FGE - Forge Group

[VSntchr]

In reply to last post on previous page:

Because fund managers have certain funds which are designed to track the indicies.
So once the stocks that comprise the indicies change (18th), they are forced to rebalance their holdings of securities.

 

[robusta]

It will be nice to welcome all the index funds to the share register.

 

[robusta]

Transition underway to a larger and more independant board.

http://www.asx.com.au/asxpdf/20110308/pdf/41x9jznkls0ztq.pdf

Not so sure I like independant boards, I like directors to have some skin in the game.

Thought John Smith might be interested after he has finished with Clough.

 

[VSntchr]

Transition underway to a larger and more independant board.

http://www.asx.com.au/asxpdf/20110308/pdf/41x9jznkls0ztq.pdf

Not so sure I like independant boards, I like directors to have some skin in the game.

Thought John Smith might be interested after he has finished with Clough.

Yeah, whats the need for an independent board? So management can solely focus on running the business? How can they properly run the business without controlling everything that happens?

I dunno, but it feels like shareholders lose a lot of control with an independent board...but I know very little on the subject so I could be completely wrong...

 

[fanger]

In reply to last post on previous page:

Because fund managers have certain funds which are designed to track the indicies.
So once the stocks that comprise the indicies change (18th), they are forced to rebalance their holdings of securities.

Excellent news I've been picking up more FGE over the last couple of days.

 

[moreld]

Because fund managers have certain funds which are designed to track the indicies.
So once the stocks that comprise the indicies change (18th), they are forced to rebalance their holdings of securities.

http://www.fusioninvesting.com/2011/03/does-index-inclusion-lead-to-higher-share-prices/

I often see this incorrect view put forward, so am posting this here as a to be expanded work in progress.

If you think about it then simply buying any companies that have been included in an index would result in market out-performance, because they the stock has to go up because indexers have to buy them. People’s next thought is that indexers buy ahead of the change date. Well then same thought goes, buying as soon as announced would lead to out-performance. Or one step further buying on anticipation of the announcement would lead to out-performance.

The reality is index funds do not buy every share in an index. There is absolutely no need for them to do so to mirror the performance of the index. Indexers buy a representative sample of the index. This generally comprises all the top companies and a selection of mid/smaller companies by industry.

There are also small cap fund managers who don’t wish to own stocks once they are included in an index.

 

[nioka]

Not so sure I like independant boards, I like directors to have some skin in the game.

I don't like it though when one director has majority control of the company. Check out the ownership of FGE.

 

[skc]

Transition underway to a larger and more independant board.

http://www.asx.com.au/asxpdf/20110308/pdf/41x9jznkls0ztq.pdf

Not so sure I like independant boards, I like directors to have some skin in the game.

Thought John Smith might be interested after he has finished with Clough.

Yeah, whats the need for an independent board? So management can solely focus on running the business? How can they properly run the business without controlling everything that happens?

I dunno, but it feels like shareholders lose a lot of control with an independent board...but I know very little on the subject so I could be completely wrong...

Independent doesn't mean they don't have skin in the game. It just means they have no other job in the company apart from their directorship. The CEO, COO and CFO who are also on the board are not independent director.

What's wrong if all directors are inside directors and the CEO is the Chair? Well no one will be able to dismiss the CEO for starters even if he did something stupid...

Management with total control of a company's direction also may not be a good thing. An outsider's independent viewpoint can be very valuable...

There are pros and cons to each so a balance is probably the way to go.

 

[Richard Hill]

I don't like it though when one director has majority control of the company. Check out the ownership of FGE.

Usually I'd agree somewhat with that comment but as Clough has an interest and the board is moving to become more independant in line with sound corporate governance, I don't think this one is too much of an issue.

I'm looking to pick some of these up, even as much as this one's grown, as the whole construction industry is beginning to ramp up, especially WA & QLD, with major mining and resource projects like RIO, BHP, CHEVRON etc seeming to be on the move.

