TGA - Thorn Group

[Pioupiou]

Back to the stock at hand, I note that TGA is poised to make a positive start to the week, jumping a little more than 3% compared to a basically flat broader market.

I wonder if it's the start of investors/speculators/call them what you will positioning themselves ahead of the release of the annual report next week (I believe).

I'm starting to refresh myself on the past performance of TGA as we speak.

Not sure if last year helps. Below are SPs for dates before and after the 25/05 announcement. Perpetual seemed to start selling about then.

2.150 1/03/11, 2.160 2/03/11, 2.210 3/03/11, 2.140 4/03/11, 2.030 7/03/11,
1.960 8/03/11, 1.920 9/03/11, 1.900 10/03/11, 1.890 11/03/11, 1.840 14/03/11,
1.850 15/03/11, 1.860 16/03/11, 1.850 17/03/11, 1.940 18/03/11, 1.990 21/03/11,
2.000 22/03/11,1.965 23/03/11, 2.000 24/03/11, 1.995 25/03/11, 2.100 28/03/11,
2.090 29/03/11, 2.110 30/03/11, 2.190 31/03/11, 2.200 1/04/11, 2.260 4/04/11,
2.240 5/04/11, 2.150 6/04/11, 2.200 7/04/11, 2.170 8/04/11, 2.200 11/04/11,
2.140 12/04/11, 2.120 13/04/11, 2.120 14/04/11, 2.110 15/04/11, 2.110 18/04/11,
2.070 19/04/11, 2.120 20/04/11, 2.030 21/04/11, 1.990 27/04/11, 2.000 28/04/11,
2.000 29/04/11, 1.950 2/05/11, 1.910 3/05/11, 2.000 4/05/11, 2.020 5/05/11,
2.110 6/05/11, 2.110 9/05/11, 2.080 10/05/11, 2.100 11/05/11, 2.080 12/05/11,
1.985 13/05/11, 1.980 16/05/11, 1.960 17/05/11, 2.040 18/05/11, 2.000 19/05/11,
1.995 20/05/11, 1.980 23/05/11, 2.080 24/05/11, 2.070 25/05/11, 2.060 26/05/11,
2.080 27/05/11, 2.060 30/05/11, 2.080 31/05/11, 2.120 1/06/11, 2.070 2/06/11,
1.950 3/06/11, 1.935 6/06/11.

 

[oldblue]

What's this, Pioupiou, looks like a bit of technical analysis?



Just kidding! I value your Fundamental analysis of this stock. Wish I was half as thorough!

 

[Pioupiou]

What's this, Pioupiou, looks like a bit of technical analysis?

Just kidding! I value your Fundamental analysis of this stock. Wish I was half as thorough!

Fundamentally, I can make no sense of the SP, so I have been watching for signs in the stars, the flight patterns of bees, the entrails of slaughtered animals, and the like. I saw nothing in the pattern of numbers that I posted yesterday, so for the hell of it, I decide to list Perpetual's trading announcements - see below.

I have no real idea why TGA's SP dropped back from a high of $2.27 in early 2011 to the current SP. There was nothing significant in the 24/05/2011 announcement, other than the NCML matter. If that matter were an unmitigated disaster, it should have at most accounted for a 20 cent retraction. It could be the drop in customer growth to 4% announced for H1. Macquarie has bundled the 4% growth matter and the NCML loss of the ATO business into a 27 cent target price retreat to $1.78 ($2.05 previously).

I am inclined to think negative market sentiment generally, with Perpetual's sell off added, has had a major effect pulling the SP down to its current price. Perpetual seem to have bought and sold up until the end of the 2010/2011 fiscal year. Its holdings maxed about then – see below, which reflects that Perpetual sold about 8 million shares this tax year.

