Rinker a Value Analysis

[Realist]

Then DT is being entirely fair, he is just using Duc's valuation method.

Hahahaaa, I think even DT will offer about 3 times Duc's recommended buying price.

 

[Realist]

As usual your analysis lacks any clarity and logical thought;
FORD....is not the car manufacturer which is ticker F

Fair enough, I did not even look that one up, I had to be quick.

As previously detailed, but obviously ignored;
GAAP profits need not be profits,
GAAP losses, need not be losses.

A loss is a loss to me.

P/E is the lazy-man's, or novice way of approaching a valuation.

It is Ben Graham's way, NTA and PE are his babies. I live by them and so did he!!

 

[ducati916]

Realist

There is no one else on this planet that thinks $2.65 is a fair price. You're own your own there.

Your inaccuracy is quite illuminating.
I did not state that $2.65 was a fair valuation
I stated that $2.65 represented circa a 50% undervaluation from fair value

It is this sort of slipshod attention to detail that identifies you as a layperson, certainly within a valuation context.

jog on
d998

 

[brisvegas]

Then how come you can not quickly and accurately value a company then?

you got to be joking right . is it really that easy ? as someone once said a little bit of information is a dangerous thing . please enlighten me with your methodology for quickly and easily valueing a company and we will see if we can break it down for you . ive got a spare few minutes . waiting patiently


................... bris

 

[Realist]

You've read Graham's books but you buy shares with high PE's and that do not pay dividends?




You'd be better off buying RIN for $13 IMHO.

 

[noirua]

A letter has been sent to shareholders, dated 17 August 2006, by Mr John Morschel, Chairman of Rinker Group, Headed:

Dear Shareholder

BEWARE OF OFFERS TO PURCHASE YOUR RINKER SHARES - THEY MAY UNDERVALUE YOUR INVESTMENT

I am writing to inform and warn you about Below-value Share Offers that may aim to entice you to sell your Rinker shares below their true market value. You may receive an offer like this shortly.

At the Annual General Meeting last month I mentioned that a law firm, acting on behalf of a company called " Direct Share Purchasing Corporation Pty Ltd " ( DSPC ) wrote to Rinker requesting a copy of our share register.

Unfortunately, under the Corporations Act, they are entitled to do this.

We understand that this company is associated with Mr David Tweed. You may know him; he is mentioned frequently in the media, in regard to heavily-discounted share purchase offers being made to shareholders of listed companies.

The offers take various forms. They may simply offer a price that is under the prevailing market price. Or they may offer you an amount above the prevailing price - but paid in instalments over a very lenghty period, perhaps 20 years. This substantially reduces the real value of the offer ( perhaps to around half the face value of the sum offered ) and may result in unforeseen taxation consequences for you. Furthermore, future payments may not be secured.

You may receive such an offer shortly. If you do, please check it carefully. It concerns me greatly that shareholders may unknowingly accept an offer for their Rinker shares that substantially undervalues their holding.

We are certainly not recommending that you sell your Rinker shares. However, if you do want to sell your shares for some reason, we suggest that you contact your broker. If you do not have a regular broker, information on how to get in touch with one is available from the Australian Stock Exchange's Customer Service Centre, telephone 131 279.

Thank you for being a shareholder in Rinker.

Yours sincerely - John Morschel, Chairman

************ WARNING: Please note this warning from Rinker's Chairman SERIOUSLY.

 

[ducati916]

Realist

A loss is a loss to me.

Of course it is.
You do not read financial statements, and you may very well lack the ability to read one, even if you weren't so lazy.

It is Ben Graham's way, NTA and PE are his babies. I live by them and so did he!!

Further evidence of your laziness.
Graham certainly did not live by the two ratios highlighted.
That you do, I do not doubt at all.

jog on
d998

 

[Realist]

you got to be joking right . is it really that easy ? as someone once said a little bit of information is a dangerous thing . please enlighten me with your methodology for quickly and easily valueing a company and we will see if we can break it down for you . ive got a spare few minutes . waiting patiently

Value = earnings multiplier * (expected dividend + 1/3 expected earnings) + adjustment for asset values

 

[ducati916]

Realist

You've read Graham's books but you buy shares with high PE's and that do not pay dividends?

