PRK - Patrick Corporation

[Joe Blow]

Re: Patrick Corporation (PRK)

Finished on its high for the day at $5.95 - up another 1.2% - although volume was a little lighter than usual.

$6 looks to be a crucial level for PRK, it will be interesting to see if it can sustain this upward momentum next week.

 

[RichKid]

Re: Patrick Corporation (PRK)

Finished on its high for the day at $5.95 - up another 1.2% - although volume was a little lighter than usual.

$6 looks to be a crucial level for PRK, it will be interesting to see if it can sustain this upward momentum next week.

Yep Joe, that's a nice finish and $6 is nearby, more volume would have been nice, maybe a suggestion that the sellers are holding on. Could go sideways, every cent makes a big statement when it's this close to breaking that downtrend. Still has to beat it convincingly.

BTW, for those following my trade I forgot to mention that I bought at 5.62. Again, in hindsight, I should have waited for a safer trigger (as I'm doing now) but my stop was nearby so I'm glad I've been able to move it up. PRK is volatile though and could easily gap down so I'll be keeping a close eye on things.

I'll be happy to hear critiques of my trade from a TA or Money mgmt point of view from observers or holders. This is a medium risk stock for me so a bit more of a position than with a speccy.

 

[Joe Blow]

Re: Patrick Corporation (PRK)

Yep Joe, that's a nice finish and $6 is nearby, more volume would have been nice, maybe a suggestion that the sellers are holding on.

RK, also interesting about today's trading in PRK is that the last trade at 3:59pm was actually at $5.91, and when everything settled at 4:05pm it was up 4 cents and that volume (around 212,000 shares) accounted for around 15% of the entire days trading.

An interesting finish indeed.

 

[RichKid]

Re: Patrick Corporation (PRK)

RK, also interesting about today's trading in PRK is that the last trade at 3:59pm was actually at $5.91, and when everything settled at 4:05pm it was up 4 cents and that volume (around 212,000 shares) accounted for around 15% of the entire days trading.

An interesting finish indeed.

Always nice to see the buying at the end as that's supposed to be when the smart money comes in but maybe it's just foreign buyers (or do they buy before open??). We'll soon know how this is going.

Okay, I'm about to state some very specific figures for this PRK trade, some may be stated already so just check my charts for confirmation.

I noticed the retest of recent uptrend, retest was characterised by a countertrend which has reversed forming a H&S pattern (see charts). I noticed price compressing and bought at 5.62 on Tuesday 7 June at what appeared to be the top of the final shoulder in an inverse H&S. At that time I hadn't noticed the downtrend resistance line (see my charts again). My initial stop was based on fibonnaci lines and a potential pullback from the short term uptrend being a 61.8 retracement (at just below 5.37c) from the previous week's high (circa 5.77). Stop was exit on close at 5.35c as that would mean the H&S pattern has failed. I would then wait for a retest of the uptrend support again before entering.
Reward target was previous high (a bit arbitrary) at 6.90 with RRR being 4.75. (22.75% return/4.8% loss). Loss is less than 1.5% of total capital. The ability to place the stop near some uptrend support was what made me enter with more confidence. Position size was full parcel for a medium volatility bluechip (my own classification). So more money in trade than for a speccy but less than for a slow bluechip.

My stop is now higher at 5.84, sell on close. Maybe I should just state this all in my first chart in future to make it easier to follow.

 

[RichKid]

Re: Patrick Corporation (PRK)

Here's the figures on a chart of PRK for ease of reference, this sure takes some time to post, hope the figures make sense. Let me know if I've made any errors please. Hope this helps anyone who's interested, note my errors.

 

[RichKid]

Re: Patrick Corporation (PRK)

Another chart of PRK, noticed an important long term horizontal support/resistance line near the recent price action. Ideally this is where I would have bought as the downtrend resistance and neckline have been pierced at this point. Volume is the only missing element imo, might be the prelude to a strong move (in either direction).

