TGA - Thorn Group

[Nutmeg]

So all of you have just purchased this?
Pioupiou have you held these (Yours ) for long?

What makes you think that?

 

[tech/a]

Perhaps my view of the world is wrong.

Perhaps a little strange.
But I will use Pioupiou's above post as an example
which I do find bemusing---when I have a spare minute.

Stay tuned.

 

[tech/a]

What makes you think that?

$1.48 was just reciently or a few years ago.
Your the few years ago?
If so thats fine. Is that the case?
Anyone earlier than $1.20 which is Pioupiou's average?

 

[Nutmeg]

Perhaps a little strange.
But I will use Pioupiou's above post as an example
which I do find bemusing---when I have a spare minute.

Stay tuned.

Can't wait.

 

[craft]

.

And I think all of those in this dog have missed another---DEMAND!

There isnt any!

Lack of demand for the share is what creates the prices that provide an acceptable return.

Time frame is everything.

Total return since listing.




Not too shabby for a dog.

 

[Pioupiou]

I have been accumulating TGA since 2007, and bought them at prices ranging from $0.55 to $2.03 - average $1.201. I currently have a paper capital gain of of just under $100K. This is boring history, it is on what the future holds that is likely to be more fruitful.

Looking at TGA as a business, on the basis that in time the SP will reflect the underlying business, I ask again, what do you folk think the EPS metrics are going to be for the next few years? This will be easier to answer when you have read the YE 30/03/2012.

Debating different valuation methodologies, and RRRs used, is less important, and fairly sterile if we have no thoughts on medium-term EPS metrics to which we can apply these valuation methodologies. Let us stick to EPS metrics to keep things simple, and assume the payout ratio will be about 50%.

 

[Klogg]

So all of you have just purchased this?
Pioupiou have you held these (Yours ) for long?

Probably should clarify - average of $1.55.

 

[tech/a]

Probably should clarify - average of $1.55.

Before I make a point.
How many of you have held OVER 2 Years

At an average of less than todays price.

 

[craft]

I have been accumulating TGA since 2007, and bought them at prices ranging from $0.55 to $2.03 - average $1.201. I currently have a paper capital gain of of just under $100K. This is boring history, it is on what the future holds that is likely to be more fruitful.

Looking at TGA as a business, on the basis that in time the SP will reflect the underlying business, I ask again, what do you folk think the EPS metrics are going to be for the next few years? This will be easier to answer when you have read the YE 30/03/2012.

Debating different valuation methodologies, and RRRs used, is less important, and fairly sterile if we have no thoughts on medium-term EPS metrics to which we can apply these valuation methodologies. Let us stick to EPS metrics to keep things simple, and assume the payout ratio will be about 50%.

I think you should be looking at profitability! It has and is forecast to continue decreasing.

 

[Nutmeg]

I think you should be looking at profitability! It has and is forecast to continue decreasing.

I agree. I'd like to see TGA's ROE rise. ROE at over 20% is good. You won't get that kind of return on your funds in a bank account. But if TGA is getting less bang for its buck than it has formerly, I'll want to know why. As for Macquarie's forecast of declining ROE, I query some of the assumptions on which it is based. However, it's a metric to watch closely.

 

[Klogg]

Before I make a point.
How many of you have held OVER 2 Years

At an average of less than todays price.

None.

 

[tech/a]

None.

Pioupiou is one.

 

[oldblue]

Just for the record, there's quite a few shares available at $1.39 today.

I'm still waiting for the trend to reverse.

 

[skc]

Pioupiou is one.

Aren't you tired of this mostly pointless exercise?

Even if TGA was to go bankrupt tomorrow you would have proved nothing. You can't prove TA warned about it, you can't prove FA is inferior. The only thing you'd proved is that these FA guys got their analysis wrong... the consequence of which is the same as getting TA wrong.

You can make a case about position size, averaging down, risk management etc. But you would never end the debate of FA vs TA.

Never...

 

[oldblue]

It shouldn't be an either/or debate. Surely the two are complementary?

 

[tech/a]

On the matter of investing between $500,000 and $600,000 in a rental property versus TGA, I presume the former will make about 5% return a year, and then there is the hoped-for capital appreciation. If you bought TGA shares at $1.40, and got 10 cents fully franked dividend, the dividend and the franking credit would be worth 14.3 cents, a return of 10.2%. In my case my 470,000 TGAs cost me $564,392, and I'll presume that the dividends received suffices to ignore the time value of money. My current return on 14.3 cents a share is 11.9%, and I expect my capital appreciation in the next few years will surpass that of a rental property, but it might not. How the value of my TGAs, or the value of a rental property, may wobble for a year or so does not unduly bother me, the $67K of dividend and franking credits allows me to sit through the wobbles. If TGA slips into decline it will be a slow process because of its strong cashflow and near-zero debt, rather than an over-night wipe out. Hence the chances of losing it all are low.

I see this mentality---rational often on these boards
PEN
RED
MAD
to name a few threads.

TGA has twice been to $2.26.
That makes your holding $1,062,200 (470000 shares)---its been there twice.
Your current holding is valued at $655,650
In 12 mths for the sake of $67,000 franked dividends you have
gladly sacrificed $400K.

Yet we get from other posters

Taking $500k of capital and allocating it to the right house on the right street in the right suburb and making the right modifications is no different to putting $500k into a carefully selected stock it is one investment decision. One must allocate capital into the investment with the highest expected value. This is why putting a lot of money into one stock is not “risky” if you have done your homework, however it is very “risky” just like property investment if you have not done your homework.

And Pioupiou is seen as one who has definately done his homework.
Today TGA dropped 1.5c or $7,050.

So

Perhaps my view of the world is wrong.

To let your profit in anything drop 40% when a phone call/mouse click can stop it is in my view NUTS.
No matter HOW you justify it.

I find people who have spent months analysing a holding and are committed as much as many here become---are blinded to the fact that they are wrong!
a $400K loss in 12 mths---your WRONG!

That 400K would buy 287000 more shares today!
or another $41,615 in dividends each and every year!
What on earth are you doing???

 

[tech/a]

Aren't you tired of this mostly pointless exercise

?

I dont see any comparison here?
(In the post above).
Just common sence
which evidently isnt that common.

 

[Nutmeg]

I find people who have spent months analysing a holding and are committed as much as many here become---are blinded to the fact that they are wrong!
a $400K loss in 12 mths---your WRONG!

Have you ever asked yourself why the most successful investor in the world is a value/FA guy and not a price/TA guy?

 

[CanOz]

Have you ever asked yourself why the most successful investor in the world is a value/FA guy and not a price/TA guy?

I see no evidence of anyone trying to emulate Mr.Buffet in this thread mate.

CanOz

 

[McCoy Pauley]

I sold out of TGA slightly more than 12 months ago and I haven't bought back in, though it remains on my watch-list.

I invest on the basis of fundamental analysis, but I also keep an eye on simple trends. I sold TGA because it had fallen about 10% from its peak. In fact, I sold most of my holdings because they had all slipped, save for my core holdings.

I admire Warren Buffett's approach to investing, but I don't kid myself that I can emulate his success. I try to model his approach as far as possible, but to be honest, the Australian market is so concentrated on banks and mining companies, it's difficult to find decent companies in which to invest (IMO).

FWIW, I believe that the "investment quality" of TGA has deteriorated over the last 12 months. The NCML acquisition was a mis-step and I believe, as I wrote yesterday, that TGA needs to manage the changing nature of the market for its services. I noted the reference to furniture in the Macquarie report but I haven't fully investigated it yet.

The annual report due out later this month may be a catalyst for TGA breaking its current downtrend or accelerating it.