MGW - McGuigan Simeon Wines

[michael_selway]

Gents, when it gets to 50 cents, lets all chip in a take 30% ish. Then we can drink the profits...or at least have some nice real estate to retire on.

One to watch for a turn around I think. Or, if we notice some unusual volume, a takeover perhaps. I wouldn't touch it until I see some higher lows and highs at this point however....

Hm which companies do you think may takover thsi one?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -4.8 3.2 11.8 19.5
DPS 0.0 0.0 0.0 7.0

thx

MS

 

[Sean K]

Hm which companies do you think may takover thsi one?

I think FGL would be held up by the anti competitive mob. Maybe even Lion Nathan. Perhaps then an offshore...San Miguel? Pernod Richard?

 

[Sean K]

This is getting pretty ugly for long term holders.

Anyone still hanging in there?

Will be interesting to see what happens with this.

 

[Chief Wigam]

The perfect down trend. You would have to have nads of steel to be long on this. Sell. imho. Good luck to all but I am short.

 

[Rainmaker2000]

I'm not sure what the chart or the tea leaves tell us........but I cut my losses on MGW a while ago, and quite unhappily..........I bought it as a contrarian play as it was trading around 'asset value', I had been following since it traded at 6$ and I still believe it to be one of the best and lowest cost operators in the industry.....however.........when I was comparing the past profit statements to the cash flow statements, a very, very rude picture was appearing........it appeared that our pal Mr McQuigan and the employed family members weren't exactly giving shareholders an accurate picture....infact McQuigan has not been positive cash flow for years even through acquisitions and takeover speculation.....and I didn't appreciate Mr McQuigan selling all his stake by way of a cunning put option for reason of 'illness'....I know it may appear to late to sell but unfortunately there are honest companies and then there are the others....

 

[Chief Wigam]

I agree with you rainmaker. Too many other good opportunities out there. This bull market has more to run. I am still short MGW.

 

[pch]

I almost bought these back over a year ago near the last $2ish bottom and of course glad I did not..

The loss this year is actually a bit worse IMO because it doesn't involve a major inventory write down. (Operational performance was actually better in 06 than 07, its just they wrote down 44mil of inventory)

Who think the assets are fair value now? I still worry about the remaining inventory (177mil) and I can see this one dropping further, simply because of the uncertainty over the value of these assets - its hard to pick a bottom.

 

[Rainmaker2000]

Tough to know the value of 'assets' in this industry as the entire sector seems subeconomic.......MGW is one of the sectors better performers and have a query over whether its assets and shareholder funds have made a profit in any of the last 5 years....cashflow should be the key indicator for this dishonest company

 

[pch]

indeed - at least operational cashlflow is positive (but thats the one that is much sicker this year than last and worries me). I tend to look at that, from the perspective that investment cashflow 'should' derive benefits in later years.

 

[Sean K]

No matter what the funnymentals say this stock is going in either one of two directions IMO:

1. Takeover
2. Administration

Worth watching the volumes to capitalise on a takeover.

 

[barrett]

Kennas was that comment purely from a technical point of view? Because on the fundamentals another cause for concern is that current cash flow won't even nearly cover the interest payments on their $153M debt.. can't keep that going for too long, unless they sell some more assets

 

[Sean K]

Kennas was that comment purely from a technical point of view? Because on the fundamentals another cause for concern is that current cash flow won't even nearly cover the interest payments on their $153M debt.. can't keep that going for too long, unless they sell some more assets

I'm only assuming that because the sp has come off so far that their assets will becoming more and more valuable. Perhaps someone maybe looking to purchase them, keep the best bits, and sell off the rest....

 

[Sean K]

Chart update.

Nothing to see here, just a company imploding.

Move on, move on...



One of FPs best picks that I've seen. Reco at $3.00 ish.....

 

[Sean K]

1005 [Dow Jones] JPMorgan says current McGuigan Simeon (MGW.AU) share price assumes company will fail, given that broker's estimate of current liquidation value on MGW's asset base is A$1.85 per share. "This underpins long-term value in the stock," analyst says. "It also means that the company's banks are unlikely to wind the company up, as they have more than enough asset backing to allow MGW to trade its way out of the current industry difficulties." Adds, however, until earnings recover, the stock is unlikely to perform. "Hence we believe MGW remains a stock for deep value investors with long investment horizons (3 years)." Maintains at Overweight; last trade A$1.22, down 1 cent. (SVM)

Any 'deep value investors' out there? LOL

So, current asset base valued at $1.85, and it's current sp is $1.22. Someone just has to be looking at em....

I'm just watching with interest, I'm not a 'deep value investor' at the mo.

 

[blaze87]

i think what they meant by deep value investors are those who only looks for a baragin without looking at the company...
obviously this company do not have a competitive advantage..
long term debt piling up
profit going down
go figure it out urself

 

[Rainmaker2000]

I can't believe I'm defending these guys but here goes...hehe....I would not consider buy as its a dishonest company, but for those who follow listed wine stocks, MGW is a better performer and may be the only one left on the ASX after all this...hehe.....they actually operate off some of the lowest cost bases in the world, its just that their more expensive wines cost $15 full price........they do a lot of bulk wine too, which Woolies and Coles has been killing them on....but once other less efficient operators go belly, yes I referring to you Evans & Tate, MGW might actually have some bargaining power

Either way, stay away in this market, there are gems falled from the sky every week......I've recently been buying a stock on a PE of almost 2.....now I've never seen that before..hehe

 

[ScottAnders]

Any discussion on MGW after yesterdays efforts? Seemed like a pretty strong day (and close) to me. I'd love to hear some opinions.

 

[Sean K]

Any discussion on MGW after yesterdays efforts? Seemed like a pretty strong day (and close) to me. I'd love to hear some opinions.

Seemed to be a pretty positive ann yesterday, indicating that the worst may be over.

Australian Wine Industry Showing Signs of Recovery:
McGuigan Simeon trading positively through difficult conditions​

The market obviously thought so. Up 13% on huge volume.

Could it be a bottom? Time will tell.

Would like to see their AGM presentaion coming up.

 

[badmarty]

I would stay away from this stock! I'll tell you guys about my dealing with them. I am currently working in Poland and we are doing a fitout for a supermarket chain, I spoke to one of their managers about why they dont stock Australian wine and he said he would be interested in looking at it especialy cheaper lines and cask wine. I contacted MGW and spoke to their a/c manager for Europe who said he would send me some prices but never did. I tried to contact him a couple more times but never got an answer. I contacted a couple more wine producers and they were more than happy to do a deal. It seams crazy for me for a company like MGW that is strugling with their sales to ignore any opportunity like that.

 

[Sean K]

I would stay away from this stock! I'll tell you guys about my dealing with them. I am currently working in Poland and we are doing a fitout for a supermarket chain, I spoke to one of their managers about why they dont stock Australian wine and he said he would be interested in looking at it especialy cheaper lines and cask wine. I contacted MGW and spoke to their a/c manager for Europe who said he would send me some prices but never did. I tried to contact him a couple more times but never got an answer. I contacted a couple more wine producers and they were more than happy to do a deal. It seams crazy for me for a company like MGW that is strugling with their sales to ignore any opportunity like that.

I'm not sure if one isolated incident in Poland is an indication of the companies overall management, business model, and future prospects. Nice story though. Perhaps if we get a hundred or so of these we can slap a sell on it? Cheers, kennas