Australian (ASX) Stock Market Forum

RIN - Rinker Group

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Rinker Group are being dragged down on the ASX despite efforts to move up on the NYSE: Finished at US$80.80 ( ADR, 5 shares ) with the sentiment index at 81 and the stock score at 81, that equates to A$20.96 a share, at spot A$1.2965 to the greenback.
Trading today on the ASX at around A$20.54.
 
noirua said:
Rinker Group are being dragged down on the ASX despite efforts to move up on the NYSE: Finished at US$80.80 ( ADR, 5 shares ) with the sentiment index at 81 and the stock score at 81, that equates to A$20.96 a share, at spot A$1.2965 to the greenback.
Trading today on the ASX at around A$20.54.
Click to expand...

Don't see any reason why they won't bounce back when the overall market sentiment changes. Almost my whole portfolio is a sea of red today after being all in the black a couple of days ago.

Julia
 
Julia said:
Don't see any reason why they won't bounce back when the overall market sentiment changes. Almost my whole portfolio is a sea of red today after being all in the black a couple of days ago.

Julia
Click to expand...

Hi Julia, pleased to see you have confidence in RIN, as the fall, against the back drop of bullish forecasts in the US has been a bit of a worry. The Aussie market has been bearish with the less traded NYSE struggling to stay at high levels.
Opened on the NYSE at US$77.90 and now struggling back at US$78.66.
 
Rinker Group are recovering well from the Aussie sell-off and have now reached A$21.20.

Closed on the NYSE at US$80.95 ( intra-day high was US$83.30 ) and the sentiment index standing at 79.
 
Julia said:
Macquarie have a Buy on them with a target price of $24.50

Julia
Click to expand...

Rinker have moved to A$21.50 and the ASX is looking more likely to drive the price on.
 
Rinker Group, closed at an all-time high, in the States, of US$83.43. The sentiment index reached 83 with a signalscore of 98.
 
Results are out.

Revenues up 18.5% on previous period.
Net profit up 50.1% on previous period.

Final dividend 24c
Special dividend 40c

record date is 9th June.

Also proposing a 50c capital return (needs ATO and shareholder approval).

Rod.
 
RodC said:
Results are out.

Revenues up 18.5% on previous period.
Net profit up 50.1% on previous period.

Final dividend 24c
Special dividend 40c

record date is 9th June.

Also proposing a 50c capital return (needs ATO and shareholder approval).

Rod.
Click to expand...

Yeah I noticed, however it dropped a bit today, not sure why

The only thing that still worries me is contrast between the CEO 2007 forecast growth of 13-21% and the current Consensus forecast 27%

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 62.8 105.4 134.6 145.2
DPS 21.0 35.0 40.0 47.0

EPS(c) PE Growth
Year Ending 30-03-06 105.4 20.3 67.9%
Year Ending 30-03-07 134.6 15.9 27.7%

The thing is, they are paying a special dividend and capital return, so this means they are not looking to expand by aquisitions this year?

thx

MS
 
http://www.bloomberg.com/apps/news?pid=10001065&sid=akYj5HiyfKmk&refer=movers_by_index

Rinker, Australia's biggest building materials maker, slid 33 cents, or 1.5 percent, to A$21.07. The company said fourth-quarter profit rose 49 percent on booming demand in the U.S. The company plans to return $614 million to shareholders. Rinker repeated last month's forecast of earnings per share growth of as much as 21 percent to 92 cents for the year ahead.

``There may have been an expectation that Rinker was going to further revise up earnings, which they didn't do,'' said Rob Patterson, who manages the equivalent of about $2.6 billion at Argo Investments in Adelaide, including Rinker shares.

All five Australian stocks that were added to Morgan Stanley Capital International's global indexes today, including Zinifex Ltd., gained on speculation their inclusion will lure some of the more than $3 trillion in funds benchmarked to the MSCI measures. The changes will take effect at the close of trading May 31.

WorleyParsons, Paladin

Zinifex, the world's second-biggest zinc producer, rose 57 cents, or 4.5 percent, to A$13.34. Zinifex has surged 342 percent the past year as zinc prices have climbed to a record.

WorleyParsons Ltd., an engineering company that services the oil and metals industries, rose 11 cents, or 0.6 percent, to A$19.51. It has climbed 172 percent the past 12 months as mining services companies benefit amid a global resources boom.

Goodman Fielder Ltd., Australia's largest baker, gained 4 cents, or 1.8 percent, to A$2.24. The stock has gained 9.8 percent since listing on December 19. In March the company said it's ``on track'' to meet its full-year profit forecast after boosting earnings from bread and groceries.

