GTP - Great Southern Plantations

[TheAnalyst]

Re: Great Southern Plantations (GTP)

I find it very difficult to believe that the stock will go to $2.53 unless there is some very extra-ordinary news, $2.80 yes and maybe a little below that...thats why i ask of the respondants(BXP & the last person) to justify their calls. It just doesnt make sense because i roughly think that would give it a P/E of 3-4.

There has been no substantial shareholding changes so far unless the usual institutional investors are not willing to pay the higher prices for them and the drop to below $3 extends the down trend in the stock according to the charts and so far the biggest down trend sign in the stocks history breaking 3 supports.

But i still say there has been one of the smartest and cunning stock plays that i have seen of late barr the Evans & Tate (ETW) which ways heavily to evidence of insider trading in MY VIEW.

Dont forget things change very fast in a matter of months as well.

 

[Aussiejeff]

Re: Great Southern Plantations (GTP)

I believe there is some concern looking forward for wine producers in Australia (eg flat outlook). Maybe the demand for grapes won't be as astronomical as in the previous few years and perhaps GTP's future returns on their new grape ventures don't look so promising in light of that concern?

It concerned me enough when they first announced they were "diversifying" into that particular field to dump my holdings when they were $4.85/share. I feel pretty good about that decision ATM. I would actually be very surprised if they regained their former "glory" days status. But of course, that is purely my opinion.

Cheers,

AJ

 

[Julia]

Re: Great Southern Plantations (GTP)

Hi AussieJeff

I had the same concern you have expressed with respect to the current grape glut and a couple of months ago spoke to the company about this. Their response was it will take some years for their plantings to reach harvest stage and their research had indicated there would at that stage be a demand again.

I know absolutely nothing about grapevines and hope they are correct in their expectations.


Julia

 

[TheAnalyst]

Re: Great Southern Plantations (GTP)

Any one got opinions or feelings on the stock at the moment and does any one know when it announces its profit?

 

[The Once-ler]

Re: Great Southern Plantations (GTP)

They certainly appear to be good value.

But, the entry into grapes in my opionion showed investors that this company is really about tax avoidence rather than Agribusiness. Everyone knows about the glut of grapes. If GTP were a serious business they would have stuck to plantations.

John Young selling off certainly didn't help investor confidence either.

Good Luck.

 

[Julia]

Re: Great Southern Plantations (GTP)

The Analyst

Report yesterday on the ASX website (probably also on Great Southern's website) which was not picked up by the news media.

Once-ler

I had the same discomfort when I read about the company's divergence into grapes and about three months ago asked them about this. Their response was that, yes there is a grape glut at present, and yes a lot of the current producers are moving out of grapes, and that their research indicated that when their now new plantings are ready for harvest, there will once again be a demand for grapes. Let's hope they've got it right.

Julia

 

[TheAnalyst]

Re: Great Southern Plantations (GTP)

Hi Julia

I quickly had a read of those two reports and the news is positive and not so positive:

Positive because it wasnt able to take into account the revenue earned of $118 mill and it had to be deferred into the next year and not positive because if it really was it still should be in this years profit as well as the net profit being down on its previouse forecast, therefore this needs critism and caution to be applied.

The next thing is the company has no right to brag about its strong cash position on its balance sheet because had they paid a decent dividend it wouldnt have such a strong cash position it would be having to raise more equity.

Also its profit performance at present is relying on income from raising money for plantations it technically is not raising real internally generated income from its harvest of plantations and it must aggressively raise money for plantations to have a balance sheet; this answers the question why they are in the financials index and not materials like timbercorp.

 

[TheAnalyst]

Re: Great Southern Plantations (GTP)

Is this stock in quick sand? it just wont stop sinking

 

[TheAnalyst]

Re: Great Southern Plantations (GTP)

This stock is going down faster than what i expected? does that mean its performing above expectations?

 

[Julia]

Re: Great Southern Plantations (GTP)

This stock is going down faster than what i expected? does that mean its performing above expectations?

The Analyst,

Perhaps I'm being exceptionally obtuse but I really don't know what you mean in this post. Can you express whatever you are feeling differently?

I had a discussion re GTP today with a financial adviser whom I respect and who has given me very good advice in the past. After evaluating the report and interview with John Young of the 25 August, the opinion was that a lot of ill informed comment appears to be being posted on the forums ( I had offered copies of most of the postings), that the stock had been oversold, and best plan was to ride it out.

Has anyone spoken with the company in the last week or so to get an idea of their reaction to the slipping of the SP?

Julia

 

[GreatPig]

Re: Great Southern Plantations (GTP)

that the stock had been oversold, and best plan was to ride it out

I don't know anything about the fundamentals, but the share price has nearly halved in about 7 months. That's some "ride" already.

What makes your advisor believe it's oversold? Despite what it might say in the company reports, which are always painted as rosy as possible, how much does he know about the business GTP is in and how to value it? And does it really matter? It's what the market as a whole believes that determines the share price.