*1 There was a change in the interests of the Substantial holder on 14 /09 /2010
The previous notice was given to the company on 23 /03 /2010
The previous notice was dated 19 /03 /2010
Ordinary 14,770,107 11.41% - - - 13,476,274 10.41%

*2 There was a change in the interests of the Substantial holder on 02 /12 /2010
The previous notice was given to the company on 16 /09 /2010
The previous notice was dated 14 /09 /2010
Ordinary 13,476,274 10.41% - - - 12,040,512 9.30%

*3 There was a change in the interests of the Substantial holder on 24 /01 /2011
The previous notice was given to the company on 06 /12 /2010
The previous notice was dated 02 /12 /2010
Ordinary 12,040,512 9.30% - - - 10,559,652 8.16%

*4 There was a change in the interests of the Substantial holder on 17 /03 /2011
The previous notice was given to the company on 27 /01 /2011
The previous notice was dated 24 /01 /2011
Ordinary 10,599,652 8.16% - - - 11,937,797 9.19%

*5 There was a change in the interests of the Substantial holder on 05 /04 /2011
The previous notice was given to the company on 21 /03 /2011
The previous notice was dated 17 /03 /2011
Ordinary 11,937,797 9.19% - - - 10,570,287 8.14% 05/04/11

*6 There was a change in the interests of the Substantial holder on 11 /05 /2011
The previous notice was given to the company on 07 /04 /2011
The previous notice was dated 05 /04 /2011
Ordinary 10,570,287 8.14% - - - 12,106,871 9.32%

*7 There was a change in the interests of the Substantial holder on 30 /06 /2011
The previous notice was given to the company on 13 /05 /2011
The previous notice was dated 11 /05 /2011
Ordinary 12,106,871 9.32% - - - 10,808,060 8.32%

*8 There was a change in the interests of the Substantial holder on 11 /07 /2011
The previous notice was given to the company on 04 /07 /2011
The previous notice was dated 30 /06 /2011
Ordinary 10,808,060 8.32% - - - 14,093,841 9.65%

*9 There was a change in the interests of the Substantial holder on 13 /02 /2012
The previous notice was given to the company on 13 /07 /2011
The previous notice was dated 11 /07 /2011
Ordinary 14,093,841 9.65% - - - 12,494,566 8.54%

*10 There was a change in the interests of the Substantial holder on 02 /04 /2012
The previous notice was given to the company on 15 /02 /2012
The previous notice was dated 13 /02 /2012
Ordinary 12,494,566 8.54% - - - 10,918,547 7.46%

*11 There was a change in the interests of the Substantial holder on 17 /04 /2012
The previous notice was given to the company on 04 /04 /2012
The previous notice was dated 02 /04 /2012
Ordinary 10,918,547 7.46% - - - 9,126,242 6.23%

*12 There was a change in the interests of the
Substantial holder on 24 /04 /2012
The previous notice was given to the company on 23 /04 /2012
The previous notice was dated 17 /04 /2012
Ordinary 9,126,242 6.23% - - - 7,647,598 5.22%

*13 There was a change in the interests of the Substantial holder on 26 /04/2012
The previous notice was given to the company on 27 /04 /2012
The previous notice was dated 24 /04 /2012

ANNEXURE 2 (of *13)

CHANGES IN RELEVANT INTERESTS
Account Security Volume Value Price AsAtDate RegComp
PMWSCS TGA - 417,716 - 584,802 $ 140.00 26/04/2012 PMWSCS
PMWSCS TGA - 250,629 - 358,500 $ 143.04 26/04/2012 PMWSCS
PMWSCS TGA - 699,937 - 983,761 $ 140.55 26/04/2012 PMWSCS
PIMEDA TGA -- 137,878 - 193,788 $ 140.55 26/04/2012 PIMEDA
PIMEDA TGA - -- 82,284 - 115,198 $ 140.00 26/04/2012 PIMEDA
PIMEDA TGA - -- 49,371 -- 70,620 $ 143.04 26/04/2012 PIMEDA

The above totals 1,637815 so I presume it reduced Perpetual's holding to 7,647,598 less 1,637815 = 6009783 shares, which prorates to about 4.1%. Perpetual does not have to report transactions if its total holding is below 5%, so we do not know what it is now doing.