Simply because I also invest in;
Bankruptcies
Turnarounds
Spinoffs
Special situations
Arbitrages
Undervaluations

jog on
d998

 

[brisvegas]

Value = earnings multiplier * (expected dividend + 1/3 expected earnings) + adjustment for asset values

ok just to clarify couple points so i can approach this with as little to and fro as possible . where are we sourcing these expected dividends from along with the forecast earnings ? what makes you trust the source of predictions ? how forward do we look at these projections ? what about risk , debt , tgt market with currency fluct taken into acc. ( not solid on RIN fundies atm but i believe lot of rev from OS ) . i see you are anti housing on other threads and happy to be a renter yet you paradoxically are bullish on a company that relies on this industry . any particular reason for the seemingly contradictory opinions ? i will get into some RIN fundementals when my broker site is back online and we can debate the pros and cons


.......... bris

 

[noirua]

I would like to ask WHY seriously negative posts are being made against Rinker Group and whether any posters have a connection with "Mr David Tweed" or "Direct Share Purchasing Corporation Pty Ltd. ( DSPC )" ?? ( see post 13 ).

 

[ducati916]

Realist

Value = earnings multiplier * (expected dividend + 1/3 expected earnings) + adjustment for asset values

This explains why you have difficulty with the concept of an undervaluation

This is Grahams formula utilized for dividend paying stocks, which tend, due to the dividend, if believed to be sustainable [viz. not open to any chance of reduction] to place a floor under the shareprice.

However, in this formula Graham is identifying Wall St's valuation technique of selecting a capitalization rate that reflects future or expected earnings

Graham himself did not value common stocks in this manner.
He also recommends it for Industrials & Rails, not Miners, Utilities etc.
You have read the words, but missed their meaning.

jog on
d998

 

[brisvegas]

dividends for last few years pretty slim really with last one including 50c capital return . without access to my data i cant be sure but i would say probability is that the div cannot be maintained at that rate . if it can could you please correct me with a point in direction to find this info . i will scroll through a few announcements etc

Ex Date Amount Franking% Books Closed Payable
05-Jun-2006 0.64 22% 09-Jun-2006 04-Jul-2006
21-Nov-2005 0.14 60% 25-Nov-2005 12-Dec-2005
06-Jun-2005 0.14 60% 10-Jun-2005 01-Jul-2005
22-Nov-2004 0.07 100% 26-Nov-2004 13-Dec-2004
07-Jun-2004 0.08 100% 11-Jun-2004 02-Jul-2004
24-Nov-2003 0.06 100% 28-Nov-2003 15-Dec-2003
30-May-2003 0.07 70% 05-Jun-2003 03-Jul-2003


................ bris

 

[Realist]

You are right Ducati, but that does not mean that the formula mentioned is wrong.

I value a stock based on past 5 years earnings.

They need to be consistent - no losses, they need to show growth, and there needs to be consistent and growing dividends.

As a quick calculation is to add up the past 5 years earnings and multiply that by 4 to get the approximate Market Cap.

 

[noirua]

...and then read this: http://www.stockhouse.com/news/news.asp?newsid=3806871&tick=RIN

If anyone is feeling seriously negative about Rinker, then read the link above once more.

 

[ducati916]

Realist

You are right Ducati, but that does not mean that the formula mentioned is wrong.

No the formula is correct, after all it was written by Graham.
It is your interpretation and utilization of the formula that is questionable.
You clearly do not understand when it is applicable, and when it is not.

I value a stock based on past 5 years earnings.

I have seen precious little evidence of any analytical ability, or even the inclination to apply thought to the problem at hand. In short you are looking for an easy ride, and assuming that purely superficial reading of Graham is sufficient.

They need to be consistent - no losses, they need to show growth, and there needs to be consistent and growing dividends.

Without understanding the quirks of GAAP and applying them, you do not understand what you are looking at. In short, you can look at NPAT that are positive, but in reality, the business is losing money.

As a quick calculation is to add up the past 5 years earnings and multiply that by 4 to get the approximate Market Cap.

Yes, so what?

jog on
d998

 

[Realist]

Ducati, you seem to be speaking to me as if you know what you are doing and I don't.

Yet your valuations are the most ridiculous and incorrect litanies of waffle and mistakes I have ever set eyes on.

To suggest BHP have a PER of 2, and that Rinker would need to drop to $2.65 before anyone buy it is quite simply lunacy.

There is not one ASX stock that you can recommend anyone buy, so why on earth 'value' any of them.

David Tweed offers more value to investors than you do.

 

[brisvegas]

As a quick calculation is to add up the past 5 years earnings and multiply that by 4 to get the approximate Market Cap.

Do you drive around looking behind you all the time ? where we have been matters but where we are going is much more important



................... bris

 

[noirua]

Sometimes analysis goes out of the window when a predator is in the wings. Lafarge is the name at these prices: http://www.aggregateresearch.com/finance/article.asp?id=9234

Perhaps, just perhaps, someone sees an opportunity here, me thinks.

 

[Realist]

Do you drive around looking behind you all the time ? where we have been matters but where we are going is much more important

Unfortunately I don't have a crystal ball that works.

Obviously you do, what is a stock that's gonna boom next year and I should buy?