KSC - K&S Corporation

[So_Cynical]

Re: Greg buys again

I have almost 30,000 KSC that I bought years ago at an average of $2.88, so I am behind big time. I expect the SP will improve when KSC either winds back unprofitable business, or that business improves, plus, the WA business should do well.

My average is a bit less than $2.88 but im way behind too, only a matter of time till these sorts of business turn...i was surprised the KSC share price didn't take a hit today on the Scott transport speed limiter tampering, as reported on the news yesterday and again tonight.

Because of the links between Scott transport and KSC

 

[McLovin]

but barriers to entry substantial

Are there really though? Perhaps there are some scale advantages but are fixed costs significant compared to say, the airline industry?

Transport seems more like a typical market with no barriers to entry (margins are low as are roe roa). Efficiency is the only thing that matters.

 

[So_Cynical]

Are there really though? Perhaps there are some scale advantages but are fixed costs significant compared to say, the airline industry?

Transport seems more like a typical market with no barriers to entry (margins are low as are roe roa). Efficiency is the only thing that matters.

When i wrote that i was considering the obstacles a new start up would encounter...the fact that there are already many players in the industry with many decades of experience and relationships built on trust and reliability...the fact that with such small margins anyway there would seem to be little incentive for a new player to burn cash for years just to get to break even.

I think there are significant barriers to entry....i mean if you had 5 or 10 million bucks and wanted to start a business would you go out and buy 6 or 7 trucks, set up depots in 3 or 4 state capitals and take on 2 dozen or so employees?

For me scale and experience = efficiency

 

[McLovin]

When i wrote that i was considering the obstacles a new start up would encounter...the fact that there are already many players in the industry with many decades of experience and relationships built on trust and reliability...the fact that with such small margins anyway there would seem to be little incentive for a new player to burn cash for years just to get to break even.

I think there are significant barriers to entry....i mean if you had 5 or 10 million bucks and wanted to start a business would you go out and buy 6 or 7 trucks, set up depots in 3 or 4 state capitals and take on 2 dozen or so employees?

For me scale and experience = efficiency

I getcha now.

I tend to see barriers to entry as things that are difficult to replicate and which give the incumbent some advantage. Examples would include, customer preference, government licensing, high fixed costs (especially in a small $ value industry) etc. The things that you mentioned; relationships, trust, reliability, don't seem to be worth very much to the business. Mercedes-Benz/BMW/Audi all have the same problem, they have very well respected, trusted brands but they are unable to generate a competitive advantage with them.

To bring it back to a more relevant example, all those truck companies whose drivers speed (saw somehting about Scott on the news tonight), drive while drug affected to meet impossibly tight deadlines etc would indicate that there is very little in the way of competitive advantage or barriers to entry.

 

[Ves]

To bring it back to a more relevant example, all those truck companies whose drivers speed (saw somehting about Scott on the news tonight), drive while drug affected to meet impossibly tight deadlines etc would indicate that there is very little in the way of competitive advantage or barriers to entry.

Adding to this the returns of logistics companies such as KSC, QUB and TOL all average around the high single figures to low teens in terms of return on capital over the last decade (obviously QUB hasn't been listed for this long). I don't know many other road-based companies that are listed, but AIO has never been fantastic either for comparison to a similar industry. Operating margins are also generally single figures.

Often high costs of entry provide an illusion that the industry has barriers to entry, when it is really the low profitability of the industry that keeps entrants at bay. Mature industries without real barriers to entry can go through long periods of contraction before the least efficient players are forced out. Then new entrants may be encouraged because returns slowly improve and the war starts all over again.

Just remember, you as a share holder will never receive a return over the long-term that exceeds the return of capital of a company.

 

[So_Cynical]

Re: Greg buys again

My average is a bit less than $2.88 but im way behind too, only a matter of time till these sorts of business turn...i was surprised the KSC share price didn't take a hit today on the Scott transport speed limiter tampering, as reported on the news yesterday and again tonight.

