GTP - Great Southern Plantations

[Rob_ee]

7.5% Dividend Yield.

No brainer.
Capital Gains will follow a high Dividend Yield.

Just trying to follow the logic here ... would you not have made a lot more money after bailing out at the first sign of a relentless sell of when the share price was $1 higher recently, rather than trying to top-em-up cause they're so cheap now and wait for a 7.5% dividend yield??

Learning as I go.

Rob

 

[Nicks]

Hi Rob

Not really, im not a big fan of Panic Selling, rather fundamentals, as they inevidably will be what guide the price of the stock. At least a stock that is fundamentally driven.

Also, what you are talking about is very much more a puristic day traders view. While I do frequent trades of some stock more akin to day / frequent trading, GTP is not one that really falls into that category.

Certainly with GTP there was some panic following some concern over fundamentals, which I feel is now clearly accepted as being an over reaction. It is opporunities like this that do not present too frequently in a bull market. If anyone can point me in the direction of other shares that are returning a 7.5%+ yield let me know, I'd like to look at them.

Hope this helps.

 

[Seneca60BC]

From their Fy06 Financial Report - Cash Flow of Operating Activities there is an entry of:

"Securitisation of Loans payments"

Can someone explain to me what this actually means?

Thanks

 

[bruce1]

Securitisation is where GTP sell off their loans to investors or assets held by investors to banks or lending instituitions rather than manage that process themselves.I think GTP have structured most of this process with the bank of Adelaide.Hope this helps in a very simple way.

 

[Ken]

GTP got sold down today.

The graph looks ugly and it is heading down in waves.

What dividend should we expect for the year?

15 cents? and how sustainable is it in the future?

 

[savtin]

I must admit it suprised me todays selling. ...I thought the company had turned the corner after yesterdays announcement....and yet we saw aggressive selling in both TIM and GTP today..someone wants out big time.........selling at less than NTA is CRAZY... the break up value of the company is worth atleast $3.30 so it seems silly.....

Does anyone have any idea as to the selling today.....I know UBS sold down its shares....and maybe getting out completely......

GTP release sales next week and should be positive I'd imagine unless they aren't that crash hot????????

Was there any news in the media or brokers downgrades that had an impact on todays action???

 

[Jackob]

I must admit it suprised me todays selling. ...I thought the company had turned the corner after yesterdays announcement....and yet we saw aggressive selling in both TIM and GTP today..someone wants out big time.........selling at less than NTA is CRAZY... the break up value of the company is worth atleast $3.30 so it seems silly.....

Does anyone have any idea as to the selling today.....I know UBS sold down its shares....and maybe getting out completely......

GTP release sales next week and should be positive I'd imagine unless they aren't that crash hot????????

Was there any news in the media or brokers downgrades that had an impact on todays action???

"Best" news caused worst slump!

GTP is obviously on a slippery down slope!

Nothing has been changed GTP's long-term downward trend from $5 double-top.

Stagnant e/s for years with skyrocketing debts, which is further eating into the earnings year by year.

Govt regulatory changes will make the situation even worse.

Brokers are predicting diminishing earnings and divi. in the future

Large scale insto dumping has begun...

What else needed to convince people the above facts they can all see?

 

[savtin]

Actually Jacob,

From all that doom and gloom picture you just painted it has become very CLEAR now that GTP is a strong BUY.........

 

[Ken]

Buy Signals also require a tolerance for volatility i have found.

Whether GTP is a buy now I dont know, if we cast back to BHP when it was $24..... we all know what happened then... people were screaming that BHP was falling over and that commodities were collapsing..... now look at it up 20%.... imagine the profits from margin loans on them...

History tells us that dips in share price are buying opportunties with GTP and a number of other stocks too.

History also tells us some shares never recover.

Best of luck to all.

 

[Julia]

Actually Jacob,

From all that doom and gloom picture you just painted it has become very CLEAR now that GTP is a strong BUY.........

Umm, why, Savtin???

 

[Rafa]

Not sure about that comparison Ken

BHP never entered a long term downtrend plus it was posting record profits, 10bill odd!...

GTP has been on a long term down trend for over two years...
Now fundamentally there may be a reason why it should start going up, but in reality all you are attempting to do is the pick the bottom, and you know what they say happens to those who try and do that...

Just look at the charts!

 

[Seneca60BC]

My humble opinion about GTP is this:

Because there is no perceptible growth in EPS for GTP for the next year, alot of speculators/traders call them what you want are disinterested in GTP.

We as a society as a whole are so consumed by GROWTH that we are not interested in anything else, i.e the financial position of the company for instance - I guess thats the mentality and hence no interest in GTP.

Cheers
Shelton.

 

[pch]

I've learned more about studying financials with GTP than any other company personally..

I'm more upbeat in the long term but I'm not hoping for anything much in the interim.. The discount to NTA to me is a good observation to make because this is not intangible stuff whos true value is not always reflected accurately on the books.. this is land, plain and simple. In 10 years from now I still expect it to have a similar or higher value than what it is now.