 

[CanOz]

There is of course one other possibility...one of supply vs demand. If there are more :bananasmi than there are monkeys for :bananasmi, then what do you think is going to happen to the price of :bananasmi??

Not being a smartass, just asking if you have considered the other possibility. No demand = no price premium.

CanOz

 

[Pioupiou]

There is of course one other possibility...one of supply vs demand. If there are more :bananasmi than there are monkeys for :bananasmi, then what do you think is going to happen to the price of :bananasmi??CanOz

Perpetual's heavy selling and the generally negative market sentiment is the reason I put forward to explain TGA's SP retraction. This translates to: "More bananas, less monkeys, price of bananas goes down.", which is a truism. Another truism is that bananas do not keep well, and cannot be used to grow more bananas, whereas TGA shares deliver a good and growing dividend, so now might be the time to load up.

What I would like to know is:

a) How long will there be more sellers than buyers?
b) Should one buy TGA now, sell or hold?

 

[tech/a]

Perpetual's heavy selling and the generally negative market sentiment is the reason I put forward to explain TGA's SP retraction. This translates to: "More bananas, less monkeys, price of bananas goes down.", which is a truism. Another truism is that bananas do not keep well, and cannot be used to grow more bananas, whereas TGA shares deliver a good and growing dividend, so now might be the time to load up.

What I would like to know is:

a) How long will there be more sellers than buyers?
b) Should one buy TGA now, sell or hold?

So funds selling and not buying is of no concern?

 

[Nutmeg]

What I would like to know is:

a) How long will there be more sellers than buyers?

As at 10.40 am today, there are 106 buyers for 614,625 units compared to 58 sellers for 455,131 units.

There's been a preponderance of buyers over sellers all week.

 

[oldblue]

The "declared" buyers and sellers aren't a very good indication of the supply/demand of/for a stock. Often there's a sleeper in the wings waiting until their price is reached - or looks like being reached. Volumes traded and trends are usually better guides to this.

 

[kermit345]

So funds selling and not buying is of no concern?

I'd say funds selling is a concern but not a major one. It's been demonstrated by a number of studies that fund managers struggle to outperform the index's and some have openly admitted themselves that managing funds individually is much easier then managing their funds accounts/portfolios. While this doesn't directly relate to Perpetual's TGA holding, they could be selling for any number of reasons that we are not aware of and that may or may not be directly related to TGA. So hence while it is concerning perpetual are selling, its not what i'd call a major concern.

Personally i'm still waiting for the downtrend to be broken (to the upside) before I add to my small holding.

 

[tech/a]

Personally i'm still waiting for the downtrend to be broken (to the upside) before I add to my small holding

Wise

There's been a preponderance of buyers over sellers all week.

At Market action is all that matters.

 

[Pioupiou]

So funds selling and not buying is of no concern?

I assume that your TA logic is telling you not to buy now at circa $1.45, because you did not venture an opinion. In contrast, I would say buy now. Am I concerned because Perpetual is selling at circa $1.40, and perhaps below? The answer is no. Am I happy with the downward pressure that Perpetual seems to have caused? The answer is mixed – one part of me wants to see my holdings appreciate, and the other wants me to add to my holdings at cheap prices, which I have been doing in recent months.

What is interesting is that at least one other institution, Perennial, is following my path, in a way. That is, Perennial seems to have a price when it sells, and a price when it buys. Our buy and sell points differ, and with the benefit of hindsight I wish mine were closer to those that Perennial seems to have used. Below are transactions that I have been able to glean from ASX announcements.

Perpetual – Final notice when it ceased to be a Substantial Holder.

26/04/12 - Sold on market - $584,802.00 - 417716 - $1.4000
26/04/12 - Sold on market - $358,500.00 - 250629 - $1.4304
26/04/12 - Sold on market - $983,761.00 - 699937 - $1.4055
26/04/12 - Sold on market - $193,788.00 - 137878 - $1.4055
26/04/12 - Sold on market - $115,198.00 - - 82284 - $1.4000
26/04/12 - Sold on market - - $70,620.00 - - 49371 - $1.4304

The above date may, or may not, reflect when the transactions were reported to the ASX, rather than actual date of six separate transactions. Because the previous announcement was dated 24/04/2012, the reality is not significant.