With the added dollars coming back into the economy this one along with the majors like Monos, UGL, LEI, DOW(If they get over their trains) etc they're sure to start benefitting from the increased project work.

Also with a lot of share prices on the majors probably being under valued still, there's hopefully going to be a lot of legs on the engineering and construction companies. As long as Japan's situation doesn't curb iron ore buying too much that is and have a flow on effect to the iron ore & LNG companies.

Just my though and not based on anything other than pure optimism that the construction game appears to be moving again.

 

[nioka]

Bear in mind that there is a concerted effort to stop Forge getting the Crown deposit from Lynas for a song. Many believe that Curtis is using his influence to get the Crown deposit from Lynas at "mates rates". Should Lynas shareholders veto the sale then forge has nothing much at all. My thoughts are that it is possible that the sale will be stopped. I know that ASIC are being asked to intervene in the transaction and that major shareholders are being alerted to the facts that Curtis has a conflict of interest here as do many others. they are also being alerted to the fact that the "independent" valuers also have connections to Curtis. I also have been told that Oliver Curtis the son of Nick Curtis is also involved and that he has come to the attention of ASIC in the past for insider trading. I am checking out all these facts as I am a holder of a fair amoun of Lynas shares and dont want to be "dudded" there.

So I urge caution and do plenty of research. Remember that if the deal comes off Nick Curtis will have a majority holding in Forge. DYOR.

 

[Richard Hill]

HAHA, I love it. DYOR .... and keep researching. Sorry I shouldn't laugh as several media announcements have made the same error.

This stock FGE is Forge Group Pty Ltd, a construction & engineering company. This is a Perth based company.

The stock you refer to is FRG. Forge Resources Limited which is a mineral resource exploration comopany. This company is based in Sydney.

As far as I can tell they are two very separate entities and have no connection other than a coincidence that the both contain Forge in their name.


Indeed DYOR.

 

[VSntchr]

Bear in mind that there is a concerted effort to stop Forge getting the Crown deposit from Lynas for a song. Many believe that Curtis is using his influence to get the Crown deposit from Lynas at "mates rates". Should Lynas shareholders veto the sale then forge has nothing much at all. My thoughts are that it is possible that the sale will be stopped. I know that ASIC are being asked to intervene in the transaction and that major shareholders are being alerted to the facts that Curtis has a conflict of interest here as do many others. they are also being alerted to the fact that the "independent" valuers also have connections to Curtis. I also have been told that Oliver Curtis the son of Nick Curtis is also involved and that he has come to the attention of ASIC in the past for insider trading. I am checking out all these facts as I am a holder of a fair amoun of Lynas shares and dont want to be "dudded" there.

So I urge caution and do plenty of research. Remember that if the deal comes off Nick Curtis will have a majority holding in Forge. DYOR.

I think your thinking about a different Forge group, this thread is about a different company!

 

[nioka]

I think your thinking about a different Forge group, this thread is about a different company!

My apologies. I have the wrong company. I was thinking about FRG Forge Resources. I'm surprised that someone hasn't pulled me up earlier on. Big, big mistake.

 

[VSntchr]

Good to see this one on the cheap again.
Lots of talk about MCE but I prefer forge at current prices.

Very good ROE even with a ton of cash at bank. Once they put that cash to work we can expect a much better return than what it would be currently earning.

Peter Hutchinson is a smart guy and I cant see him making a stupid acquisition so I have relative confidence that a good purchase (if any) will be made.

I think his decision to find a new managing director is a very selfless decision with the companies best interests at heart. Alot of others in many other companies are not at the top job for the best interests of shareholders but merely so they can boost their ego's and wallets...I think Peter is different.

Anyway I found today a good day to top up.

Seems that the market is correcting as more people worry about the strong dollar? is this right?

