Which Aussie stocks are good for long term investing?

[luutzu]

I didn't read it but my shredder did. It didn't get a lot out of it though, which seemed to be a consistent theme in its reviews.

"
The wise student hears of the Tao and practices it diligently.

The average student hears of the Tao and gives it thought now and again.

The foolish student hears of the Tao and laughs aloud.

If there were no laughter, the Tao would not be what it is."
- Lao Tzu

 

[luutzu]

Mate, you are talking absolute crap. When have APA ever raised or borrowed every 6 months?????
As for overpaying for assets. ROFLMFAO. Why would they need to overpay for assets in today's environment? It's a buyers market fool. BTW that Yin Yang crap doesn't apply in Australia. It's just Chinese mythology or as we say in Australia Bunkem.

I take it you didn't read its many announcements?

 

[Clansman]

"
The wise student hears of the Tao and practices it diligently.

The average student hears of the Tao and gives it thought now and again.

The foolish student hears of the Tao and laughs aloud.

If there were no laughter, the Tao would not be what it is."
- Lao Tzu

The student of the Tao learns to go through ones life doing nothing about anything.
Burn incense and consult the sticks, stay blameless and save face at all costs.

 

[Clansman]

I take it you didn't read its many announcements?

That short statement in itself says everything. You have simply been making your posts up.
One more chance, provide the requested facts or take a hike you bitter little half pint.

 

[luutzu]

Please prove in kind with detailed facts where APA has capital raised or borrowed every 6 months since it was established????

See the Black bar there? That's not good.

Always raising equity. Year on year.





See the blue bar at 96%? That's 96% of APA's equity are contributed equity. i.e. shareholders put in new cash. Shareholders and JV/minority interest holders.

Sun Tzu said, a good general do not load his wagon twice. He forage on the enemy. One picu of the enemy's provision equal 20 of his own.

In Australian English, it means that a good business do not ask for more cash all of the time. Its cash from operations ought to be more than enough for it to pay dividends, operating expenses, investments.




See the blood red? That's bloody bad.




Compare to another capital intensive corporation Buffett bought out - BNSF.



See how contributed equity were made, but dividends and retained earnings accumulates to more than made up for the investment?


And here is why APA always need to raise and borrow... its current assets cannot meet its current liabilities; with the majority of its assets being fixed you-cant-sell-it soon enough assets... hence the need for new funding.

But of course you don't say it's to make ends meet, it's for investment and growth.

 

[luutzu]

The student of the Tao learns to go through ones life doing nothing about anything.
Burn incense and consult the sticks, stay blameless and save face at all costs.

A man of Tao does nothing but leave nothing undone. He stay behind so that he leads.

"
Hence it is said:
The bright path seems dim;
Going forward seems like retreat;
The easy way seems hard;
The highest Virtue seems empty;
Great purity seems sullied;
"

 

[Value Collector]

Please prove in kind with detailed facts where APA has capital raised or borrowed every 6 months since it was established????

He can't because they haven't.

They do hold a lot of debt, just like every other infrastructure company, but he misses the point of that to.

In a company like APA, Just like Berkshire Hathaway energy, longterm bonds and other debt instruments are part of the capital structure, and given the longterm nature of the debt, and the regulated income that is perfectly fine.

APA's returns to share holders are increased by holding some of the capital as debt, because the interest on the debt is less than the earnings on the capital, and bond holders love owning bonds in regulated assets.

and if demand ever did slow down, APA could easily pay down the debt by cutting the dividend for a while, and although share holders didn't get a dividend, our equity would be rising as the company cleared debt.

 

[luutzu]

That short statement in itself says everything. You have simply been making your posts up.
One more chance, provide the requested facts or take a hike you bitter little half pint.

Dude, what's with the name calling? It's "midget" or "little person" thank you very much.

If you're going to be this rude, I'll change my mind and tell you it's a great company you shuld buy more.

 

[Clansman]

Dude, what's with the name calling? It's "midget" or "little person" thank you very much.

If you're going to be this rude, I'll change my mind and tell you it's a great company you shuld buy more.

He can't because they haven't.

They do hold a lot of debt, just like every other infrastructure company, but he misses the point of that to.

In a company like APA, Just like Berkshire Hathaway energy, longterm bonds and other debt instruments are part of the capital structure, and given the longterm nature of the debt, and the regulated income that is perfectly fine.

APA's returns to share holders are increased by holding some of the capital as debt, because the interest on the debt is less than the earnings on the capital, and bond holders love owning bonds in regulated assets.

and if demand ever did slow down, APA could easily pay down the debt by cutting the dividend for a while, and although share holders didn't get a dividend, our equity would be rising as the company cleared debt.

