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From page one, the fundamentals told the story a long time ago.
ducati916 said:
ducati916 said: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
ducati916 said:From page one, the fundamentals told the story a long time ago.
typehigh said: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
Fab said:WHat will be the benefit of participating in the buy back ?
noirua said:I'm tempted to buy a few more but do not like the Middle East situation.
3 veiws of a secret said: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 said: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 said: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.
swingstar said: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.
That can't be good for RIN?noirua said: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.
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.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.
michael_selway said:Do you think it will drop more in the ST?
thx
MS
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