TIM - Timbercorp Limited

ROE · 6 December 2007

what institution is buying into TIM?
I hope it's not some dodgy private equity deal, where they screw the existing share holders and they have a nice discount share price

Rainmaker2000 · 6 December 2007

Not doubt the usual bull dust about 'sophisticated investors' and institutionals buying the stock..........of course they are sophisticated, they got their stock to sell on market the other day while us slobs can buy in a few weeks at 1.52 when the market hits $1.40............

I'm doing some more analysis and I'm pretty sure this is the low point for the business, many reasons for this, thank god...........so I may load up some more as the upside is potentially very, very significant in my view............please don't take this as investment advice as I'm the guy who got in at $2 initially

Jackob · 14 December 2007

The $10m SSP at $1.525/s will close on 24/12/2007.

But the price at this minute is be tween $1.515 - $1.520/s (3:12pm) - under water!

Rainmaker2000 · 14 December 2007

It makes me giggle how much this stock is screwing me at moment..for example, I had a sell at 1.64 which went unfilled just....I was selling the amount I would have bought in rights issue (spp)......alas, those 'sophisticated' investors have been heading for the door driving the price down from its $1.70 peak to now be taking losses so my rights is now worth nothing whereas I almost liquidated for $400ish......and to cap it off, my dividend reinvestment has just come in below the current stock price......it really sucks when management shows disregard to its own shareholders

brettc4 · 8 January 2008

TIM is currently at $1.325 which is a P/E of 6.1.
It hasn't been this low since Sep 04.
According to Analysis on COMSEC, EPS will drop a little over the next couple of years, before stabelizing.

Book Value is $1.64.

This to me means the price is undevalued and becoming more undervalued as time goes on.
That also means to me that they are a potential takeover target.
UBS and PM Capital have each bought 5% plus in the last couple of months.

The drought will be affecting them but I think they should have a bounce in the not to distant future unless bad news is released.
I will be watching this one closely and may look at picking up a smallish parcel.

My Guess this will continue to drop to between $1 and $1.20 before raising towards $2.

Can anyone add and further FA or TA Analysis to this?

Trader Paul · 8 January 2008

Hi folks,

TIM ... historically, we have seen short rallies, around 15 January each year
and given the extreme sell-off this year, it would not be surprising to see
a bounce off the lows ... technically, a bounce off 1.02 or thereabouts
would be a good sign for TIM.

Looking ahead, our astroanalysis comes up with some positive cycles,
around 30042008, immediately after lows expected 25-28042008 (???)

For longer term players ... with 5 time cycles in tow, TIM should have some
significant news in May, August and September 2009, particularly around
16092009 ..... that, should be huge for TIM .....

More later .....

have a great day

paul

=====

Rainmaker2000 · 8 January 2008

Mate, there is tonnes of value to be had in this sucker.........the market can be so shortsighted it is beyond belief.......the obvious attraction is its dividends and assets.............but the more compelling proposition is its annuity stream.....

It is just amazing, it takes five minutes of research for market participants to discover that next year, for example, TIM will make $300 million in annuity revenue, up from about 240 this year......the company is only capitalised at 515 million.....and annuities will keep increasing in years ahead, following the sharp trend of prior sales of product.......

pch · 9 January 2008

Hey Rainmaker2000 (we seem to follow the same stocks), I am inclined to agree with you. The annuity income stream was what was cool in the first place (around 2000 when it was all doldrums). Watching closely now with a view to getting back in during this correction..

Rainmaker2000 · 9 January 2008

hehe, yeah I'm right into this sector....big, big fan of Select Harvests as well......I like Select a bit more as its a business more in my field of understanding........I've been hammered so far with my TIM exposure, with the recent share price losses just appalling.........my hope is management does not need to go back to the market for capital as they let the annuities build up and end the Cap ex....they have a bit of debt but should be OK was they can sell many more of the agricultural assets to their TIM property trust............to be honest, even the property trust does not look that bad an investment for something a little more solid

pch · 10 January 2008

Although I don't have time to examine it the way I have done for GTP, operational cashflow is still appalling and they have debt due to refinance in 08. There's your risk premium right there..

Rainmaker2000 · 12 January 2008

Apparently there is some refinance risk but surely its not significant with this companies assets......its not much in shareholders interest if TIMs forced to sell non-core assets like SHV shareholding...farming assets are not exactly flavour of the month.......the key I guess is how quickly they can turn around the cap ex spend and channel free cash

sheggie · 29 January 2008

So, the Chairman sold $1.3 million worth on 16 January. Hmm. I'm not a trader but I bought in April last year following the advice of my investment newsletter. Very disappointing.