He doesn't get it. It's really like comparing the money one would save in interest by paying out a mortgage against the earnings one can receive in dividends.One cannot make money by saving money. His is a typically Asian 50 cent bet view of everything. Watch the movie "Balls Of Fury" it's summed up in one scene.

 

[Value Collector]

Lu

View attachment 87180

See the Black bar there? That's not good.

Always raising equity. Year on year.



View attachment 87181

See the blue bar at 96%? That's 96% of APA's equity are contributed equity. i.e. shareholders put in new cash. Shareholders and JV/minority interest holders.

Sun Tzu said, a good general do not load his wagon twice. He forage on the enemy. One picu of the enemy's provision equal 20 of his own.

In Australian English, it means that a good business do not ask for more cash all of the time. Its cash from operations ought to be more than enough for it to pay dividends, operating expenses, investments.


View attachment 87182

See the blood red? That's bloody bad.




Compare to another capital intensive corporation Buffett bought out - BNSF.

View attachment 87184

See how contributed equity were made, but dividends and retained earnings accumulates to more than made up for the investment?


And here is why APA always need to raise and borrow... its current assets cannot meet its current liabilities; with the majority of its assets being fixed you-cant-sell-it soon enough assets... hence the need for new funding.

But of course you don't say it's to make ends meet, it's for investment and growth.

View attachment 87185

Can you show me where the alleged $4 billion capital raising shows up in the 2015 annual report, I think your numbers are off, did you put that chart together?

 

[luutzu]

He can't because they haven't.

They do hold a lot of debt, just like every other infrastructure company, but he misses the point of that to.

In a company like APA, Just like Berkshire Hathaway energy, longterm bonds and other debt instruments are part of the capital structure, and given the longterm nature of the debt, and the regulated income that is perfectly fine.

APA's returns to share holders are increased by holding some of the capital as debt, because the interest on the debt is less than the earnings on the capital, and bond holders love owning bonds in regulated assets.

and if demand ever did slow down, APA could easily pay down the debt by cutting the dividend for a while, and although share holders didn't get a dividend, our equity would be rising as the company cleared debt.

Let see...

20/03/2018
9:07 AM

APA Group Successfully Completes Retail Shortfall Bookbuild
2 pages 43.1KB

-- raising $500M

17/03/2017
9:57 AM

Pricing of USD 850 million 10 year Notes
2 pages 71.3KB
-- Borrowed $USD 850M

13/10/2016
3:44 PM

APA issues A$200 million medium term notes
2 pages 44.9KB
-- Borrowed $A200M

16/03/2015
9:26 AM

APA Group Euro and Sterling MTN Issuance
2 pages 165.3KB
-- $EUR 1.350B and GBP600M notes



OK. Maybe not every 6 months. Just every march

 

[luutzu]

Lu


Can you show me where the alleged $4 billion capital raising shows up in the 2015 annual report, I think your numbers are off, did you put that chart together?

It's cumulative. I know, not the best way to chart it but that's version 1. In v2 I label it as cumulative so it's a lot clearer

 

[IrishDigger]

I leave it to the LIC experts, my preference being,

https://bkilimited.com.au/

 

[luutzu]

He doesn't get it. It's really like comparing the money one would save in interest by paying out a mortgage against the earnings one can receive in dividends.One cannot make money by saving money. His is a typically Asian 50 cent bet view of everything. Watch the movie "Balls Of Fury" it's summed up in one scene.

I don't know what Asians you've met there, but all the Asians I know are up to their eyeballs in mortgage debt.

I thought Buffett and Munger also advised against high debt. i.e. "little to no debt".
But sure, as long as others keep giving APA money, they'll do well.

Lao Tzu says, those who stand on tip toe is not safe.

 

[Value Collector]

I don't know what Asians you've met there, but all the Asians I know are up to their eyeballs in mortgage debt.

I thought Buffett and Munger also advised against high debt. i.e. "little to no debt".
But sure, as long as others keep giving APA money, they'll do well.

Lao Tzu says, those who stand on tip toe is not safe.

The issue of notes and bonds listed above is not a "capital raising".

Warren and Munger are fine with debt for regulated assets, and so was graham.

In fact in security analysis Graham talks about regulated utilities as being a special case in which he was ok with higher debt levels.

I doubt either Munger or Buffett would be interested in their Energy or Rail business if they had to fund it with 100% equity.