Because of the links between Scott transport and KSC

I picked up a few more KSC shares on the 23rd of March at $1.10 (and only now realised i didn't post) thinking i didn't want to let this second major dip get away from me like the first one did a few months before..so far the timing been perfect, brought my average price down to $1.76 and elevated KSC to my #4 portfolio stock by value.

 

[Pioupiou]

Nice move on Friday to close at $1.30. I recently sold my private holding to my SMSF, which also held KSC, so there are now 30,732 shares in that portfolio. I think KSC will improve, and it pays a reasonable dividend of 10c a year, so it suits an SMSF.

I wonder if the fact that 1st Fleet went into administration last week has anything to do with the renewed interest in KSC. One man dead may be another man's bread.

 

[Ves]

I wonder if the fact that 1st Fleet went into administration last week has anything to do with the renewed interest in KSC. One man dead may be another man's bread.

I think if anything it just highlights how tough it is to be profitable in this industry over the long-term.

 

[tigerboi]

I think if anything it just highlights how tough it is to be profitable in this industry over the long-term.

yes true... tough in the transport game...dominoes make 3 times npat than most transport companies do,as for first fleet...has always been a poorly run company notwithstanding the ceo put all the cash through the casino.

if it was me or the average joe blow...straight to the calaboose...100% ahole stephen brown will already have his $16m home & all the other ill gotten gains in his wifes name,seen it happen before with mcarthur express i luckily got out 3 weeks before it all went bad.

employers now leave it to the GEERS scheme to pay all the workers.

next company to run out of cash is lindsays brothers LAU supposedly only made $2.1m
last year with 200 prime movers,assets are quietly on the market...checkout cti logistics CLX based in perth good well run transport company...tb

 

[Pioupiou]

Nice move on Friday to close at $1.30. I recently sold my private holding to my SMSF, which also held KSC, so there are now 30,732 shares in that portfolio. I think KSC will improve, and it pays a reasonable dividend of 10c a year, so it suits an SMSF.

I wonder if the fact that 1st Fleet went into administration last week has anything to do with the renewed interest in KSC. One man dead may be another man's bread.

Nice announcement of profit upgrade today (12/07/12), and the SP went up by over 4%, with no sellers within cooee of the SP at noon. Directors were buying early in the year at prices just north of $1.20, which is often a good sign.

 

[Pioupiou]

Profit announcement today (22/08/2012). Dividend up 1c to 11c a year. NTA is $1.72. I am happy to hold KSC for the dividend yield, although I am at least 50% down on paper in respect to capital loss.

 

[McLovin]

How long does a truck last on the road? I'm looking at their cash flow statement and if you figure that over the business cycle motor vehicle capex will approach depreciation then the dividend looks unsustainable and/or there will be a capital raising at some point. Unless the asset is written down to zero and still has a fair bit of life left in it.

 

[So_Cynical]

How long does a truck last on the road? I'm looking at their cash flow statement and if you figure that over the business cycle motor vehicle capex will approach depreciation then the dividend looks unsustainable and/or there will be a capital raising at some point. Unless the asset is written down to zero and still has a fair bit of life left in it.

I know that K&S actually sell some unwanted trucks and Trailers thur the K&S web site

They are currently selling a 1990 model Western Star Prime mover...if they have had that from new then id say with some confidence that its been depreciated to $0 a long time ago.

http://ksfreighter.ihub.ninemsn.com..._Int32|1||p_StockPrice_Decimal|1&TabID=804306

 

[McLovin]

I know that K&S actually sell some unwanted trucks and Trailers thur the K&S web site

They are currently selling a 1990 model Western Star Prime mover...if they have had that from new then id say with some confidence that its been depreciated to $0 a long time ago.

http://ksfreighter.ihub.ninemsn.com..._Int32|1||p_StockPrice_Decimal|1&TabID=804306

Wow! There's an answer! Although they say they depreciate trucks at rates of between 5-40%. And they probably capitalise some of the major mechanical work that gets done.

 

[jbocker]

Realised i have held this stock for over 12 months, and on reflection been happy with its steadiness. Better off than when i bought in, and dividends have increased marginally. One of the very few stocks in my list that can have this claim to fame.
Read through their press release, and I am happy that my reasoning for buying (back then) has held true, - now that is a rarity!

