RIN - Rinker Group

[Julia]

Is anyone holding Rinker? I've been considering buying this for a while now but the fundamental signals are constantly contradictory.

Is the currency issue one of the offputting factors?

Julia

 

[noirua]

http://www.aireview.com/index.php?act=view&catid=8&id=3467&setSub=1

 

[michael_selway]

Is anyone holding Rinker? I've been considering buying this for a while now but the fundamental signals are constantly contradictory.

Is the currency issue one of the offputting factors?

Julia

Good question, imo its slowing down for sure

forecasts downgraded, only 10-15% growth in EPS per share from now on, still ok, but not specular as the past trend suggests

 

[Odysseus]

I hold Rinker (RIN), Julia, and see very little evidence of its supposed going down. The key thing to grasp is that 80% of its earnings come from the US, which represents a vast and diversified market, and the second most important thing is that the company targets its business extraordinarily well, with both a sharp focus and adaptability. It is an excellent stock indeed. Certainly worth holding, I feel, until TRUE weakness emerges, but that may take a very long time! More likely it will be a good long-term buy even now. But of course this is just one individual's view.

 

[michael_selway]

I hold Rinker (RIN), Julia, and see very little evidence of its supposed going down. The key thing to grasp is that 80% of its earnings come from the US, which represents a vast and diversified market, and the second most important thing is that the company targets its business extraordinarily well, with both a sharp focus and adaptability. It is an excellent stock indeed. Certainly worth holding, I feel, until TRUE weakness emerges, but that may take a very long time! More likely it will be a good long-term buy even now. But of course this is just one individual's view.

True, its a Hodl rather than a buy imo

its has doen really well in the past, doubling, tripling etc

but now its more like 10-15% growth per year etc

 

[Julia]

Odysseus and Michael Selway,

Yes, thank you both for comments.

I bought a couple of weeks ago on a very temporary downturn and am happy to be holding. I view it as a core stock in a long term investment portfolio.
....and then there are the pessimists and doomsayers who say it has done just too well, has to come down. We'll see.

Julia

 

[noirua]

Rinker managed to penetrate the A$18 target on Monday for the first time. The buy-back is still continuing for the present and US interest has been sustained. Looking to the ADR's this afternoon !

 

[ducati916]

Julia

I posted this on the 09-02-2006 on reef

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=2;t=000284



Rinker Group Limited (Rinker) is a manufacturer and supplier of heavy building materials in the United States and Australia. In the United States, Rinker's subsidiary Rinker Materials is producer of heavy-building materials with its principal operations in Florida and Arizona, and additional operations in 29 other states. Products include aggregate, cement, concrete, concrete block, asphalt and concrete pipe. Rinker Materials also has a gypsum wallboard distribution business in Florida. In Australia, Rinker's subsidiary Readymix is a producer of aggregate, concrete, concrete pipe and other concrete products. Readymix also holds joint venture interests in cement and asphalt operations. In China, Readymix operates four concrete plants in the Northern cities of Tianjin and Qingdao. During the fiscal year ended March 31, 2005 (fiscal 2005), Rinker Materials divested its non-core Prestress and Polypipe polyethylene pipe businesses.


Current Price ADR $62.15
Intrinsic Value $21.27 - $28.71

Generally speaking this is actually a very solid business, conservatively capitalized.

The only areas of concern really reside in three areas, the first being that it is currently overvalued.

The second being that Cost of goods & SG&A have run out of control, increasing 29% & 38% respectively, against only an 11% increase in Revenues. This has been masked to a degree by a 31% increase in Net Profits.

This is where the smoke and mirrors have been utilized. To increase Net Profits, in the face of falling Revenues, with escalating Costs, something has been pulled over investors eyes.

It is within re-investment of PP&E, Capital Expeditures, (and Depreciation remains unchanged) There has been a massive 50%+ reduction within Capital Expenditures.

This has served to;
1...hide escalating costs
2...provide the illusion of increasing profits
3...starve the business of capital expenditures

None of this will come to light anytime soon, this is a slow burn type of bomb, but unless this trend is reversed, there could be problems down the road, as further decreasing revenues in the US that are not picked up in Aus & China, combined with increased CapEx, & poorly controlled costs will impact earnings badly.

If I was holding a long position, I'd be selling.
If I was contemplating a Short position, well I just don't do shorts, but if I wanted to go long in the future, then I'd box the trade.


jog on
d998

 

[It's Snake Pliskin]

Technically it looks alright if one were to follow trends. MACD is picking up and volume of late is supporting the price. I`m using a 50 day ma as a guide and the money flow is positive.