Both have Berkshire Hathaway energy and BNSF debt levels close to APA, and Both take large amounts of fresh capital from Berkshire to expand.

 

[luutzu]

The issue of notes and bonds listed above is not a "capital raising".

Warren and Munger are fine with debt for regulated assets, and so was graham.

In fact in security analysis Graham talks about regulated utilities as being a special case in which he was ok with higher debt levels.

I doubt either Munger or Buffett would be interested in their Energy or Rail business if they had to fund it with 100% equity.

Both have Berkshire Hathaway energy and BNSF debt levels close to APA, and Both take large amounts of fresh capital from Berkshire to expand.

I know, the chart titled Contributed Equity focuses on... contributed equity, not debt and other financing activities.

Debt is all fine and good if it produces a return above and beyond what it costs. That and over the longer term, say a decade or half that, debt and equity return good earnings.

In BNSF you can see this "trend", in APA you do not.

For a rail/freight business where there are capital expense costs as well as high operating costs to keep the train moving etc., BNSF still produces good return from the capital invested. APA, with pipes that need some cleaning now and then, could not manage to have enough liquid assets to pay for its short term liabilities. So it is borrowing/raising for purposes other than just growth and expansion.

Currently, based 2017AR's figures, its total debt of $9.7B, interests at $500M. Dividends of around $480M... yea, as long as interest rate don't rise and no major fixes or leaks needing real repair (as opposed to accounting ones)... will continue to not die.

 

[Clansman]

I know, the chart titled Contributed Equity focuses on... contributed equity, not debt and other financing activities.

Debt is all fine and good if it produces a return above and beyond what it costs. That and over the longer term, say a decade or half that, debt and equity return good earnings.

In BNSF you can see this "trend", in APA you do not.

For a rail/freight business where there are capital expense costs as well as high operating costs to keep the train moving etc., BNSF still produces good return from the capital invested. APA, with pipes that need some cleaning now and then, could not manage to have enough liquid assets to pay for its short term liabilities. So it is borrowing/raising for purposes other than just growth and expansion.

Currently, based 2017AR's figures, its total debt of $9.7B, interests at $500M. Dividends of around $480M... yea, as long as interest rate don't rise and no major fixes or leaks needing real repair (as opposed to accounting ones)... will continue to not die.

....and yet all through the years of higher interest rates, the stock continued to rise.. and rise... and rise.

 

[luutzu]

....and yet all through the years of higher interest rates, the stock continued to rise.. and rise... and rise.

Like I said, no body lend or invest money in a bad company - at first. It's always the ones with a good story, a good record... then the record turns bad without people realising.

Not realise because they rely on the past when the first rule of don't-sue-me is to not take past performance as indication of future result.

When interest rate was high but APA, I guess, didn't owe "that much" debt... then it's fine. The past few years have seen record low rate...

Its debt now stands at some $9.7B. Its interest at $517M. You do realise that an average guy getting a million dollar mortgage can get a better rate than that 5% right?

So if you want to measure performance based on share price and dividends alone, then yea, go with APA's record. To measure it as a business where debt and equity invested should produce outstanding return (over the medium to long term)... that measure alone and APA cannot stack up.

 

[Clansman]

Like I said, no body lend or invest money in a bad company - at first. It's always the ones with a good story, a good record... then the record turns bad without people realising.

Not realise because they rely on the past when the first rule of don't-sue-me is to not take past performance as indication of future result.

When interest rate was high but APA, I guess, didn't owe "that much" debt... then it's fine. The past few years have seen record low rate...

Its debt now stands at some $9.7B. Its interest at $517M. You do realise that an average guy getting a million dollar mortgage can get a better rate than that 5% right?

So if you want to measure performance based on share price and dividends alone, then yea, go with APA's record. To measure it as a business where debt and equity invested should produce outstanding return (over the medium to long term)... that measure alone and APA cannot stack up.

The stock has had an enviable record over 18 years. Stacks up 100%. Like you say, you are guessing.
Well here's my guess. As long as you and I are alive, it will be a solid company, increasing dividends as it has done year on year for a decade as it's earnings are expected to increase 55% over the next few years. I don't even know why you are mentioning a 5% interest rate and comparing it to a $1 million dollar mortgage rate.
Do you know the rates that some of these no hope spec stocks borrow at just to stay listed? I do and
I would suggest 5% is a good rate on the size of APA's borrowings.

 

[greggles]

I'd like to know which stocks are going to perform like Aristocrat Leisure Limited (ALL).



...and ARB Corporation Limited (ARB)...



...over the next 10 years. Does anyone have a crystal ball handy?