TOL - Toll Holdings

[MRC & Co]

Looks to me like it found resistance at around 50% of the gap, not an unusual occurance.

Forming a flag formation now, which is bullish. However, that being said, it is falling on higher volume (closing near the bottom today), whereas volume should be decreasing.

You would want this one to turn around ASAP, or it looks very bleak for TOL.

Decent support around 7.50. I will be keeping an eye on this one.

 

[Muschu]

Looks to me like it found resistance at around 50% of the gap, not an unusual occurance.

Forming a flag formation now, which is bullish. However, that being said, it is falling on higher volume (closing near the bottom today), whereas volume should be decreasing.

You would want this one to turn around ASAP, or it looks very bleak for TOL.

Decent support around 7.50. I will be keeping an eye on this one.

Sorry MRC but I am not familar enough with charts to know what a flag formation is. If this is a bullish signal is it an indication that the SP may rise? Or in fact do you mean the opposite -- that despite bullish signals the chart looks "bleak" and possibly on its way to $7.50 again?
Where is the point that is 50% of the gap? Do you mean 50% of the gap between $7.50 and $8.50?
Too much to learn...
Regards
Rick

 

[MRC & Co]

Hi Ricky,

RE: Flag formations

http://www.incrediblecharts.com/technical/flags_and_pennants.php

50% of the gap from 9.35 to 8.50 (generally gaps are filled, however, if not, 50% of the gap being filled is the second most probable scenario). Not, to the cent, but relatively close.

This flag formation, as the flag tilts down following the upward flagpole (however, some argue the tilt of the flag does not matter), is bullish.

However, this flag is becoming too large now, following such a short flag pole. The point of the flag is simply a breather from a previous run and this appears an ultra long breather, considering the run up (flag pole) was not that great.

Further, volume generally decreases as the flag grows, signalling a lack of sellers left before the next run continues. This happened at first, but has since begun increasing again.

For the reasons above, you would want this pattern to break to the upside quickly (you would want to see it breakout of it's current trend channel and on high volume), or it could well test 7.50 again.

Of course, none of this is at all set in stone, just a T/A perspective, which is wrong numerous times, only provides something to trade and a place to buy, decide your position size and set exits.

Another thing to note, is it has hit the 50% fib level of it's previous run today. That is, half way between 7.49 and 8.69. Again, fib levels are something I am not completely comfortable with yet and still testing (not sure their relevance, considering there are numerous of them and price generally bounces, resists somewhere around them)......

Of course, this could also be a wave 2 if you are EW inclinded (something I am yet to beleive in).

Just a few thoughts.

Cheers

 

[tigerboi]

I dont hold any toll but the $8.50 price i believe is a bargain when you consider the cash now ready to take over more transport companies,if you go back to before the patricks takeover toll was around $14.00.

I get the feeling little will scoop up a few little fish now but hes got bigger fish to fry in the next 18 months.i think there is still at least 25% run still to come..up to $10.50-$10.75 by xmas...tb

In my opinion, anything sub $8.50 is an absolute bargain for TOL. I bought last week at $8.00 and sold at $8.60, back again today at $8.30.

For me the charts are a good tool but they dont tell you things like how toll is cashed up & circling for more take overs,the courier buy out is earnings positive in the first year,they are the expected buy outs until virgin is offloaded then together with the cash from the nz sale...kapow...linfox the jewel in the crown

Today toll is around $8.25..gee thats a real good price & theres talk of seeing $7.50 again??i dont think you will see sub $8.00 but if you do i would be jumping all over it...i see it says aegis has a 12 month target of $11.38,i said $10.50-$10.75 by xmas..i reckon my experience in this industry will get me about spot on..

$8.25 & cashed up again..very tempting to offload a few of my own to get in at $8.00-$8.50,reckon the retrace from $8.50 is a few profit takers that may have spooked a few..$8.28 atm..still say $10.75 by xmas...tb

 

[MRC & Co]

That is all well and good TB, but how do you judge the intrinsic value of TOL?

Any company can be cashed up and making takeovers, however, does this determine SP? Not at all.

You have to put it into context of all the F/A information.

Like I heard a guy saying how is a company falling when it is earning billions? Failed to even look at shares on issue. Just a very simple example. But you definately need to put all this information, its risk, future earnings projects, along with its current book and ROE into context of an equation if you are going to decide values in F/A! You can also look at management, branding etc, but this is very hard to measure and is usually reflected in projections/risk.

Cheers

 

[tigerboi]

Thats true as well & my value is greater than $8.00 based on my actual experience in that particular industry...for paul little cash means buying up more companies re:scooped up 2 before the ink was dry on the nz deal...