As we have discussed before (check previous threads), GTP need a heck of a lot of cash to continue their policy of land aquisition. At some point in the future, GTP will have some large rotations of land when the trees are harvested. When this happens, the benefits to shareholders will be great. But right now they are in the nasty position of needing hundreds of millions of dollars more before this occurs.. dilute and issue equity and face flat EPS or take out weird financial instruments and pay it back in 5 years when the rotations should be significant enough in savings to pay back the loan..

So I'm an optimist, but I feel unless the market overnight becomes long term (as in over 2 years) in their thinking, buy GTP for the yield and forget about it or hang back and market time it in about 3 years

 

[barnz2k]

APRIL 2 - "half year sales up 30%"

been pretty stagnant recently.. Doesnt really same to follow the generall trade, ASX200 tends.. why is that?

 

[jammin]

Seneca - I don't see that a lack of interest by traders/speculators, due to a lack of growth prospects, would be the reason for the fall in SP. I think fear is a more likely cause for the SP performance. The following negatives may be leading to this fear:
-The ATOs notification that any reconsidered view, of the allowable tax benifits, will be effective 1/7/2008.
- The deafening silence surrounding the interim dividend payment. The negative impact on SP caused by a reduction in dividend can be rather large. The change to the dividend payment schedule may be related to the change in financial year end, (from 30th June to 31st Sept), but they should be informing the punters.
- The other negatives mentioned in the Chairmans report such as drought affecting the results etc.

These negatives all increase the uncertainty in this companies future and I think this is what you are seeing in the SP.

Please note the views above reek of fundermental analysis . I am 100% aligned with T/A but an answer from a T/A view point didn't seem to be in line with tone set in this thread.

 

[pch]

Please note the views above reek of fundermental analysis . I am 100% aligned with T/A but an answer from a T/A view point didn't seem to be in line with tone set in this thread.

Well, you have to grant us at least 1 stock to do FA!

 

[Jackob]

Why doesn't the market react poorly to GTP's 30% increase in its HY sales?

The following quote of my 12/1/2007 post might have answered a bit of the question.

I have checked GTP's 2006 annual report again (pages 12-13) and found GTP's sales revenue increased by 37% p.a. on average from $242.9m (2004) to $456.9m (2006). However, its e/s kept virtually unchanged at 43.23c/s (2004) and 43.78c/s (2006). So a 30% increase this year in sales may be too small to keep its e/s from falling...

Just for your information.

...

The reality was that GTP in the FY2006 raised a total of $532M debt to generate only $450M revenue. I estimate that at least $200M of the $532M debt was for the $300M woodchip project.

The simple facts were
1) GTP increased its revenue by about 50% in each of the last 2 financial years (from FY04 to FY05 and from FY05 to FY06);
2) But its e/s was kept flattish around 40c/s for the last 3 FYs;
3) At the same time, its debt shot up from near zero to $612M, or $2/share.

I reckon in this FY07, GTP would intend to increase its revenue by at least 30% to $600M ($300M for woodchip and $300M for the rest) in order to maintain its e/s near 40c/s, at the same time it would need at least $600M new loan to fund the new projects. The total debt would be $612M+$600M=$1200M+, or say $4/share.

The only problem now would be whether any bank on earth would lend GTP such a big amount of $600M while its debt/equity ratio approaching 200%… The only alternative would be to issue $600M worth new shares, but the problem now would be if it would make the share price plunge to $1.50 … I guess J Young is just worrying these problems now.

 

[pch]

The E/S stagnation was dilution based from equity raising to buy land.

From what has been told to me.. at the time when TIM was being viewed as the more innovative and diversified, institutiuons were unhappy about this excessive dilution of GTP to acquire land, as it was making a major dent in E/S.

So they geared more aggressively to reduce dilution and from that point on the market started punishing them.. (likely woke them up to what Jackob has been concerned about)..

So what do we have.. The big one (TREES3 converts in october 2010 so we will not see that anytime soon)
TREES2 is october 2009
TREES I think converted in April 06 which was a big dilution cause..

So this financial year, we may actually have a E/S that is not weighed down by such dilutions.. in addition, as previously discussed there should be tens of millions not expensed to provisions for crappy harvests of the past, as well as general land appreciation being recognised this year..

But its only till the 09/10 FY when TREES2 and TREES3 convert for I think, $75 and $125 mil respectively..

So I feel this year may suprise.. but I'm getting a funny feeling about 09/10..

I'd have to go back and re-examine the rotation estimates for those years, as well as the terms of their debt facilities also.. not tonight, but maybe tomorrow if I have time..

 

[Jackob]

The E/S stagnation was dilution based from equity raising to buy land.

...

I believe from the FY2005-2006 onwards, GTP abandoned its equity raising approach and switched to debt raising directly from banks.

So there is no dilution by equity raising any more (TREES2/3 have been classified as debt under new accounting standards), but the e/s is directly reduced by increasing interest expenditures.

The total debts now has been increased to about $2/share, which should bear an interest of 20c per share p.a.

 

[pch]

Ah, don't forget though Jackob that a big chunk of that debt facility is that thing where they pay no interest until the loan matures..

I'm not disagreeing with your numbers, it just seems to me that they are pushing hard to improve current e/s by pushing out the income related aspects of all that debt by a couple more years..