 

[RichKid]

Re: Patrick Corporation (PRK)

Well, the stop was well and truly triggered! Gapped down past the trailing stop, had to sell at my entry price (5.62), hence a loss (cost of brokerage). It broke down off a bearish wedge a few days ago, target should be base of wedge from what I recall of measured moves. I didn't sell on the break of the wedge as sometimes it's a false signal and it moves up rapidly after that, anyone think different? Certainly hard to predict when a stock will gap down. Next entry may be triggered soon, knowing my luck it may gap UP tomorrow!!

Anyway, the positive is that I followed the plan, that's the most important thing.

This is a well known stock and quite popular- am I the only one interested in it on ASF (apart from Joe)?

 

[GreatPig]

Re: Patrick Corporation (PRK)

RichKid,

You want to trade triggered-stop stories?

At least I've still got some profit, having bought in at $1.245. I was hoping that tiny triangle that was forming would be a continuation one.

GP

 

[RichKid]

Re: Patrick Corporation (PRK)

RichKid,

You want to trade triggered-stop stories?

At least I've still got some profit, having bought in at $1.245. I was hoping that tiny triangle that was forming would be a continuation one.

GP

Hi GP,
Let's hope we don't have many more of em! Clearly these things happen often with the more volatile stocks. Let's see what PRK does with that gap it just opened up. I notice your little baby VPG has had some very volatile days too. I guess we both knew what we were getting into with the recent price action. Good luck with the next one, keep an eye here in case I re-enter PRK.

 

[Joe Blow]

Re: Patrick Corporation (PRK)

Seems to be just holding onto support at the $5.50 mark.

I'm watching PRK again for a possible re-entry. I'll be watching for some accumulation at these levels at or above $5.50 and then a bit of forward momentum.

Any thoughts from PRK followers?

 

[RichKid]

Re: Patrick Corporation (PRK)

Seems to be just holding onto support at the $5.50 mark.

I'm watching PRK again for a possible re-entry. I'll be watching for some accumulation at these levels at or above $5.50 and then a bit of forward momentum.

Any thoughts from PRK followers?

Hi Joe,
I haven't got a signal to enter yet, basically watching the uptrend line. Not very bullish about it yet, see posts 20 & 25 for the long term uptrend line I drew, I would post my stop just below it if I was to enter now. But that's just me, not too familiar with PRK, only became a serious fan this year.

I expect a market top in the XJO soon and expect that to affect PRK so we may see the end of the multi-year uptrend. We are still in a short term downtrend imo. Long term I like this stock's fundamentals but we may be in for a bit of a volatility this year.

(PS: Note that the longterm trend line could be drawn lower (See post 20) to catch that green bar that I drew through (rather than under/touching) around the middle of the chart. That would bring support to around $5 or below).

 

[RichKid]

Re: Patrick Corporation (PRK)

What drama in just two days! A big fall following the result and then a huge gain today after the Toll Holdings takeover rumour mill re-ignited.

Does anyone that follows these two have any thoughts? Saw news reports saying Toll will want to sell off Virgin if it wins. Others say Toll will concentrate on Asian acquisitions and will be wary of competition issues preventing the merger.

 

[pokerset]

Re: Patrick Corporation (PRK)

A report in the age said Singapore airlines denied they want the airline... But i also read they could be intersted in the airline to aquire their access to the USA routes.. So looks like a win win situation..!~

 

[Julia]

Re: Patrick Corporation (PRK)

Will ASIC be taking a look at the dramatic buying and consequent rise in SP PRIOR to announcement of Toll's takeover bid just this morning?

Chris Corrigan doesn't seem the type to just lie down on this takeover offer.



Julia

 

[TjamesX]

Re: Patrick Corporation (PRK)

I'm pretty sure the significant rise would have been Toll buying on the market to get as larger pre bid stake as it could get...

 

[pokerset]

Re: Patrick Corporation (PRK)

Prices in Patrick and Toll went haywire today.. so much for the original takeover offer.. hehe

 

[doctorj]

Re: Patrick Corporation (PRK)

Heard a good story today that a London fund manager had been contacting Australian brokers asking about the Toll/Patrick deal up to a month before it was announced to the market. Makes you wonder if there is such a thing as a level playing field, doesn't it?