Paladin Resources Ltd., a uranium explorer, jumped 28 cents, or 5.7 percent, to A$5.18. The shares have surged 389 percent the past year on speculation it will benefit from the government's decision to allow uranium sales to China.

ABC Learning Centres Ltd., Australia's largest child-care provider, added 19 cents, or 2.5 percent, to A$7.88. It's gained 49 percent the past year as the company has spent about A$730 million on seven acquisitions in Australia and the U.S. the past two years.
 
http://www.smh.com.au/news/business...rowth-is-harder/2006/05/14/1147545210807.html

Rinker's no stinker but buying growth is harder
Email Print Normal font Large font By Malcolm Maiden
May 15, 2006
Page 1 of 2 | Single page
BOND STREET

Advertisement
AdvertisementIT TOOK investors a while to work out the strategy behind CSR's spin-off of Rinker early in 2003, but those who did have been very handsomely rewarded.

Since Rinker made its debut, its shares have risen by 330 per cent, comfortably outdistancing a 171 per cent rise in the Materials index, which houses comparable companies such as Boral but also resources stars such as BHP Billiton and Rio Tinto.

Rinker has thrashed the ASX 200 index, which has risen by 83 per cent over the same period.

The performance reflects the fact that Rinker CEO David Clarke has pretty much done what he said he would do when the group became independent: continue to expand in the US, but only in markets that offer above-average growth and deliver results that encourage a revaluation of Rinker's shares to bring them into line with US competitors.

Last week, however, Clarke discovered just how wary investors are becoming.

He produced another superb result, paid shareholders gobs of cash, and then saw his shares fall by 2 per cent to $20.94, almost 6 per cent below their high of $22.22, set late last month.

US dollars are the best way to measure Rinker's progress because 79 per cent of its revenue and 85 per cent of its profits come from America.

In US dollars, revenue in the latest year was up 19 per cent, earnings before interest and tax were up 48 per cent and net profit was up 50 per cent.

The group generated $US679 million of uncommitted cash, 63 per cent more than the year before. Since the spin-off in 2003, revenue has risen by 72 per cent, to $US5.1 billion, EBIT has gone up 191 per cent to $US1.15 billion, and net profit has risen by 244 per cent to $US740 million.

Rinker produces materials that are used by road builders and housing and commercial construction companies: cement, concrete and concrete building blocks, pipes and other pre-fabricated construction items, road aggregate and asphalt.

It has built or is building major market share in American states including Florida, Arizona, Nevada and Texas that have faster growing populations, faster than average economic growth, and consequently robust demand for construction materials.

Expansion has been incremental, but persistent: within CSR between 1998 and 2003 and in its own right since then, Rinker has made 47 acquisitions worth $US1.9 billion.

The perceived weak spot in last week's profit result was that Clarke noted that the US housing market was softening slightly (although still growing), and the asking prices for businesses in the areas Rinker wants to expand in were too high.

While Rinker waits for deals at the right price it is returning spare cash to shareholders, beginning with a $US341 million ($455 million), 50c a share capital return, and a special 40c a share dividend that soaks up $US273 million.

The negative sharemarket reaction partly reflects the fact that there is general nervousness about how far share prices have run in 2006: that concern will be a force in the market again today, when Wall Street's Friday sell-off feeds into local prices and pushes them lower.

It also reflects concern that the revaluation of the group to bring it into line with US peers in the basic materials industry has largely run its course just as the group signals that its options for continued expansion by acquisition are being limited by "unrealistic" price tags.

Rinker was a steal three years ago, just after the spin-off. Its shares were selling for less than $5 each, less than 10 times expected earnings in 2003-04. At the same time, shares in three US competitors, Vulcan, Martin Marietta and Florida Rock, were changing hands for between 12 times and 14 times expected earnings.

Valuations have expanded across the board in the bull market in ensuing years but Rinker has also narrowed the valuation gap, as planned. Its shares are now priced at 16.9 times expected earnings in 2006-07, compared with 18.6 times for Vulcan, 18.5 times for Martin Marietta and 19.3 times for Florida Rock.

Companies can also be valued by comparing their enterprise value (ie, market value plus debt) to their cash flow (or earnings before interest, tax, depreciation and amortisation): on that measure, Rinker has come from being not much more than half the value of the three US groups in 2003 to a similar value, with an enterprise value-to-EBITDA multiple of almost 10 times, up from 4.8 times in 2003.

The re-rating has been achieved despite a slower internationalisation of Rinker's ownership than expected. The group was only 17 per cent foreign- owned when it spun out of CSR, including US ownership of only 5 per cent.

The target was foreign ownership of 50 per cent but non- Australians still only own 40 per cent of the group. US shareholders own about 25 per cent of issued capital, down from a peak of about 30 per cent.