Judd · 29 January 2008

Rainmaker2000 said:
Apparently there is some refinance risk but surely its not significant with this companies assets

Ever heard of debt to equity ratio? It may be worthwhile doing some sums on that aspect. A quick look and it seems to me that it exceeds 100% by a large margin but then I could have keyed in the wrong numbers. Then again maybe not.

3MT · 29 January 2008

sheggie said:
So, the Chairman sold $1.3 million worth on 16 January. Hmm. I'm not a trader but I bought in April last year following the advice of my investment newsletter. Very disappointing.

I wouldn't worry about it too much. It's most likely in response to a margin call. it did close at 80c the day before, i'm sure that would have triggered some early morning phone calls.

Rainmaker2000 · 29 January 2008

Can't say I've ever heard of debt/equity ratio...I thought this company with a capitalisation of less than $400 million had a clean 1.6 billion in assets on the balance sheet...who was to know there's over $800 million worth of debt......Who would think that as a share price halves, off balance sheet shareholder equity would halve whilst debt would remain constant.

Just on insider trades, Hance recently bought 2 million shares so there is some insider buying......also, I saw many directors reinvested dividends in the DRP.....not saying this can't be another Rodney Adler though....hehehe...its time for management to earn their cash

Jackob · 30 January 2008

Judd said:
Ever heard of debt to equity ratio? It may be worthwhile doing some sums on that aspect. A quick look and it seems to me that it exceeds 100% by a large margin but then I could have keyed in the wrong numbers. Then again maybe not.

TIM's debt/equit ritio = 171.3% , according to ComSec. It's increasing rapidly in recent years.

Its e/s dropped from 27c/s to 21.7c/s last year and I had an impression a big part of it was from land value appreciation.

sheggie · 30 January 2008

Judd said:
Ever heard of debt to equity ratio? It may be worthwhile doing some sums on that aspect. A quick look and it seems to me that it exceeds 100% by a large margin but then I could have keyed in the wrong numbers. Then again maybe not.

No, I think you're right. The debt/equity ratio is 171%. Market average is 35%. I think Timbeercorp's problem is related to the horticultural projects which have been challenged for their tax avoidance status.

Jackob · 30 January 2008

sheggie said:
No, I think you're right. The debt/equity ratio is 171%. Market average is 35%. I think Timbeercorp's problem is related to the horticultural projects which have been challenged for their tax avoidance status.

Sheggie,

Yeah, it's a big headache for TIM that their horticultural projects have been challenged by the Government. However I think the more serious problem is that all those schemes never make enough money to sercice the debt and pay dividend.

So in a long run TIM's (like GTP) profit has to drop and debt to rocket. These trends have been accelerated to almost an unbearable point in recent years. This was why we would all see the share price slumping from $4+ a year ago to $1+ now. I reckon more down side risk for this stock (and GTP alike).

Junior · 30 January 2008

Jackob said:
Sheggie,

Yeah, it's a big headache for TIM that their horticultural projects have been challenged by the Government. However I think the more serious problem is that all those schemes never make enough money to sercice the debt and pay dividend.

So in a long run TIM's (like GTP) profit has to drop and debt to rocket. These trends have been accelerated to almost an unbearable point in recent years. This was why we would all see the share price slumping from $4+ a year ago to $1+ now. I reckon more down side risk for this stock (and GTP alike).

Not sure that's accurate. The majority of their horticultural projects are still in their early stages and aren't generating income yet. They achieved record new project sales in 2006. Most of these sales were Almond and Olive plantations, these crops haven't even had their first harvest yet.

Rainmaker2000 · 30 January 2008

There is no debate over debt equity......clearly the company has high gearing and that's not optimal.....the suggestion on the thread though is that's the whole story when it is not.......

The debt has been used to buy 'assets' to the extent that the company has $520 net assets and now only trades at $400 market cap.......that is thus way below net tangible asset value....

So clearly some assets can be sold off to satisfy debt and the big question will be whether the assets are worth less or more than book value....

Just on harvesting the crops.........the crops are somewhat advanced as they are not plantations mainly.......just for balance, TIM's annuity stream will increase from $240 to 300 next year and increase every year into the future (for 20 years or so)....

TIM - Timbercorp Limited

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