 

[RichKid]

Re: Patrick Corporation (PRK)

Okay folks, as you can see from some of my earlier posts I missed out on this one but I'm revisiting it.

This is just the start of a bidding war imho. With infrastructure the flavour of the month and PRK owning some gems I think we'll see some nice corporate exchanges in the next few months. I'm trying to keep track of where things are so will post some stories to get a grounding. I'm looking to get in on the action for the next run up.

Little's Patrick bid takes toll
From: By Terry McCrann
September 02, 2005

CHRIS Corrigan has hammered home the final nail in the coffin of his non-friendship with Paul Little.

If they weren't yesterday, Corrigan and Patrick and Little and Toll are now at war.
Although it was always unlikely that the iconoclastic Corrigan would stay around to work for Little if the Toll (tol.ASX:Quote,News) takeover for Patrick (prk.ASX:Quote,News) succeeded, any possibility of any ongoing relationship of any sort has now been absolutely obliterated.

The more fascinating question is how they could possibly continue to work together in their jointly-owned Pacific National rail operation - the focus of yesterday's allegations -if the Toll takeover did not succeed.

How do two bitter opponents manage a major 50-50 partnership where strategic and managerial control is split right down the middle?

The allegation simply put, is that Pacific National (PN) is being ripped off by its rail freight deal with Toll.

PN - or the Patrick half? - thought it was agreeing to provide Toll with 83 container wagons in each train. If there were any more, PN would get the revenue.
As it turned out, the trains were running 96 wagons and Toll had them all. This not only cost PN more to run - for no extra revenue.

But if PN wanted to put its own freight on those trains, it had to pay Toll full retail rates. Toll had all PN Queensland's capacity for 20 years.

According to the Patrick side, Toll was supposed to be the anchor customer for the expansion into Queensland; it turned out to be the monopoly customer.

Now the legal consequences of all this might or might not be resolved in court. "Might not", because despite the seeming seriousness of the subject, it will probably evaporate with the takeover.

Certainly so, if the takeover is successful. Patrick and PN become wholly-owned or almost wholly-owned by Toll, and anything the right hand might have been taking from the left becomes moot.

It's a very different matter into the offer. For the issue has greater significance than Toll tried to claim last night.

Toll calculated down Patrick's claimed potential $510 million revenue loss over 20 years to PN, to a net present value profit figure of less than $20 million. Only half would be attributed to Patrick: irrelevant in the bid scheme of things.

But that "calculation" is very easily challenged. The nature of Patrick's claim is that most of that revenue number would fall to the profit line. To get it, PN doesn't have to spend much more.

Discount that back and you get a much higher figure. So if Toll did have to reimburse PN, Patrick's half-share in it would be worth much more.

And that would be very relevant to both sides of the offer. It would make the Toll shares being offered as consideration worth something less; and the Patrick shares worth something more.

Then there's the question of the ACCC. It's already deeply worried at the potential anti-competitive consequences of this mega-transport merger.

Its concerns are likely to be raised by the news that PN's expansion into Queensland was based, wittingly or unwittingly, on Toll having a monopoly of access to its trains.

CSFB Raises Patrick Target Price To A$7.37

Thursday, September 01, 2005 7:01:47 PM ET
Dow Jones Newswires

0853 [Dow Jones] STOCK CALL: Credit Suisse First Boston raises 12-month target price for Patrick (PRK.AU) to A$7.37 (from A$5.80), the point at which PRK acquisition is EPS neutral for Toll (TOL.AU) in FY06. CSFB sees Toll takeover as more of a benefit to Toll shareholders than to PRK's, believes PRK may consider selling down its Virgin Blue (VBA.AU) stake to try to derail hostile takeover. CSFB also says ACCC's review unlikely to prevent takeover, although undertakings may have to be given. CSFB keeps Neutral call on Patrick. PRK last at A$7.05. (BBA)

 

[RichKid]

Re: Patrick Corporation (PRK)

Interesting interview, as the WMC affair showed it's only just started. With lots of infrastructure players in the market this could take some time. If you don't want to read the transcript you can watch the video via the link at the foot of the extract.