When KSC gets the ES business on track again then I will be real happy.
cheers
jb

 

[tigerboi]

Wow! There's an answer! Although they say they depreciate trucks at rates of between 5-40%. And they probably capitalise some of the major mechanical work that gets done.

that western star is an older local rigid which they use just for local pick up & delivery,they wouldnt

have much use for it these days,usually a local mud carter (tipper driver) will buy that & either put

a tipping body on it,id say it had a tautliner (curtains) on it & someone has smashed it up.

never buy a 2nd hand truck from a transport company...there is a good reason they want rid of it.

i am buying 2 new western stars & trailers after xmas & taking over the terms of an argosy & trailers

from a mate who wants to retire,my company is to be called TFL NATIONAL LOGISTICS based around

airds rd minto or narrellan or smeaton grange...after slater & gordon get me a nice pay out.

K& S need to off load DTM they dont perform well.

best place to buy trucks from are subbies that have gone out of business as many do as its not
a viable business model to own the truck but pull someone elses trailers = just like flushing money
down the toilet.

if i could find a few late model trucks well priced then i may go that way but at the moment im going new.

cheers TB

 

[So_Cynical]

Re: Greg buys again

(5th-May-2012) I picked up a few more KSC shares on the 23rd of March at $1.10 (and only now realised i didn't post) thinking i didn't want to let this second major dip get away from me like the first one did a few months before..so far the timings been perfect, brought my average price down to $1.76 and elevated KSC to my #4 portfolio stock by value.

KSC up 4.5% on today's announcement that half year on half year profit is expected to be up 25% to 30%

http://www.asx.com.au/asxpdf/20121113/pdf/42b51235xwvgrj.pdf

For the first time in over 2 years my whole KSC position is now in profit...buying good businesses at cheap prices and continuing to do so has paid off again.

Just looking at my history with this stock, i have 12 parcels with 5 of those parcels being dividend reinvestment, i took 2 large average downs at $1.56 and $1.10 that's what has turned this position around for me.

 

[Country Lad]

Been very gradual over the past 9 months or so. Another break now and looks like it will go on with it.

ff div at 5.8%.

Cheers
Country Lad

 

[So_Cynical]

(12th-April-2010) has announced a Share Purchase Plan at a reasonable discount, i figure $2.56 per share is a reasonable discount considering KSC has been going sideways between 2.70 and 3.00 for 6 months.

(April - 2011)In today at the crazy low price of $1.62 :cowboy:

Almost 3 years into this/these trade/s and finally completed today at $2.07 ~ total of 8 parcels sold, a combination of trades and dividend reinvestments, 4 winners and 4 losers, freed up a heap of cash and overall realised a trade profit of 7.14% reducing my average price per share held to $1.46

Overall a good result thanks to aggressive bottom buying, 1 entry that fluked the bottom and 2 dividend reinvestments either side of that bottom at $1.12 and $1.14 ~ gross dividend yield going forward of 9.8% with the last 2 dividends factored forward...any increase of course would up that yield to over 10%

What more could a long term, yield chasing, low cost entry and averaging contrarian ask for.

---


Yeah and KSC is still a great stock to own, great business, great growth industry, except now its getting expensive to buy into.

 

[skc]

Almost 3 years into this/these trade/s and finally completed today at $2.07 ~ total of 8 parcels sold, a combination of trades and dividend reinvestments, 4 winners and 4 losers, freed up a heap of cash and overall realised a trade profit of 7.14% reducing my average price per share held to $1.46

Overall a good result thanks to aggressive bottom buying, 1 entry that fluked the bottom and 2 dividend reinvestments either side of that bottom at $1.12 and $1.14 ~ gross dividend yield going forward of 9.8% with the last 2 dividends factored forward...any increase of course would up that yield to over 10%

What more could a long term, yield chasing, low cost entry and averaging contrarian ask for.

I guess you could have asked for a higher return than 7% in 3 years

Or buy LAU today @ 18c which closed at 22c for a 22% return in one day...