It seems as though Perpetual has been selling since July 2011 at whatever price it can get, within reason. The above notice reduced Perpetual's holding to 6,009,783 shares, which prorates to about 4.1%. Perpetual does not have to report transactions if its total holding is below 5%, so we do not know, and will not know, what it is now doing with the remainder of its TGA holdings.

Perennial Investment Partners (unit of IOOF)

Some transactions below predate the 22/11/2011 dated half year announcement, which did not seem to alter Perennial's buy-sell pattern, which roughly suggests that between 26/10/2011 and 17/04/2012 it would buy below $1.66 and sell at above about $1.69 .

26/10/11 - Purch on mrket - $57,043.15 - 35449 - $1.6092
02/11/11 - Purch on mrket - - $1,716.34 - - 1070 - $1.6041
03/11/11 - Purch on mrket - - $9,017.96 - - 5622 - $1.6040
08/11/11 - Purch on mrket - $20,743.84 - -12606 - $1.6456

22/11/11 - Sold on market - $81,418.91 - - 47936 - $1.6985
07/12/11 - Sold on market -- $8,727.87 - - - 5000 - $1.7456
09/12/11 - Sold on market - $61,772.33 - - 35388 - $1.7456
12/12/11 - Sold on market - $23,832.31 - - 13653 - $1.7456

20/12/11 - Purch on mrket $102,444.33 - - 61622 - $1.6625
23/12/11 - Purch on mrket - $23,715.60 - - 14972 - $1.5840
19/01/12 - Purch on mrket - $16,240.99 - - 10000 - $1.6241
23/01/12 - Purch on mrket - - $3,538.92 - - - 2179 - $1.6241
24/01/12 - Purch on mrket - $97,493.02 - - 60029 - $1.6241
25/01/12 - Purch on mrket - $43,740.79 - - 26994 - $1.6204
30/01/12 - Purch on mrket $286,252.00 -- 177931 - $1.6088

Perennial Investment Partners (unit of IOOF)

28/02/12 - Sold on market - - $2,711.43 - - - 1599 - $1.6957

27/03/12 - Purch on mrket - $256,642.48 - 161226 - $1.5918
05/04/12 - Purch on mrket $102,450.56 - - - 68128 - $1.5038
17/04/12 - Purch on mrket - $88,521.32 - - - 58922 - $1.5023

Investors Mutual

Between 6/12/2011 and 19/12/2011 Investors Mutual's trading in TGA was a net purchase, detailed thus:

Net purchase - - - - - - - - $3,260,599 - 1899700 - $1.7164

This aggregated report is not as useful as an itemised one would have been.

In summary, I would buy at current prices, if I had the funds. I had planned to consider buying 10,000 today, but as soon as typed these words I noticed that it was 3.59PM, so I did not have time to consider the matter. Let's see what happens tomorrow.

 

[tech/a]

And it would not have been a bad buying decision.

There is limited risk to the downside in my view.
Its actually in an accumulation phase right at the moment.
The bar on 26/4/12 is the control bar.
The test on the $1.50 high on low volume is a good sign.

I would like to see a clear break of that $1.50 high with either volume
or a gap up over it.
Stop $1.38---8c risk on tonights close.

Personally my buy order would be above $1.51.
So not ready quite yet.

 

[McLovin]

I'd say funds selling is a concern but not a major one. It's been demonstrated by a number of studies that fund managers struggle to outperform the index's and some have openly admitted themselves that managing funds individually is much easier then managing their funds accounts/portfolios. While this doesn't directly relate to Perpetual's TGA holding, they could be selling for any number of reasons that we are not aware of and that may or may not be directly related to TGA. So hence while it is concerning perpetual are selling, its not what i'd call a major concern.

Personally i'm still waiting for the downtrend to be broken (to the upside) before I add to my small holding.