The sum of all these parts is that the days when Rinker shares were a screaming buy are gone but there still appears to be room for gains.

Rinker is a great success story in a market Australian companies have had trouble cracking in the past, and US and European investor interest should rise over time, as the group executes its strategy of targeting high growth markets in a disciplined way.

Rinker should continue to be rated at least as highly as the companies it competes with in the US. And it has beaten them in the past five years for revenue and profit growth and on both sides of the Atlantic in the year to March with its return on equity of 27.6 per cent.

While Rinker waits for deals at the right price it is returning spare cash to shareholders, beginning with a $US341 million ($455 million), 50c a share capital return, and a special 40c a share dividend that soaks up $US273 million.

The negative sharemarket reaction partly reflects the fact that there is general nervousness about how far share prices have run in 2006: that concern will be a force in the market again today, when Wall Street's Friday sell-off feeds into local prices and pushes them lower.

It also reflects concern that the revaluation of the group to bring it into line with US peers in the basic materials industry has largely run its course just as the group signals that its options for continued expansion by acquisition are being limited by "unrealistic" price tags.

Rinker was a steal three years ago, just after the spin-off. Its shares were selling for less than $5 each, less than 10 times expected earnings in 2003-04. At the same time, shares in three US competitors, Vulcan, Martin Marietta and Florida Rock, were changing hands for between 12 times and 14 times expected earnings.

Valuations have expanded across the board in the bull market in ensuing years but Rinker has also narrowed the valuation gap, as planned. Its shares are now priced at 16.9 times expected earnings in 2006-07, compared with 18.6 times for Vulcan, 18.5 times for Martin Marietta and 19.3 times for Florida Rock.

Companies can also be valued by comparing their enterprise value (ie, market value plus debt) to their cash flow (or earnings before interest, tax, depreciation and amortisation): on that measure, Rinker has come from being not much more than half the value of the three US groups in 2003 to a similar value, with an enterprise value-to-EBITDA multiple of almost 10 times, up from 4.8 times in 2003.

The re-rating has been achieved despite a slower internationalisation of Rinker's ownership than expected. The group was only 17 per cent foreign- owned when it spun out of CSR, including US ownership of only 5 per cent.

The target was foreign ownership of 50 per cent but non- Australians still only own 40 per cent of the group. US shareholders own about 25 per cent of issued capital, down from a peak of about 30 per cent.

The sum of all these parts is that the days when Rinker shares were a screaming buy are gone but there still appears to be room for gains.

Rinker is a great success story in a market Australian companies have had trouble cracking in the past, and US and European investor interest should rise over time, as the group executes its strategy of targeting high growth markets in a disciplined way.

Rinker should continue to be rated at least as highly as the companies it competes with in the US. And it has beaten them in the past five years for revenue and profit growth and on both sides of the Atlantic in the year to March with its return on equity of 27.6 per cent.
 
Hi M_S, Excellent posts: only hope for RIN escaping further falls is a pick-up of news in the States.
 
Rinker have not done badly despite the sea of red on the LSE and NYSE. Down just 0.4% at US$77.63 with a declining sentiment of 75.
 
Rinker are holding up with the strengthening US Dollar today. Should recover slightly to the A$20 level.
 
Rinker have declined further in the States to US$69.31, sentiment down to 65 and signal stock score at a lowly 57. The next major support level was at about US$70.00.
 
noirua said:
Rinker have declined further in the States to US$69.31, sentiment down to 65 and signal stock score at a lowly 57. The next major support level was at about US$70.00.
Click to expand...

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 106.7 133.8 137.9 149.4
DPS 104.3 45.6 48.1 50.8

Was before

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 62.8 105.4 134.6 145.2
DPS 21.0 35.0 40.0 47.0

thx

MS
 
Rinker Group are still standing close to the decisive chart position of US$70.00. Down to US$68.39 in early afternoon trading on the NYSE with the sentiment index further down at 51 and the signal stock score at 30.

A further decisive mark is on 23rd July when the stock goes X the capital return to be paid on 7th August.
 
What's going to support RIN after Friday ??

would say its parachute is those waiting for "record day"
then the chute will probably implode come Mon/Tues

good CFD stock to Short !
 
coyotte said:
What's going to support RIN after Friday ??

would say its parachute is those waiting for "record day"
then the chute will probably implode come Mon/Tues

good CFD stock to Short !
Click to expand...

Latest forecast, approaching fair value (fwd PE 10). Not so expensive anymore ;)

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 106.7 132.5 142.3 149.4
DPS 78.0 45.6 48.4 51.3

thx

MS
 

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