Pair in transport battle
Date : 28/08/2005
Reporter: Stephen Long

ALAN KOHLER: Well, it's not often that the shrewd and tough Patrick Corporation boss, Chris Corrigan, finds himself railroaded particularly by a business partner. But this week surprise and hostile $4.6 billion takeover bid from Toll Holdings' Paul Little leaves Mr Corrigan on the defensive and facing the very real prospect of being shunted out of the transport empire he has built. Stephen Long reports.

STEPHEN LONG: It's been two years in the planning and Monday was D-Day for an audacious player that could transform the transport industry. Toll Holdings' results briefing is usually a pretty low key affair on the corporate calendar but with its boss Paul Little announcing a hostile bid for Chris Corrigan's Patrick Corporation, the Sydney presentation became a blockbuster.

PAUL LITTLE: Market speculation has been constant about the merging of Toll and Patrick and today I'm pleased to announce that we are proposing an acquisition.

STEPHEN LONG: If Toll pulls it off, it will become the fourth biggest transport and logistics company in the world.

PAUL LITTLE: Specifically the merged business will have a market cap of around $8.6 billion making the company a top 25 ASX listed entity and a strong financial capacity for future growth initiatives.

STEPHEN LONG: Toll's bid has turned tables on Chris Corrigan who with docks and railways and a passenger airline seem to be the budding transport tsar. Now, Mr Corrigan could lose it all. And Paul Little could become a modern day Vanderbuilt.

KEVIN CHINNERY: You'll have a very, very large company offering transport and distribution services in so many different areas on such a scale that nobody else is really going to come close to competing with them.

STEPHEN LONG: If it swallows up Patrick, Toll will become the only operator offering end-to-end transport from dock to shop, a seemless web of boats, cranes, planes, trains and automobiles. But the ACCC may not think a vertically integrated transport behemoth is such a good thing.

CHARLES DALZIELL: Well, I think there's certainly a lot of things that the ACCC have to look at.

STEPHEN LONG: And competitors are already voicing concerns about what the takeover will mean.

PETER FOX: Absolutely, absolutely lessening competition and definitely a consolidation of power in one organisation in the industry.

STEPHEN LONG: When Paul Little spoke to Inside Business a few days after launching the Patrick bid, he was still on a high and still wearing the same tie.

PAUL LITTLE: It has been incredibly busy of course, but also very positive and I think quite rewarding, getting some excellent feedback from those that we have been talking to.

STEPHEN LONG: How are institutional investors reacting?

PAUL LITTLE: Well, they are reacting pretty much I think the way you would have expected. We have had no one being critical of the logic that sits behind what we are doing and a lot of support about the creation of this cross-border logistics capability.

STEPHEN LONG: Even though Chris Corrigan's people have been bad mouthing the bid in private briefings far and wide. How do you respond to the criticisms coming from Corrigan camp?

PAUL LITTLE: What criticism is that?

STEPHEN LONG: Well, they are saying that Patrick has got good high value assets and Toll has essentially been cobbled together through acquisitions.

PAUL LITTLE: Well, that's a little bit harsh given that the Patrick Group have in fact spent $1.7 billion on acquisitions in the last five years and I think Toll spent some $800 million.

STEPHEN LONG: There are plenty who think the $6.70 a share offer is well shy of the money.

CHARLES DALZIELL: I would say in its current form it's got virtually zero chance of success.

STEPHEN LONG: Charles Dalziell at MMC Asset Management, says you can't underestimate the Corrigan factor, shareholder support for the man who took on the maritime union and transformed productivity on the docks.

CHARLES DALZIELL: Chris Corrigan since 1997 has delivered 40 per cent per annum plus compound annual growth to his shareholders and I think combined with the strength of the assets that he has that just means that there's going to be some very, very loyal shareholders who just love Chris Corrigan and what he has been doing there and love the assets that are in the Patrick business and, you know, won't budge for a low ball bid.

STEPHEN LONG: But of course there's loyalty and then there's business. Behind me is Patrick's Sydney container terminal at Port Botany, one of the key assets that Toll is seeking to acquire. If Toll gets the Patrick prize, it will control 40 per cent of the nation's docks as well as 100 per cent of the rail freight business, Pacific National, which dominates the market in key states. It's a vast reach.