Toll is $8.00 plus & will buy linfox for about $1.1m once the virgin stake is offloaded thats were im coming from...longer term.. not buying at $8.00 & selling at $8.60...chicken feed..im talking about value of an $8.00-$8.50 company & what it will be when they buy linfox??$14-$16??

think about toll from a longer term..

linfox:

revenue:$2.2b(approx)...toll:$9b

staff:16,000...toll:35,000

fleet:5,000...toll:10,000..approx

sites:260...toll:650

airports:2

armored vehicles:500..toll:none

wharehouse space:1.8m square metres..toll:3m sq

countries:11...toll:44

Linfox has some assets that paul little wants:

avalon airport,armoured guard,the woolworths contracts back,the parkes intermodal facility...

the rail hub for australia where you can double stack containers...having said that if he can get linfox for around $1.1 to $1.2b he will have done real good as the asking price was believed to be $980m before the recent buy outs of westgate,provinical,plus the new woolies contracts would see any offer around the $1.2b...

tolls value to me at $8.00-$8.50 is very good value,if it saw $7.50 again i wouldnt panic..just buy more...longer term with more takeovers to come in the next 18 months...great value...tb

 

[roland]

A bit of a drop off this afternoon in SP. Thought I would throw an order in amongst the 103 thousand sitting there at $8.00.

 

[nick2fish]

tolls value to me at $8.00-$8.50 is very good value,if it saw $7.50 again i wouldnt panic..just buy more...longer term with more takeovers to come in the next 18 months...great value...tb

Totally agree tigerboi, but my fundamental analysis is not as detailed as yours on the lin-fox thing (thanks). My thinking is that the market is undervaluing the Asian expansion potential. Cheers for that.

 

[tigerboi]

A bit of a drop off this afternoon in SP. Thought I would throw an order in amongst the 103 thousand sitting there at $8.00.

yep you did the right thing there mate,$8.00 atm seems like a very good price.i believe toll will sell the virgin stake back to branson & use that money to buy linfox...

The latest toll-virgin news...tol has 659,083,770 vba shares..worth $524m

ASX RELEASE
UPDATE ON VIRGIN BLUE INVESTMENT AND 2008 OUTLOOK
As previously advised to the market, the Virgin Blue Board of Directors had appointed
Goldman Sachs JBWere to advise on options to unlock shareholder value. The review
included transactions which could substantially reduce the level of Toll’s investment in
the company.
Given the current adverse market conditions the Virgin Blue Board has concluded that
expressions of interest in the company do not reflect the underlying value of the
business, Toll agrees with this conclusion.
Toll Holdings Managing Director, Mr Paul Little said, “whilst our clear strategy is to
reduce our investment in Virgin Blue in order to focus on our core logistics operations,
the timing and value for our shareholders is paramount, and disposal in the current
markets would not be in the interests of Toll shareholders”.
Toll proposes working with Virgin Blue management to continue to enhance the value of
the business and to unlock Toll shareholder value.
Virgin Blue has today also advised the market that trading conditions have deteriorated
significantly in the second half of the financial year, with the company now based on
current conditions, forecasting profit after tax not to exceed $140 million for the year
excluding development costs on new initiatives of $40 million, compared to the prior year
result of $216 million.
The reduction in Virgin Blue forecast earnings will have a direct impact on the Toll Group
reported earnings as a result of Toll consolidating its 62.8% interest.
In relation to the current trading and outlook for Toll’s core Transport and Logistics
business, Mr Little said “current trading is strong and in line with our plans, with both
earnings and cashflows performing well”.
“The diversification of our revenue base, strong cost control and solid organic growth
rates across our business, will continue to protect the company from any marked
economic downturn in the Asia-Pacific region. In particular we are very pleased with the
rate of progress in integrating the recently acquired BALtrans business” said Mr Little.
With the growth experienced across the region and strength of its balance sheet, Toll is
excellently positioned to take advantage of further growth opportunities in the industry.
The timing of reducing the Virgin Blue investment will not impact the company’s ability to​

pursue and execute further value adding opportunities.

it was worth..$1.6b...lost $1.1b...could have bought linfox had it been sold last year..as i said toll got way above their heads with the patricks deal...

virgin should have been sold as a part of the deal,now look at virgin with fuel closer to $2 than $1...virgin is sub 90c..reckon they look way cheap considering toll wont get $2.50 a share...branson looks likely to get the 62% stake back very cheaply...toll originally offered the 62% at $1.40 to branson,then reneged as it went to $2.50 now its 0.795c a share...that $1.40 for virgin looks good now...

See the dumb play was virgin..net profit this year expected..$140m
last year...$216m

linfox net profit will be approx..$200-$220

tol.$8.15

8.150-0.060
-0.731%318436527678.2508.3708.2108.150


vba.$0.795...


0.795-0.005
-0.625%8415611030.8000.8000.8000.790

 

[MRC & Co]

TB, it's good to see you really breaking down the company, however again, it does not put it into context of the overall F/A value.