I can't see any direct effects of this on forge, except that it may affect the companies which it services...but really I cannot see these companies stopping their activities...if the purchasers stop buying..our major export will fall...and if that happens...the dollar will also fall...so really there is a safety net there in my mind. Plus..there is already a shortage of commodities, if we stopped mining it would be out of control...

anyway just a bunch of my random thoughts that I thought might spark some further insights!...

 

[Intrinsic Value]

Good to see this one on the cheap again.
Lots of talk about MCE but I prefer forge at current prices.

Very good ROE even with a ton of cash at bank. Once they put that cash to work we can expect a much better return than what it would be currently earning.

Peter Hutchinson is a smart guy and I cant see him making a stupid acquisition so I have relative confidence that a good purchase (if any) will be made.

I think his decision to find a new managing director is a very selfless decision with the companies best interests at heart. Alot of others in many other companies are not at the top job for the best interests of shareholders but merely so they can boost their ego's and wallets...I think Peter is different.

Anyway I found today a good day to top up.

Seems that the market is correcting as more people worry about the strong dollar? is this right?

I can't see any direct effects of this on forge, except that it may affect the companies which it services...but really I cannot see these companies stopping their activities...if the purchasers stop buying..our major export will fall...and if that happens...the dollar will also fall...so really there is a safety net there in my mind. Plus..there is already a shortage of commodities, if we stopped mining it would be out of control...

anyway just a bunch of my random thoughts that I thought might spark some further insights!...

I have been on holidays for the last two weeks and checked the share price today and noticed that it had slipped under 6 dollars.

Has there been any news that one should know about it?

If not it should be an ideal time to top up with some more FGE.

 

[VSntchr]

Earnings upgrade! Expecting 25 - 27 mil for the second half. Very impressive, up on 19m from PCP and 21m in first half.

I see FGE almost more undervalued now than it was at $4 (keeping in mind what we knew then).

Loving that i've been aggressively topping up

 

[drworm]

Earnings upgrade! Expecting 25 - 27 mil for the second half. Very impressive, up on 19m from PCP and 21m in first half.

I see FGE almost more undervalued now than it was at $4 (keeping in mind what we knew then).

Loving that i've been aggressively topping up

Watch out dude. "pre tax" 25 - 27 mil.

 

[skc]

Earnings upgrade! Expecting 25 - 27 mil for the second half. Very impressive, up on 19m from PCP and 21m in first half.

I see FGE almost more undervalued now than it was at $4 (keeping in mind what we knew then).

Loving that i've been aggressively topping up

$25-27m BEFORE tax = $17.5 to $19m AFTER tax. H1 NPAT $21m AFTER tax. A pretty significant half-on-half fall!

Revenue was $204m in the first half, and only $200m in the update. Corresponding figures from last year was $112m and $135m. So half-on-half top line growth was 20%, 51%, -2%...

This may be an one-off but if that's the end of their growth then the current PE of 16 (EPS = 40c) is starting to look stretched.

I am actually surprised that the share price didn't fall after the announcement

 

[VSntchr]

$25-27m BEFORE tax = $17.5 to $19m AFTER tax. H1 NPAT $21m AFTER tax. A pretty significant half-on-half fall!

Revenue was $204m in the first half, and only $200m in the update. Corresponding figures from last year was $112m and $135m. So half-on-half top line growth was 20%, 51%, -2%...

This may be an one-off but if that's the end of their growth then the current PE of 16 (EPS = 40c) is starting to look stretched.

I am actually surprised that the share price didn't fall after the announcement

WOAH! I totally missed the BEFORE tax part....really should have seen that. You sure its not a mistake??? I really dont think they would state 26% growth by using a comparison of after tax figures...
Kinda vital if it is a mistake!

 

[skc]

WOAH! I totally missed the BEFORE tax part....really should have seen that. You sure its not a mistake??? I really dont think they would state 26% growth by using a comparison of after tax figures...
Kinda vital if it is a mistake!

Everyone of their past earnings upgrade has been before tax so there was certainly no intention to deceit.

I've made that same mistake before - luckily it's a mistake that you should only make once!