15% in FY08 and FY09, respectively. However, our sales revenue forecasts remain strong and we maintain our BUY on ABC.

The chart looks like fun for intraday/intraweek week trading. I may have a go if we can get an entry below $3.50.

Anyone else have further thoughts on ABC?

 

[roland]

mmm, I read a little further and have a page to add. Such a great product - cement ... have to learn more about it. Happy reading

 

[So_Cynical]

I brought into ABC today at $3.16 i like the cement business and cement related building products, ABC looks to be a very stable and reliable business with big revenues and lots of exposure to the economic growth cycle so should give lots of opportunity's for a low cost average position builder like me.

Some things to like about ABC

• Number 1 in Concrete product sales.
• Number 1 Cement and clinker importer.
• Number 1 Lime manufacturer.
• Number 2 Cement and Clinker supplier to the Aust construction industry.
• 2+ Billion Market cap.
• 1+ Billion in revenue (2010)
• Gearing - net debt/equity 15.9% (Debt 148 mill)
• Very low currency risk - 100% Aussie play.

http://www.adbri.com.au/pdfs/2010/dec/CombinedASXDec2010Presentation.pdf

ABC have been very busy over the last decade conservatively growing the business via smallish acquisitions building their position in the Lime and aggregates market, they are very deliberately looking to buy business that bolt on to their vertical integration model.

I reckon there is some potential (fundamentals) for the ABC share price to channel and generally go sideways for a year or three, which would suit me very well.

http://www.adbri.com.au/
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[So_Cynical]

The 2010 Adelaide Brighton Annual report was released today

http://www.adbri.com.au/pdfs/2011/AR/AR2010_ABL_Annual_Report.pdf

Have to say im impressed..pretty much all the good numbers up and the bad numbers down ABC management has (apparently) delivered their 10th consecutive record profit, with the building cycle near bottom over the last 2 years...tremendous up side i would think once the economy really gets going.

Anyway some impressive charts etc from the 2010 annual report below.
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[So_Cynical]

I brought into ABC today at $3.16 i like the cement business and cement related building products, ABC looks to be a very stable and reliable business with big revenues and lots of exposure to the economic growth cycle so should give lots of opportunity's for a low cost average position builder like me.

I took a little average down today, just after the open @ $2.29 ~ i have a feeling that in years to come i wont regret it....some crazy prices today!!

At $2.29 ~ factoring the last 2 divis forward gives a gross yield of around 12.2% :

 

[McCoy Pauley]

Not a company I follow, but given the state of the housing market and the possible imposition of a carbon tax materially adversely affecting ABC's costs, that seems a gutsy move, So_Cynical.

 

[So_Cynical]

Not a company I follow, but given the state of the housing market and the possible imposition of a carbon tax materially adversely affecting ABC's costs, that seems a gutsy move, So_Cynical.

The carbon tax is a certainty IMO and all cement manufacturers will have to pay it i would think, ABC also import cement so wont lose any competitive advantage because if the Australasian manufacturing industry proves to be uncompetitive with imports they will simply cease manufacturing and import only.

Cement is a vital commodity and closely linked to the health of the domestic economy, its hard to imagine any sustained growth without growth in cement sales....infrastructure development etc needs cement and ABC has the infrastructure to deliver that.

Cement is as safe as houses used to be especially when your number 1 and carrying insignificant debt.

 

[So_Cynical]

(9th-August-2011 ) I took a little average down today, just after the open @ $2.29 ~ i have a feeling that in years to come i wont regret it....some crazy prices today!!

At $2.29 ~ factoring the last 2 divis forward gives a gross yield of around 12.2% :

Having a look over my portfolio tonight i noticed that i had by shear chance actually brought my last parcel of ABC shares at the bottom...bottom picked and actually fluked the bottom.

I like to think that you don't need to pick the bottom to do well, because in trying to pick bottom you end up buying enough cheap shares to bring your average price down enough to capture the bottom anyway....however still nice to actually buy one parcel right on the bottom.