Way too much is being read into this PPT sell down. They have ~$22b in FUM. Their holding in TGA, at its peak, amounted to less than 0.1% of their FUM. Even if TGA doubled in value it would have added 0.1% to their performance. There is an entire universe of reasons why they might have sold. Either way, I'm pretty sure that more time has been spent discussing the fact that PPT was selling out of TGA in this thread, than PPT spent discussing TGA.

 

[CanOz]

Way too much is being read into this PPT sell down. They have ~$22b in FUM. Their holding in TGA, at its peak, amounted to less than 0.1% of their FUM. Even if TGA doubled in value it would have added 0.1% to their performance. There is an entire universe of reasons why they might have sold. Either way, I'm pretty sure that more time has been spent discussing the fact that PPT was selling out of TGA in this thread, than PPT spent discussing TGA.

Well said.

CanOz

 

[Pioupiou]

Way too much is being read into this PPT sell down. They have ~$22b in FUM. Their holding in TGA, at its peak, amounted to less than 0.1% of their FUM. Even if TGA doubled in value it would have added 0.1% to their performance. There is an entire universe of reasons why they might have sold. Either way, I'm pretty sure that more time has been spent discussing the fact that PPT was selling out of TGA in this thread, than PPT spent discussing TGA.

Your words encapsulate why I wrote that PPT's selling was not a concern. I should have written, ". . . PPT's reasons for selling were not a concern". As much as TGA is percentage-wise a non-entity for PPT, the reverse has not been true, because in July 2011 PPT owned something like 9.65% of TGA PPT's constant selling to reduce this to zero, or a small %, has probably been a significant factor behind the SP retreat, exaggerated by the corollary of TA activity, and likewise for those who think that PPT would not sell unless it "knew" something that we poor mushrooms do not. There are of course other reasons why investors may have became fearful of TGA's ability to keep to its historical trajectory, and the forthcoming interim annual report will go a long way to either confirming, ameliorating or gainsaying these fears. From my past posts on TGA, you can assume that I believe it will transpire to be the last mentioned.

 

[skc]

And it would not have been a bad buying decision.

There is limited risk to the downside in my view.
Its actually in an accumulation phase right at the moment.
The bar on 26/4/12 is the control bar.
The test on the $1.50 high on low volume is a good sign.

I would like to see a clear break of that $1.50 high with either volume
or a gap up over it.
Stop $1.38---8c risk on tonights close.

Personally my buy order would be above $1.51.
So not ready quite yet.

If the market isn't looking so iffy I would have bought around these levels too and just ride into the report next week.

A lot needs to go wrong fundamentally for the current share price to not look cheap.

Given that the market is iffy, however, I will probably buy the day before the result release with a guaranteed stop...

 

[Nutmeg]

And it would not have been a bad buying decision.

There is limited risk to the downside in my view.

I have been saying that for weeks when I started buying at $1.50 and under. You TA guys are by defintion herd animals. Your tune has now changed from canning the stock to weighing up whether it is a good buy - simply because all your fellow herd members are doing the same thing.

 

[CanOz]

I have been saying that for weeks when I started buying at $1.50 and under. You TA guys are by defintion herd animals. Your tune has now changed from canning the stock to weighing up whether it is a good buy - simply because all your fellow herd members are doing the same thing.

Incredible...a technical approach on the market keeps you from being just a :sheep:

He is approaching this as a trade, not buy until i can't stand the pain and sell to buy lower...thats not even a strategy. Most of the decent fundamental investors don't even do that. You guys are the :sheep:, Tech's probably buying off you guys!!

CanOz

 

[Nutmeg]

You guys are the :sheep:

If you're buying when everyone else is buying and because everyone else is buying, what else is that but a herd mentality? You're the reason that bubbles happen.

Tech's probably buying off you guys!!

He's not buying from me.

By the way, nice pictures. Do you have any love hearts?

 

[oldblue]

Just a "technical" point, maybe, but sheep move in flocks, not herds!



Seriously though, some of us do attempt to combine Fundamental Analysis with a little of the Technical variety. It's kept me, for one, from buying anything in the current general market downtrend.