Toll's major rival Linfox is building a new warehouse just up the road from the Port Botany container terminal. When I spoke to him there, Linfox chairman Peter Fox said he didn't want to pre-empt the ACCC's inquiries but his own views were clear.

PETER FOX: Definitely, yes. I do have concerns about the further consolidation of power of one organisation in the industry across road, rail, sea and air.

STEPHEN LONG: So at the end of the day, push come to shove, you don't think one company should have so much power?

PETER FOX: That's absolutely right.

STEPHEN LONG: The plan has been given the thumbs up by the nation's biggest grocery chain.

PETER CORBETT: I think that the Patrick Toll merger if it goes ahead or purchase whichever way you like to look at it, will be a step in building greater efficiency in the all important logistics movement in Australia.

CHARLES DALZIELL: It surprises me that Roger Corbett comes out and says he's looking forward to the lower costs to his business involved in this deal, and it seems counterintuitive to me that you can hand somebody a whole lot more power over the whole logistics and distribution part of the business and expect there to be lower costs associated with that. Monopolists don't tend to be well renowned for passing on their monopoly profits to their customers.

STEPHEN LONG: The ACCC has already received complaints from small trucking operators claiming the existing port and rail freight duopolies grant their own trucks preferential access, but Toll scoffs at suggestions it could or would abuse its market power.

PAUL LITTLE: If we alienate, either by market behaviour or through price concerns or even service concerns, if we alienate those customers they will simply take their business elsewhere. There are other choices available to them.

STEPHEN LONG: If the ACCC doesn't reverse the Toll bid or make an offload assets, you still can't write off Chris Corrigan. He and Patrick chairman Peter Scanlon are well schooled in the art of bare-knuckle takeover brawling.

KEVIN CHINNERY: He's certainly well capable of mounting a counter attack on Toll. I mean, we all know him of old and he is an audacious player. He could well turn up with a white knight of some sort.

STEPHEN LONG: Then there's the possibility of a third player.

CHARLES DALZIELL: A stevedoring asset like the one Patrick owns running the ports would be very attractive to a Macquarie Bank or a Babcock & Brown. I mean, they could package that up and do their financial engineering tricks and create a lot of value.

STEPHEN LONG: Paul Little has been scrupulously polite about Chris Corrigan all this week, though it's not clear how well they get along.

PAUL LITTLE: Were we friends? Look, I'm not quite sure what you mean by friends but the relationship I think has been sound. We don't mix socially outside of the business environment but I would regard Chris as a person who is very proud, has made a huge impact on this industry and one that we would love to have still with us post the outcome of the transaction.

STEPHEN LONG: But as this plays out you get the feeling there could be a lot of blood under the dock and the rivals may not want too much truck with each other over the long haul.


---------
VIDEO at foot of this page: http://www.abc.net.au/insidebusiness/content/2005/s1447774.htm

Toll Holdings' Paul Little and Patrick Corporation's Chris Corrigan have vastly different personalities. But both men share the same business aim - to build Australia's biggest road, rail, port and aviation conglomerate.

 

[RichKid]

Re: Patrick Corporation (PRK)

The basics of the first offer below, PRK sought clarification today.

Analysts see Toll-Patrick breakdown
SMH September 2, 2005 - 6:25PM

......Meanwhile, Patrick on Friday asked Toll to clarify whether or not its proposed in specie distribution of Virgin Blue shares formed consideration as part of its takeover offer or whether it was simply a statement of Toll's future intentions.

Patrick holds the controlling stake in airline Virgin Blue.

Toll has made cash-and-scrip offer that initially valued Patrick shares at $6.70 each.

Toll is offering 0.4 of its shares and 75 cents for each Patrick share.

Patrick shareholders will also receive an in specie fully franked special dividend from Patrick of 0.3 Virgin Blue shares for each Patrick share.

Toll shares were 17 cents lower at $13.91 on Friday. Patrick was 15 cents lower at $6.90.
.....