While of course anything could happen, I'd suggest you look at the share price between March 2000 and July 2001 to see one example of what has happened before. I have no idea of the fundamentals then either, but are you prepared to risk the same thing happening again?

Which is not saying that I think you should necessarily sell now, but personally I think you need to draw the line somewhere, and it's really your line to draw, since it's your money. As the saying goes, winners hold winners, losers hold losers.

And most importantly, in my opinion, the best strategy is to have one. And to take responsibility for your own decisions. Then there's no such thing as a bum steer.

GP

 

[BXP]

Re: Great Southern Plantations (GTP)

Not far now. $2.53 and I will be looking for some confirmation to buy.

 

[Julia]

Re: Great Southern Plantations (GTP)

Great Pig

Thank you for your advice.

If you then follow the SP through to February/March this year, you will see it went to $5.03.

Why don't you have any interest in the fundamentals of a company? Seems to me you are only looking at half the picture if you go by only TA.

Julia

 

[GreatPig]

Re: Great Southern Plantations (GTP)

If you then follow the SP through to February/March this year, you will see it went to $5.03.

Yes, but things change. Just because it was at $5 once doesn't necessarily mean that's its true value and anything lower is undervalued. You could equally argue that it was at 50 cents once, and thus everything higher is overvalued.

So how do you determine the true value of a company? With a lot of difficulty, in my opinion. Even people doing due diligence before a possible (friendly) takeover sometimes get it wrong, and they have access to all the books. How do you value components like potential revenue growth, management ability, outside economic influences, key personnel, etc?

Why don't you have any interest in the fundamentals of a company?

Well it's not so much that I don't have any interest, but more that I don't have enough time to be interested. Most of my trading is relatively short term, where I don't think fundamentals make much difference (except for obvious things like dividends, profit warnings, and takeover announcements).

For my longer-term investments I am more interested, but due to a lack of time mainly limit myself to just going by technical trend lines and whatever information I happen to pick up from the newspapers and Fin Review, which I browse through occasionally (we get it daily at work).

In the end I'm just after a reasonable return, and don't want to spend 24/7 trying to make it Being an engineer, I'm more atuned to charting than fundamental analysis, and while it does a good enough job for me, I'll mainly limit myself to that. Even that takes up more than enough of my time right now...

Cheers,
GP

 

[raider]

Re: Great Southern Plantations (GTP)

Only a slight recovery today but then back down to $2.53

 

[TheAnalyst]

Re: Great Southern Plantations (GTP)

I am starting to think maybe $1.53

 

[Julia]

Re: Great Southern Plantations (GTP)

Great Pig

In the end I'm after a reasonable return and don't want to spend 24/7 trying to make it

Me too. In your earlier post you suggested I should take responsibility for my decisions (or something to that effect). Well, of course. But that doesn't mean I won't seek informed input from sources I respect before making decisions. I frankly would much rather be doing other things than reading the fine print of company reports, so, once I feel I've put in enough time assuring myself a company is basically well managed, I simply don't feel inclined to jump in and out every second day or week as the SP varies. I'm quite happy to hold most of my stocks for several years. With a few exceptions they all pay good dividends with 100% franking and, as long as I can easily live off the income then I can withstand variations in the SP.

I guess we all have individual attitudes to trading/investing. I'm basically a buy and hold investor, and as long as the bottom line grows by a healthy amount each year and I have sufficient income I simply don't feel the need to extract every last dollar out of every day.

All the best
Julia

 

[GreatPig]

Re: Great Southern Plantations (GTP)

Julia,

I simply don't feel inclined to jump in and out every second day or week as the SP varies

I think that's fine, if that's all you're interested in doing. I'm building up an investment portfolio as well, but am also doing shorter-term trading for a couple of reasons: one, because I find it interesting, and two, because I believe (or at least am hoping) that I will be able to get a better return that way, and more particularly, have a higher income stream. Part of my plan to retire early!

Of course the investment portfolio requires a lot less attention, but I'm hoping that once I get my trading system down pat and proven, it won't require all that much time to maintain either. Certainly much less than a 9-5 job.

as long as I can easily live off the income then I can withstand variations in the SP

I think you need a fairly large amount of invested capital to be able to live comfortably off just the dividends. If you say dividend returns average 5% pa (as a rough, round figure), then $1m invested would give you $50K pa income before tax (although if it's mostly fully-franked, then you'd probably get a refund at that income level).

Which is great if you happen to have $1m, and don't mind investing it all in the share market.

Cheers,
GP

 

[Julia]

Re: Great Southern Plantations (GTP)

Hello again Great Pig,

I've no argument with the figures in your last paragraph.

Julia

 

[mit]

Re: Great Southern Plantations (GTP)

GP,

I agree 5% return on just dividends compared to a system that takes an average of 1hour a day which returns 20%+ a year would only take $250k a year to produce $50k. Or have $150k in capital and $150 on Margin would leave you enough to cover the interest and still produce $50k a year with a nice safety margin.

MIT