 

[michael_selway]

Julia

I posted this on the 09-02-2006 on reef

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=2;t=000284

Rinker Group Limited (Rinker) is a manufacturer and supplier of heavy building materials in the United States and Australia. In the United States, Rinker's subsidiary Rinker Materials is producer of heavy-building materials with its principal operations in Florida and Arizona, and additional operations in 29 other states. Products include aggregate, cement, concrete, concrete block, asphalt and concrete pipe. Rinker Materials also has a gypsum wallboard distribution business in Florida. In Australia, Rinker's subsidiary Readymix is a producer of aggregate, concrete, concrete pipe and other concrete products. Readymix also holds joint venture interests in cement and asphalt operations. In China, Readymix operates four concrete plants in the Northern cities of Tianjin and Qingdao. During the fiscal year ended March 31, 2005 (fiscal 2005), Rinker Materials divested its non-core Prestress and Polypipe polyethylene pipe businesses.


Current Price ADR $62.15
Intrinsic Value $21.27 - $28.71

Generally speaking this is actually a very solid business, conservatively capitalized.

The only areas of concern really reside in three areas, the first being that it is currently overvalued.

The second being that Cost of goods & SG&A have run out of control, increasing 29% & 38% respectively, against only an 11% increase in Revenues. This has been masked to a degree by a 31% increase in Net Profits.

This is where the smoke and mirrors have been utilized. To increase Net Profits, in the face of falling Revenues, with escalating Costs, something has been pulled over investors eyes.

It is within re-investment of PP&E, Capital Expeditures, (and Depreciation remains unchanged) There has been a massive 50%+ reduction within Capital Expenditures.

This has served to;
1...hide escalating costs
2...provide the illusion of increasing profits
3...starve the business of capital expenditures

None of this will come to light anytime soon, this is a slow burn type of bomb, but unless this trend is reversed, there could be problems down the road, as further decreasing revenues in the US that are not picked up in Aus & China, combined with increased CapEx, & poorly controlled costs will impact earnings badly.

If I was holding a long position, I'd be selling.
If I was contemplating a Short position, well I just don't do shorts, but if I wanted to go long in the future, then I'd box the trade.


jog on
d998

yeah its seems even though SP is rising, P/E is also rising, currently its 18+!

Forecasts are not super great to justify the high P/E, although its not very overvalued atm. Another similar stock is LEI which has highish P/E but lowish growth prospects

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 62.8 99.6 122.8 136.6
DPS 21.0 35.0 40.2 44.6

In terms of surprises, hm Hurricane Katrina isnt in the states that RIN operates?

"Currently 80% of revenue and earnings are derived from the US. The core earning driver for RIN comes from the Florida with the other key states being Arizona and Nevada"

thx

MS

 

[ducati916]

Michael Selway

You metioned LEI, again from Reef;

I suspect the broker's god bless 'em, are probably looking at a couple of points, one, the valuation at a P/E of 25+ is pretty high for a cyclical business, (building).

The "new business" segment of their financial reports;


quote:
--------------------------------------------------------------------------------
Line Item............2003.........2004......2005
Total Revenue.......$5620.........$6004....$7703
% change...........................6.8%....23.8%
New Contracts.......$6802........$9575....$9756
% change..........................40.8%....1.9%

From a revenue perspective, a 40.8% increase in contracted new work resulted in a 23.8% increase in Revenues.

Contrasted with only 1.9% new contracted work leading into 2006
This would suggest a reduction, or falling revenues for 2006.

Profitability in the period 03/04 fell (-30.7%)
Profitability in the period 04/05 rose 97.4%

On the back of potentially falling revenues, due to a huge drop in new contracts, I would expect to see profitability drop, based on fixed and variable costs.

Qualitative Observation;
In 2004 Annual Report, management discuss the following;
"Board Commissioned Group wide audit of project risk management
"External consultant worked with management to develop best practice template

2005
Management still discussing risk management, reviewing lessons learned, etc.
Securing work at acceptable margins.

This is a worry. Contracts have been taken on at unprofitable margins
This can be verified by again, the huge drop in New Contracts taken on, and the huge variance in profitability between the two years.

Gross debt is rising.
From $37 in 2003, to $235 in 2005
This is a 535% increase in debt.
There are no figures to calculate the credit risk, but, common sense suggests that with revenues only growing marginally by comparison, this could be dangerous.

Now in the 2004 report, Depreciation and Amortization were reported;

2003 to 2004 depreciation fell by 5% and Amortization fell by a massive 37%
In 2005, these figures are "absent" from the highlights. Does not bode well.

EPS can be manipulated via changes in Depreciation & Amortization.

With an earnings yield of 3.9% against a bond yield of 7% odd, this baby is overpriced.
The volume spike was most certainly not the educated volume. It would represent very short term, to swing term traders in my opinion.

--------------------------------------------------------------------------------

Now of course the big problem with the "timing of a short trade based on fundamentals" is that the next financial reporting period will be in June.