What is your forecast for this as far as EPS over the forward years IF these takeovers and divestments take place (a target)? Is the sale of Virgin and aquisition of Linfox a given or just heresay?

I can say ABS took over numerous centres, rapid expansion, creating synergies and filling a void in a growing demographic, does not mean a thing when you put it into context.

Hence, why I do not see it remotely possible to value a company without running an intrinsic value equation, putting in the factors and coming out with a specific valuation range.

Looking very quickly at the balance sheet, profit expectation of a few hundred million? Not large in comparison to equity of over 3 billion and a book of just over 5? Huge available cash, but also quiet some debt. As at end of financial year 2007. Have not looked at it's latest report, but cannot imagine too much has changed........

Just by looking at those figures, I would say overvalued. However, once again, a company which is liked, can trade much higher than fair valuation, even above twice as high, though not for a sustained period of time.

Just a few alternative thoughts on the F/A side of things. Must say, a dynamic company and hard to value.

 

[Muschu]

"ASX RELEASE
UPDATE ON VIRGIN BLUE INVESTMENT AND 2008 OUTLOOK"

What was the date of this release please?

thanks

 

[Muschu]

Hmmm.. TOL is certainly taking a beating today. As I type AIO is down 2.7%
and TOL 4.8%. Now not far above its 12 month low. Shame.

 

[tigerboi]

Re:TOLL POTENTIAL GROWTH IN ASIA..MASSIVE!

Today toll is around $8.25..gee thats a real good price & theres talk of seeing $7.50 again??i dont think you will see sub $8.00 but if you do i would be jumping all over it...i see it says aegis has a 12 month target of $11.38,i said $10.50-$10.75 by xmas..i reckon my experience in this industry will get me about spot on..

A low today of $7.56...great value..closed at $7.64..

think about toll from a longer term..

linfox:

revenue:$2.2b(approx)...toll:$9b

tolls value to me at $8.00-$8.50 is very good value,if it saw $7.50 again i wouldnt panic..just buy more...longer term with more takeovers to come in the next 18 months...great value...tb

Totally agree tigerboi, but my fundamental analysis is not as detailed as yours on the lin-fox thing (thanks). My thinking is that the market is undervaluing the Asian expansion potential. Cheers for that.

yep you did the right thing there mate,$8.00 atm seems like a very good price.i believe toll will sell the virgin stake back to branson & use that money to buy linfox...

it was worth..$1.6b...lost $1.1b...could have bought linfox had it been sold last year..as i said toll got way above their heads with the patricks deal...

virgin should have been sold as a part of the deal,now look at virgin with fuel closer to $2 than $1...virgin is sub 90c..reckon they look way cheap considering toll wont get $2.50 a share...branson looks likely to get the 62% stake back very cheaply...toll originally offered the 62% at $1.40 to branson,then reneged as it went to $2.50 now its 0.795c a share...that $1.40 for virgin looks good now...

See the dumb play was virgin..net profit this year expected..$140m
last year...$216m

Firstly MRC &CO best not compare ABS with TOLL.....very different management in every aspect of the companies.paul little took the basket case of the transport industry..IPEC & made it profitable for the first time in many many years.if its eps you want then YT is the man to go to.(1/2 year..37c)if you get full year at 75c,thats 10% at around todays $7.50..

Onto linfox,toll will buy linfox & its only a matter of when paul little gets the cash to do so,as for linfox only making a few hundred million a year & lets say at the $1.2b going price,on paper it will be 5 years before TOL make money?

However Paul little will make linfox & its assets much more profitable than the present private management,there are some very good assets such as the airports that paul little will make very good money spinners.

You will find despite the future virgin sell off,the private airports will see a huge increase in TOLLS air freight business...

Tolls asia business is a sleeping giant when you consider their 1/2 yearly revenue was only $376m,linfox yearly reveune is about $2.2b...also they have a presence in asia that would give toll the growth in asia it needs.

When you think about it,$376m for the half in asia leaves a massive hole there for revenue growth.as nickfish said:they are undervalued in asia & the revenue shows that,had virgin been sold on the patricks deal then linfox bought you would now have a much larger asian footprint with the prospect of huge growth..tb


re:this anns was last july..



Airfreight fleet for Toll

Unveiled at Brisbane airport, Toll Holdings’ new dedicated air fleet includes three Boeing 737-300F and two ATR42 aircraft.The company says the new planes, together with its 50 charter aircraft, would provide a key platform for freighter services.
A significant milestone for Toll, the agreement brings together the vital core components required to provide a seamless efficient air-freight network.

According to CEO Paul Little, Toll now has the capability to provide efficient and competitive air line-haul services to support the growth in the air express market.

“We expect the business to grow strongly," he says.