ABC has recovered nicely so far...for the record my average price for the super fund is 2.96 so down 3.5% and for my portfolio my average price is $3.01 so down 4.5% at the moment...but only because i did average down.
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[pixel]

I notinced that ABC sparked some interest as a potential breakout trade.
FWIW, I have been alerted to it several months ago, and identified a series of higher lows - higher highs. The primary resistance was established on September 1st at $2.88 - that was after the long-term Low, which gave rise to my initial alert. PR was then broken on October 13th, but volume and momentum dropped off immediately after.
Yesterday's renewed break resulted in a much better chance of a profitable trade, which was supported by today's continuation gap and increased volume.



If the rise continues, I will now treat the latest High as the new Primary Resistance and average up into a breakout trade that has a potential target of $3.65.

 

[pixel]

ABC did follow through today;
but when it hit resistance and my short-term template suggested a deeper retracement, I decided to take profit after all. Especially ahead of a weekend, I often value cash in bank more than open trades weighing on my mind. (Some people can shrug it off and stay unemotional at all times. My psychological equilibrium benefits from a helping hand.)



On a daily chart, it's easier to see why I was somewhat concerned:
Imagine today's Close had been a little lower still, ending similar to the Shooting Star candle on November 9th; then check out the days after the 9th.

 

[So_Cynical]

Big move by ABC today with an intra day high of $3.27 .. over 10% in the last ten days putting 3 of my 4 parcels into profit and 1 parcel at break even. ill open a sell order next week and see how i go.

 

[pavilion103]

I exited today.

I'm not sure if it can push a lot higher right now.

A great couple of days profit.

 

[pavilion103]

Interesting as it falls today on lower volume. It will be interesting to see if there is much supply around.

Still some overhead resistance thought I feel.

 

[pixel]

I exited today.

I'm not sure if it can push a lot higher right now.

A great couple of days profit.

same here

If the gap to $2.92 is closed, but the support at $2.90 holds, I'll get back on board.
Otherwise I'm waiting for a new setup.

 

[So_Cynical]

I sold most of my first Parcel of ABC today (@3.20) taking a ridiculously low profit of 0.07% (3 CPS) seriously, well that was the profit on the trade throw in the 2 dividends and its a little better at 19.5 CPS net, so 24 odd CPS gross...anyway its done and i have freed up a chuck of money and didn't except a loss.

Now because i only sold shares from my first entry (parcel) the average buy in price of my remaining shares is a quite respectable $2.80 I'm still very much a believer in this stock and hold a sizeable position in my super fund that i will hold on to....awaiting the inevitable break out.

ABC is range bound with 3.20ish being the top....and i just couldn't watch it go down again without taking out some of my capital.

 

[notting]

Disgusting!!
I was short this peace of crap for ages as it trended up for no reason against the broader market trend.
Got stopped out eventually and now it plunges as it should 'have' after reporting.
Not happy Jan.

 

[So_Cynical]

Disgusting!!
I was short this peace of crap for ages as it trended up for no reason against the broader market trend.
Got stopped out eventually and now it plunges as it should 'have' after reporting.
Not happy Jan.

LOL yep it just kept going sideways and up for 2 months...for no reason at all, the break out that i had waited a year for happend just after i gave up waiting and now she's back down under $3 ~ goes to show ya just never know.

Actually ill been keen to buy in again (add to my free carry position) at under $2.85 ~ this is a great company.

 

[notting]

Actually ill been keen to buy in again (add to my free carry position) at under $2.85 ~ this is a great company.

Yeah bought a bit today, just to feel what it's like on the other side!

 

[RandR]

Being number 1 in the country for lime they do seem to have somewhat of a competive advantage mostly due to the internal infrastructure the company has built for distribution, thus giving them an element of cost control. Despite being a strictly commodity business. It puts the business on a fuzzy grey line for me between being wonderful and average. I like it because of the competive advantage the company has ... but at the end of the day there just pushing concrete and other related products ... leaves them quite exposed in performance terms to the volatile bellweather of the economy. It seems like the kind of business to unload upon only at certain points in the economic cycle, but to avoid at most others. Yet it has offered relatively stable returns.

 

[So_Cynical]

Despite being a strictly commodity business. It puts the business on a fuzzy grey line for me between being wonderful and average.

Average...seriously average.

the 10 year chart says it all, from $1.10 to $3.15 in ten years and $1.38 in FF dividends = $3.43 this is a great stock.

Look at the 10 year chart and take out the extremes of the 2007/8 bull and the GFC bottom and this is a solid stock, far from average, unless you call a 22% PA average gross return over ten years average.
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