GTP - Great Southern Plantations

[michael_selway]

Snake,
Yes, this style is being blended into the current subscription. It's a more personal touch and which enables better understanding and teaching.

Julia,
I can't offer too much, suffice to say that I'm retaining my bullish outlook for GTP. I have my clients long at $3.15 and we'll hold that until significant bearish volume appears.

Nick


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Are there any SMH/AFR/Broker etc articles out recently about outlook for GTP? I really want to hear their opinion

Thanks

MS

 

[It's Snake Pliskin]

Are there any SMH/AFR/Broker etc articles out recently about outlook for GTP? I really want to hear their opinion

Thanks

MS

They are misleading! :bs:

 

[abucs]

Great Southern Plantations

The Macquarie Bank analysis on GTP's website explains much of the nature of the business and especially cashflows. It is dated 8th December but the only thing that has changed since that date is another 50% plus increase in revenue. It's good to read independent analysis of the company but everyone should have their own idea on what a company is worth.
For example, Macquarie previously said GTP was worth high $3 mark and then $2.80 and then $3.80 and now somewhere between $4.10 and $4.34 or so. The market reacts each time while the underlying business stays much the same. I remember when GTP went down to 35c and there wasn't one broker who recommended it, but quite a few that put out the big STAY AWAY and AVOID signs. Then when it went on the big meteoric rise they were all telling us to get on it and how a stock like this "comes along only once in a generation". I think the latest weakness is to do with the cashflows and the impact of this on paying dividends. GTP in its latest presentation has capital management and cashflows as their main theme which is a comfort to me. I am happy to hold on the underlying strength of the business and have bought more in periods of weakness.

 

[Nicks]

GTP - look at the fundamentals and do the math, its that simple. A great stock, investment and company.
Once others catch on I expect the price to rise reflecting the value in GTP.

 

[pch]

I like Michael's signature "A company is worth the present value of all future cashflows discounted for time and risk, nothing more or less.".

If you do a bunch of DCF's around EPS and ROE you will see that even on very conservative assumptions, its easy to make it worth $4.20 and up.

I just did EPS DCF using these assumptions:

- Sell in 5 years
- Selling PE 10
- Discount Rate 10%
- EPS growth: Comsec EPS forecasts for the next 2 FY's, 5% thereafter
- 100% franked dividends paid out 77% of the time

Valuation came in around $4.20. Changing the growth rate to 10% from 5% and it comes out at $4.60

Does someone want to check my math as I may be wrong..

 

[abucs]

Hi Nicks and pch, it's good to see people taking a fundamental long term view of GTP. The only thing that i would add to the valuations is that in 4-5 years time the saving in CAPEX with the rotation of the land, together with the recurring and compounding income from the cattle, grapes and olives will contribute to a very large increase in EPS and cause increases in EPS closer to 30%.

 

[pch]

yep - but its best to keep assumptions modest at best..

 

[michael_selway]

I like Michael's signature "A company is worth the present value of all future cashflows discounted for time and risk, nothing more or less.".

If you do a bunch of DCF's around EPS and ROE you will see that even on very conservative assumptions, its easy to make it worth $4.20 and up.

I just did EPS DCF using these assumptions:

- Sell in 5 years
- Selling PE 10
- Discount Rate 10%
- EPS growth: Comsec EPS forecasts for the next 2 FY's, 5% thereafter
- 100% franked dividends paid out 77% of the time

Valuation came in around $4.20. Changing the growth rate to 10% from 5% and it comes out at $4.60

Does someone want to check my math as I may be wrong..

yep, here are the lastest Comsec Forecasts (although before the half yearly and woodship annoucements). Ill post up newer forecasts when they are up

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 43.1 50.2 54.6
DPS 14.0 14.0 19.0 18.0

Yep better to be conservative, even 10% compounded for 5 yrs is conservative imo, so 4.60 now is about right.

Thanks

MS

 

[pch]

Where on Comsec did you get the 08 forecast? I didn't see it in the forecasts section of the stock nor the advanced search tool?

FORECAST EARNINGS Last Analyst Update
3 March, 2006
EPS(c) PE Growth
Year Ending 30-06-06 43.1 8.6 3.4%
Year Ending 30-06-07 50.2 7.4 16.5%

 

[michael_selway]

Where on Comsec did you get the 08 forecast? I didn't see it in the forecasts section of the stock nor the advanced search tool?

