RIN - Rinker Group

[ducati916]

From page one, the fundamentals told the story a long time ago.

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

 

[michael_selway]

From page one, the fundamentals told the story a long time ago.

Quote from another forum

went to a training seminar on the asx,put on by the suppliers of the charting package I have.
The guy running it ,who claims to be a good analyst(his claim)looked at the chicken entrails on rin,claiming he new nothing other than the charts,reckons rin could be in some kind of trouble not generally known.
On the other hand he claimed MBL had been heavily bought by other Maquarie funds,thus driving the share price higher,with other fund managers following their lead to maintain their weighting.
He sees mbl staying around $60.00-$62.00,maybe a bit less because the fund buying has stopped and so the shares have dropped.
Interesting to see how things pan out,one t/a,the other part t/a plus what he claims to know through his analysis job.
He also pointed out general information only,not financial advice.
Brian

thx

MS

 

[noirua]

ADR US$50.65 is the price that Rinker start trading on the NYSE in 90 minutes - equates to A$13.21 per share at 0.7664. The buy-back of 45 million shares starts 18th August on the ASX.

 

[Fab]

WHat will be the benefit of participating in the buy back ?

 

[3 veiws of a secret]

WHat will be the benefit of participating in the buy back ?

Are you refering to Rinker the Company or Rinker the shareholder?

 

[noirua]

Rinker trade at ADR $48.69 - the sentiment index stands at an all-time low of 20 - and has fallen decisively below the US$50 level.

A report on Bloomberg placed Rinker as a buy, purely due to the opinion that the stock is now oversold and prospects are better than some, of the many analysts predict.

I'm tempted to buy a few more but do not like the Middle East situation.

 

[3 veiws of a secret]

I'm tempted to buy a few more but do not like the Middle East situation.

You make it sound like your not going to trade because of the conflicts in the Levante ,but why not? Also Rinker gains a large of mount of income from North America,and a dribble from OZ. Happy trading !!! yesterday was bad day in my books!

 

[noirua]

You make it sound like your not going to trade because of the conflicts in the Levante ,but why not? Also Rinker gains a large of mount of income from North America,and a dribble from OZ. Happy trading !!! yesterday was bad day in my books!

I changed my mind and added a few more Rinker shares first thing today. The outlook in the last quarterly report makes them look good, imho.

 

[3 veiws of a secret]

I changed my mind and added a few more Rinker shares first thing today. The outlook in the last quarterly report makes them look good, imho.

You've done well ,at least you've confirmed my paranoia is only temporary.My graph re: RIN's decline looks like Mt Doom,I just hope the revolt from shareholders has decipated.Looking forward to overnight prices in NY.

 

[michael_selway]

You've done well ,at least you've confirmed my paranoia is only temporary.My graph re: RIN's decline looks like Mt Doom,I just hope the revolt from shareholders has decipated.Looking forward to overnight prices in NY.

Do you think it will drop more in the ST?

thx

MS

 

[swingstar]

I'm short RIN. Technically there is no bottom in sight, so I don't see any reason for it to reverse. And I'm very bearish on the US housing market.

 

[noirua]

I'm short RIN. Technically there is no bottom in sight, so I don't see any reason for it to reverse. And I'm very bearish on the US housing market.

Interest rates rose to 4.75% in the UK as growth has bounded in the last 3 months. Rises in Gas and electricity prices have fuelled inflation.
Yes, I'm bearish on the US housing market in some areas, not as bearish as yourself, but Rinker appear to be selling into stronger areas.
If the share price was $20 they'd be expensive, at under $13 it may prove to be a different matter.

 

[swingstar]

Interest rates rose to 4.75% in the UK as growth has bounded in the last 3 months. Rises in Gas and electricity prices have fuelled inflation.

That can't be good for RIN?

Yes, I'm bearish on the US housing market in some areas, not as bearish as yourself, but Rinker appear to be selling into stronger areas.
If the share price was $20 they'd be expensive, at under $13 it may prove to be a different matter.

I don't use FA at all, but I am interested in current economics, and there are many reasons for my thoughts on the US housing market. Of course it's just opinion.

Technically though, there has been a lot of volume recently which has made it a bit choppy, but it's still downtrending and even more interestingly has been trending against the recent XJO rallies. Since I am bearish on the whole market, I don't see any reason for RIN to go against it if it can't go with the tide now.

If I'm wrong, my stop gets hit and I'm out - no big deal. But I don't see any reason for a bottom, both technically (although Nick's EW analysis is interesting) and fundamentally (at least as far as their revenue from housing goes).

Just my

 

[3 veiws of a secret]

Do you think it will drop more in the ST?

thx

MS

Unfortunatetly the market follows it's on rules,but I hope it's stabilsed ,sure 50 cents (in OZ) this way or that ,but who am I to predict accurate thoughts for others.

 

[dubiousinfo]

Nicks comments need to be considered in relation to short term price.

However, in respect of revenue & earnings in the medium term it also needs to be considered that the products produced by RIN are used considerably more extensively in non residential construction than in residential construction.

While residential construction has slowed, non residential construction starts to Jun 06 have increased in both Aus & US. Also keep in mind that non residential projects span 1 to 2 years once commenced.

In respect of Ducati's comments on the reduction of spending on PPE, This is a valid point, but I think more information is required to prove the case. The products manufacted by RIN require large capital outlays to establish & upgrade, however there are extensive periods between upgrades which only require maintenance and do not require the same capital outlay. I am not aware of how the reduction was achieved & would like to hear if anyone has details.

I dont hold RIN just my

 

[scsl]

did anyone notice RIN today? while the market fell 1.20%, RIN held up pretty well and ended down 5 cents (0.4%).

i was almost certain RIN would fall over 2% (as it has been accustomed to lately). the pause in US rates will help RIN but the slowing growth in the US (which was partly why the Fed left it unchanged) won't.

 

[noirua]

RIN continues its little bout of strength on the NYSE today - ADR's$49.49, up 54 cents.

 

[Sean K]

Talk of a French construction company eyeing off RIN has added a floor to it's sp by the look of it. Bargain hunting time perhaps??

Macquarie Funds Management senior adviser Sean Conlan noted a week or so ago,

"Rinker has in the past been an acquirer, but at these levels Lafarge may be a likely bidder for Rinker," Mr Conlan said. "The Rinker share price has been sold off over 30 per cent in the last few weeks, but it has been way overdone and bargain hunters are coming into the market in anticipation of a possible takeover."

(I don't hold)

 

[Fab]

WOW. Lafarge is a great French group with a lot of cash and expertise in this sector sounds like this got the potential of putting a rocket under the sp of RIN if this rumour is true

 

[pacer]

Tradding rule#27..........buy on rumor, sell on fact....keep the rumour mill going.......give us a site to go to.