Therefore you have to either wait for a closer release period, and short prior to the release, in anticipation of poor earnings, or, short at what you "think" may be high enough to provide a profit.


quote:
--------------------------------------------------------------------------------
The setup here is quite straight forward for those that can analyse volume. The first day marked broke higher but closed lower. One may immediately think that this was a false breakout. The problem is that is closed well off its lows and did so on high volume. This can only mean that buyers kept it off its lows. Secondly, if it were true selling then the next day it should have continued lower. It didn't. It actually traded up off its open and closed on its high, again on very high volume. Buyers are in complete control.
--------------------------------------------------------------------------------

As regards your analysis of volume, I would argue that the two or three days are just not enough time to establish the timeframe of the trader or investor purchasing at this point.

Well, it certainly won't be value hounds, it's unlikely to be longer term investors, but it theoretically could be.

That leaves shorter term, momentum traders, who are looking for momentum profits.
This "type" of volume is historically unstable, and really means nothing outside of an ill-defined holding period.

It is the variability of this holding period, that contributes to the volatility of the markets, and catches out those that really are unsure of their trading plan.

But, it is a bull market.
jog on
d998

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=8;t=000434

jog on
d998

 

[noirua]

Buys Florida based concrete block producer:

http://www.rinker.com.au/News/Rinker_acquisition_Mar211_06.pdf

 

[noirua]

Trading in RIN has been a two way struggle between the bulls and the bears since the half yearly report. Hopefully, the rise today to $17.86 heralds the next upwards leg.

 

[noirua]

Looks as if we are on the next upward leg as RIN touched a new all-time high at A$18.85. Closed in NY at US$68.20 ( ADR's x 5 ), sentiment index increased to 81.

 

[michael_selway]

Looks as if we are on the next upward leg as RIN touched a new all-time high at A$18.85. Closed in NY at US$68.20 ( ADR's x 5 ), sentiment index increased to 81.

its doing well yes, but PE is 19+ now, use to be like 15-16!

thing is they havent increased forecasts for 2007 and 2008 by much at all, so 2008 forward PE is 14, which is expensive imo, considering forecats for 2009-10 will probably be less than 10%

yield is also very low compared to others in same sector

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 62.8 99.6 123.5 136.6
DPS 21.0 35.0 40.2 44.6

EPS(c) PE Growth
Year Ending 30-03-06 99.6 18.4 58.7%
Year Ending 30-03-07 123.5 14.8 24.0%

Not much "good news" out also, is it all hype u think?

thx

MS

 

[noirua]

Hi MS: Is Rinker an Aussie Stock or an American stock? Well of course it is an ASX share. But should it not be treated on a PE equivalent to those in the States these days. If so, the PE Ratio for 2006 should be around 20 to 24.
Sentiment Index in the States stands at 75 today.

 

[StockyBailx]

Hi Julie ,

Long time no sea! A really good question, I will give you a educated guess to try and help block the confusion from above. RIN Rinker as you may well notice does very well for its self, and fudermentals suggest it will remain on a high for a very long time. only a crissis will tumble rinker. Ive had a sticky beck and notice rinker has a very strong turnover, of over $700,000,000.00. Assets of over $5 billion dollars a minumal debt of around $300,000,000.00. What impresses me the most is that RIN Rinker has a inventory turnover of 1497.44% Absolutly better long term value than most/all ASX stocks today.
As you should well know Rinker is a heavy building material group, I think originated in Australia and now based in the US with holdings of australian companies such as CSR, ReadyMix, and I think Wesfarmers group such as mita 10. So there for in my apinun RIN stands out amounst the crowd as a excellent LONG TERM investment if you have the time and money!
Best get in there now while the goings are good. I only wish I invested in rinker this time last year, when it was only around $10. Think about it up $10 dollers from last year. Up $15 this this year and so on, I would think so!
Have a look at it, if you have got it RIN /Rinker is telling you were to put it. Rinker fundermendals are very powerful, and always runs well on extended volume. A excellent investment! Never say goodbye to rinker every man and his dog needs rinker for there biulding supply and concrete. Rinker is at the forfont of the biusness and at no better time to buy before its to late!

There you go Jewls, your MONEY your TIME . I understand DOW, WOW, ZFX are also good value at this time, for much the same reason as above, givin there differance in sectors.

Good Luck and at Gods Speed.

STOCK'ie'BAILZ

Invest Wisely and not Quickly__Spot the differance!

 

[noirua]

Rinker Group have hit A$20.00 for the first time today. US brokers are estimating a price of about A$22.60 to bring the stock into line with their US equivalents.

 

[noirua]

Rinker Group closed on Wednesday on the NYSE at US$69.99 ( ADR's x 5 ) and the sentiment index surprisingly dropped to 68, falling from Bullish to marginally into the optimistic range.

 

[noirua]

Rinker have closed today at A$20, spot on. Interesting to see if they can reach the analysts A$22.50 valuation to bring them into line with similar USA stocks. USA sentiment index has moved to 77, closed in NY at US$71.03 ( ADR's x 5 ), 12 month chart looks excellent.