In addition, Toll and discount carrier Virgin Blue, in which Toll has the majority stake, have agreed to enter into a long-term deal for the provision of freight capacity on the Virgin Blue fleet.

"This agreement enables Toll to secure important belly space capacity and operational management throughout the Virgin Blue network, whilst providing Virgin Blue with a strong revenue stream anticipated to grow rapidly," Little says.

 

[SGB]

Re: TOLL POTENTIAL GROWTH IN ASIA..MASSIVE!

A low today of $7.56...great value..closed at $7.64..

Hi TB,

I don't own the stock nor do I know the fundamentals of TOLL, I actually trade this stock, but I can't help but comment on your $7.56 value price.(and please don't take this as being rude or aggressive, I can only see what I see.)

Firstly, the long term trend is down... dont fight it.
Secondly, it just got belted down through a Major Support area around $ 8.00 and its next Major Support area is around $6.00 where it began its Long Term bull run at the beginning of 2003 and 2006.
If there isn't any positive news or fundamental aspect to get it bullish again it might struggle to get through $ 8.00 again in the short term.
I hope it does go up again for long term investors because as I mentioned I'll trade this stock whichever direction it chooses to go.

Just be careful

SGB

 

[MRC & Co]

SGB, you may wish to point out that next support level of $6.00 is long-term support and a fib retracement (is 100% still a retracement, more like a complete wipeout)!.

There is still some short-term support at $7.50, where accumulation was seen last time it reached the same level.

You should also note that a decent amount of volume came in today and it did not close on it's low.

 

[SGB]

SGB, you may wish to point out that next support level of $6.00 is long-term support and a fib retracement (is 100% still a retracement, more like a complete wipeout)!.

There is still some short-term support at $7.50, where accumulation was seen last time it reached the same level.

You should also note that a decent amount of volume came in today and it did not close on it's low.

Yer, MRC & Co,
point taken, should have mentioned it was a Monthly ( Major ) Chart.

Looking at the Daily Chart though, biggest volumn in 25 days and lost over 5% today. It does need to hold onto 7.50.

SGB

 

[Muschu]

Re: TOLL POTENTIAL GROWTH IN ASIA..MASSIVE!

Firstly, the long term trend is down... dont fight it....
If there isn't any positive news or fundamental aspect to get it bullish again it might struggle to get through $ 8.00 again in the short term...."
SGB

Thanks SGB. I bought this stock on its last downturn and could have made a good profit a short time ago. I checked the chart and was concerned at what I saw - but decided to ignore a nagging tendency to sell -- hoping that fundamentals will come through.
I'm not a short term trader. This seems to be a massive company with quite reasonable debt.
What to do? [Rhetorical question]....

 

[MRC & Co]

Agreed SGB, I am looking for more accumulation to come in at these levels and some consolidation or a pattern. I then, may consider a long if there is a breakout.

If there is a breakdown and some momentum, definately a short is the goer.

Interesting times on the TOL chart.

Such risk at the moment for those long-term investors.

If the market slides back down to the early 5000s once more, I think $6 looks likely for TOL.

 

[SGB]

I am not familar enough with charts to know what a flag formation is. If this is a bullish signal is it an indication that the SP may rise? Too much to learn...
Regards
Rick

Hi Rick,

Here is some more analysis to try to give you more meaning to charts.( Very basic)

Have a look at this chart and try and spot the types of price patterns that are occurring. At this early stage don't try and predict that it might go up, instead look at what is happening now.

If you go back to the Monthly chart I posted you'll see where I have set the Fibonacci Retracement parameters. Also used in this Daily Chart.

The patterns are :

Support 50%
Resistance 38.2%
Support 61.8%
Resistance 50%
Support 78.6%
Expected Resistance 61.8%. Stopped by channel

The channel that has formed confims only a continuation pattern (Price formations that imply a pause or consolidation in the prevaling trend) when the Fib support was met. But this support later turned into resistance. Hence the channel formation.

To validate an impending trend reversal, firstly the price must breakout above the upper trendline channel and hold that support, as this upper trendline, in this moment, is the important one.

There are many other variables, but I would expect there will be extra strong support @ the 6.00 mark( if it happens to arrive there), providing eveyone agrees that the fundamentals are that strong.

SGB

 

[Muschu]

Hi Rick,

Here is some more analysis to try to give you more meaning to charts.( Very basic)

Have a look at this chart and try and spot the types of price patterns that are occurring. At this early stage don't try and predict that it might go up, instead look at what is happening now.....SGB

Thanks SGB. I printed this out and tried to follow it and can see what you mean [I think].
Is it unfair / fair to use a different timeframe or is there a "recommended" period? For example, if you read / analyse the chart from mid-April, or after TOL made their Virgin announcement, then do you get a different analytical outcome? Or is this non-TA think? [I suspect it is].

Good stuff.

Rick