FORECAST EARNINGS Last Analyst Update
3 March, 2006
EPS(c) PE Growth
Year Ending 30-06-06 43.1 8.6 3.4%
Year Ending 30-06-07 50.2 7.4 16.5%

hi "Research/Main Menu" section

Yeah "Forecast" section only shows 2006 and 2007

thx

MS

 

[michael_selway]

New forecasts up on Comsec today, not much change for some reason! The funny thing is that these still seem so conservative compared to what others have suggested here

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 44.1 51.4 55.9
DPS 14.0 14.0 19.0 18.0

Was before

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 43.1 50.2 54.6
DPS 14.0 14.0 19.0 18.0

Thanks

 

[Julia]

New forecasts up on Comsec today, not much change for some reason! The funny thing is that these still seem so conservative compared to what others have suggested here

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 44.1 51.4 55.9
DPS 14.0 14.0 19.0 18.0

Was before

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 43.1 50.2 54.6
DPS 14.0 14.0 19.0 18.0

T
hanks

Hi Michael,

What is Comsec's actual recommendation on GTP?

SP rose 12c today.

Julia

 

[michael_selway]

Hi Michael,

What is Comsec's actual recommendation on GTP?

SP rose 12c today.

Julia

Hi Julia

Dont think they updated in a while yet but atm

1 Strong Buy 3 Moderate Buys

CONTRIBUTING ANALYSTS
FORESIGHT CAPITAL, MACQUARIE RESEARCH EQUITIES, TOLHURST NOALL LIMITED, LINWAR SECURITIES PTY LTD

Thanks

MS

 

[savtin1]

Hi Michael,

Don't forget that the EPS shown on comsec web is diluted EPS (358Million shares expanded base if all TREES and Options converted).

Essentially the EPS of 44.4 cents is based on around $400 million sales figure

if you believe the Sales will be $450 the EPS goes to 47.3 cents and if it is $500 million then it is about 50cents. I have a spread sheet that lets you input the sales for each product and then the percentage recogintion and so forth until you get a profit result. Mind you the results are only as good as the assumed inputs...so if they don't for e.g sell the expected 700 hectares of olive lots then the sales guestimates and resulting profits don't eventuate.

We can only hope that the expanding sales network that GTP has built recently, works effectively with all the products, especially towards the end of the financial year. SO far so good with the results to date but it is still early days..........i am quitely confident of the sales in olives , cattle and plantations.........i just hope that the sales of vineyards isn't negatively affected with all the negative media around regarding the wine glut in current supply............ a shrewd investor will look beyond the current shortage ..........but it comes to how well they sell the product..

cheers
savtin

 

[abucs]

Yes there could be some investors put off by the current condition of the Australian wine industry although GTP's offerings are still rather smallish and have the benefit of large players such as Fosters contracted to buy grapes.
The current selling of vineyards is quite good for GTP as with lots of cash, they are buying vineyards for sale under quite good terms.
I wonder if todays buying was helped by the news of UBS increasing their share and if there will be a corresponding selling tomorrow with the news that Orion has sold a similar number of shares. (About 1% of capitalisation).

 

[savtin1]

Well at least we know who was doing the buying and who was selling.
Let us all hope that it is UBS Nominees that are the smart money in this deal.

 

[michael_selway]

Well at least we know who was doing the buying and who was selling.
Let us all hope that it is UBS Nominees that are the smart money in this deal.

Hi new forecasts look much better!

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 46.2 54.2 58.7
DPS 14.0 14.0 19.0 18.0

Was before after Half Yearly

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 44.1 51.4 55.9
DPS 14.0 14.0 19.0 18.0

Was before Half Yearly

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 41.7 43.1 50.2 54.6
DPS 14.0 14.0 19.0 18.0

Thx

MS

 

[abucs]

Looks like a good trend Michael. Nice to hear.

 

[GreatPig]

GTP is already showing over 20 million shares traded at 8:20am, where the 100 day EMA is about 1.3m. I'm not getting an estimated opening, but it looks like it could be 8-10 cents higher than yesterday's close.

Sounds promising so far.

Cheers,
GP

 

[GreatPig]

Hmm... opened at $3.77 then immediately back to yesterday's close of $3.72.

GP