Forum Archive Index - July 2000

["Mark Hubbard" <mhubbard@es.co.nz>]

As these were my two main NZ shareholdings, I've had a pretty good two
weeks, although, I did take profits last week (I've almost made back my
losses from April).

Sold WHS for $5.15. My own discounted earnings valuation put this share at
somewhere between $4.60 and $4.80, before the expansion into Aussie was
announced. I've taken the opinion that its still trading at about a 15-20%
premium, nevertheless. I have also been growing increasingly worried about
its domestic outlook, especially impact of low $NZ and low consumer
confidence on earnings. What are other's opinions on this (if it ever tracks
down to $4.40 or $4.50 I would probably pick some more up)?

Sold all my FEG in two tranches: the first half at $6.61 and the second at
$7.00. (50% gains were too good not to lock in). The capstone investment I
feel is overheated, which gives scope for FEG to come back down again, when
I would be interested in buying back in [I'd still like to be round for the
restructuring}. (I note Capstone [Nasdaq CPST] dropped almost US$3 last
night, its second day of trading, so this should bring FEG price down about
NZ 15 cents on monday). Any opinions on current valuation for FEG?

So, with a bit of money in the bank, and assuming these two shares don't
come down so I can purchase back in, what I really am interested in is
sharechatters opinions on undervalued shares at the moment, especially on
ASX (I still don't like the way NZ is going, other than perhaps the
exporters). Please note, and chartists don't take this personally, but I'm
not too interested in 'charty' stuff, just what companies have shareprices
that understate the value of future earnings.

On NZSE RBD is IMHO trading at about a 15% to 20% discount, however, that
share just never seems to realise value. Although with its interim report
coming up soon I may think about it. On ASX I think UCR (United Group -
engineering), which is having an awful year, is now over-corrected, however,
I'm already invested in that at AUS$1.55 (now AUS$0.99), so I lose a lot of
diversification by increasing my holding. Also, the company is yet to
quantify its likely drop in earnings this year over the previous, so its
very hard to value [IMO a value of about AUS$1.40 to $1.60 may, I said, MAY,
be justified - anyway, I've decided to stay in for the long haul on this
company due to great track record previous to this year, and their very
healthy forward order book].

So, I'll be interested in the recommendations that I can research.

I seem to have turned myself, at least partially, into a trader :)

Cheers


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