Stock Guru: Wannabe Gurus pick Telecom to perform

Monday 9th February 2004

New Zealand's largest listed company, Telecom, was the most favoured stock by a country mile among entrants in Sharechat's 2004 Stock Guru Game.

The phone company last week posted a 21.3% rise in first half net profit to $365 million and promised to lift its quarterly dividend from 5 cents for the second quarter to 7.5 cents in the third and fourth quarters. Telecom has changed its policy from paying 50% of net earnings in dividends to paying out 70%.

However, there were no surprises in this and the results were known before entries to the game closed.

Those who chose Telecom totalled 114, nearly 32% of all participants, while the next most favoured stock, chosen by 83 entrants or 23%, was The Warehouse Group.

International consultancy Stern Stewart judged The Warehouse the worst performer among New Zealand's top 30 listed companies in 2003, calculating that it destroyed $810 million in shareholder wealth in the year ended June 30, 2003.

By contrast, those 24 people who chose Freightways in their portfolio will be smiling at today's news that the company reported an $8.5 million maiden first-half net profit and that it will pay a higher 5.85 cents a share dividend than it forecast in last August's prospectus.

The most popular stock outside the Top 50 index was Hirequip which has featured often on Sharchat forums. It was chosen by 46 or nearly 13% of entrants.

The latest news from Hirequip was just before Christmas when it announced the $21.2 million purchase of central North Island company Ready Hire which will raise its annual turnover from equipment hire from $50 million to $65 million.

Perhaps surprisingly, only a handful of people attempted to created a balanced portfolio - hard to achieve when you can only chose five stocks - by chosing index funds. Only five entrants chose the Tenz Fund, made up of the 10 largest stocks, while only one person chose the New Zealand Mid-Cap Index Fund.

DON'T MISS THE ACTION. GET TO THE STOCK GURU GAME HERE

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Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.