Monodelphus - 10 grand grown to $230,000 in 9 years + Divs

Discussion in 'Stocks & Derivatives' started by finicky, Mar 13, 2012.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    A company that turned 10 grand from a shareholder buying 10,000 shares at a dollar each in FY2003 into capital worth $230,000 today.
    But there's more - the average yield over that time was a bit better than 5% franked - you got paid exponentially to wait. The actual dividend slowly exploded from 6c in FY2003 to 95c in FY2011. This year the div will be $1.15 ff - more than the original cost of the share!

    How could you have known? Few could have guessed that it would go on to average a Return On Equity (ROE) of 40% over the decade, but even in FY02 it was making a ROE of 17% rising to 22% in FY03, It had more cash than debt - a balance that it has maintained right through, and it was paying a chunky fully franked dividend. Definitely investment grade - if you could've put that together with the commodities outlook, then searched for a resource services stock, you might just have lucked on this.

    Most ASX participants know Monodelphus (MND), but I only looked back at the history of this stock to check the Rudi Filapek-Vandyck (FN Arena) claim appended below:

    [​IMG]
     
  2. Ozboy

    Ozboy Active Member

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    "Note also that long term investing generates the best results when dividends are combined with steadily growing profits and revenues. This is why Monadelphous ((MND)) has been the champion stock in the Australian share market over the past decade. Whoever bought Monadelphous shares in 2003 will this year receive more than the original outlay in cash as dividend pay-out - not to mention the stellar share price performance over the period." - Oh come on Dr. Who, let me borrow your tardis for just a little while... PLEASE!
     
  3. SilverSanchez

    SilverSanchez Active Member

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    When you think you have found the next blue chip - let me know, i will bow to you and call you king of the internet if it really eventualted into a blue chip - hindesight is always 20/20

    Its completely unrealistic that you wouldnt have taken profits during that time.
     
  4. finicky

    finicky Well-Known Member Silver Stacker

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    I absolutely would not have taken profits in a stock like this. There was no reason too. It was growing earnings and dividends each and every year including FY2008 and FY2009. We held stocks like Woolworths and BHP through the GFC; why the hell would we have sold a goer like Monodelphus? I would have added, not sold. Nov'08 - Feb'09, I would have had 3 months of opportunity to buy this stock at $6 on a P/E of 7 and a yield of 12% ff. I was panicked into selling some bank stocks late GFC, but I did buy a couple of stocks as well. You think MND wouldn't have been one of them after I had intimately experienced its performance of increased earnings since FY2003 - and now offered on a P/E of 7, a ff yield of 12% and debt less than cash? In like Flynn, I would have been.
     
  5. hiho

    hiho Active Member Silver Stacker

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    to be frank I cant believe it, this company is reknown for destroying perfectly good jobs
     
  6. finicky

    finicky Well-Known Member Silver Stacker

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    That is an ethical reason for not holding a stock. It is irrelevant if appraising a stock on its earnings and dividend performance which is all I have attempted. I know nothing of its business practices except that it has loads of high margin paying clients. Doesn't mean I don't care - just outside the scope of the post. First such comment that I have read anywhere about Monodelphus. Now if its the claims on profit performance that you doubt, these figures for one decade come from Morningstar via the Comsec website:

    Company Historicals

    Per Share Statistics

    2002/06 03/06 04/06 05/06 06/06 07/06 08/06 09/06 10/06 11/06

    Earnings (cents) 6.4 9.2 10.9 20.6 35.2 71.1 77.2 86.3 95.5 106.9

    Dividends (cents) ff 3.5 6.2 7.5 19.2 33.0 66.0 72.0 74.0 83.0 95.0

    Book Value ($) 0.38 0.46 0.50 0.58 0.76 1.09 1.21 1.43 1.68 2.21

    Shares Out (m) 73.4 74.6 78.2 79.9 81.6 83.1 84.3 85.9 86.0 87.6

    Net Gearing (%) -22.0 -25.7 -21.9 -10.2 -56.8 -81.6 -99.8 -103.9 -80.8 -67.0

    ROE (%) 17.2 20.7 21.7 36.1 47.3 66.8 65.0 60.6 57.7 49.2
     
  7. EJAM5

    EJAM5 Member

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    How my past 'industry' superfund missed this stock is beyond me! Glad I have my SMSF now...
     
  8. finicky

    finicky Well-Known Member Silver Stacker

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    Monodelphus is definitely going through a correction considering today's share price performance. Three down days in a row, the last two around 5% falls on firm volume, closing prices near the daily lows. Now a short term lower low will be made and will almost certainly be followed by a lower high. Recent support level gone and the most natural level for support looks down at ~$19.

    If anyone's interested in the Montgomery Skaffold current valuation:

    Monodelphus is rated an A1 stock for quality and performance (of course)
    However Monodelphus is seen as overpriced at yesterday's price (03.05.12) of $22.19. Today's price closed at $21.09
    Yesterday's price, 22.19, was calculated as 13% overpriced to MND's intrinsic value of $19.29 for FY12
    Keep in mind that part of Montgomery's buying philosophy is to buy at a discount to intrinsic value that offers a safety margin
    Intrinsic values for FY13, FY14 are currently $22.54, and $25.79

    Resource services stocks look like they're going through a down rating. Another quality one, Forge (FGE) has broken below its uptrending support line.

    MND worth keeping an eye on.
     
  9. SilverSanchez

    SilverSanchez Active Member

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    Maca Ltd as well has come down

    Worries regarding fuel costs? There was also an interview with the Scaffold man where he said mining services industry may take a hit - i didnt know that many people watched ABC
     
  10. finicky

    finicky Well-Known Member Silver Stacker

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    Monadelphous - just keeps powering on

    http://stocknessmonster.com/news-item?S=MND&E=ASX&N=600793

    ASX RELEASE
    21 August 2012

    MONADELPHOUS REPORTS ELEVENTH CONSECUTIVE YEAR OF EARNINGS GROWTH

    Leading Australian engineering company Monadelphous Group Limited (ASX: MND) ("Monadelphous"
    or "the Company") has delivered earnings growth for an eleventh consecutive year, after announcing
    record net profit after tax (NPAT) of $137.3 million for the full year ended 30 June 2012. This was a 44.5
    per cent increase on the previous corresponding period and flowed from record sales revenue of $1.9
    billion.
    NPAT included a one-off after tax gain of $11.4 million from the sale of Norfolk Group Limited shares.
    Underlying NPAT was also a record $126.0 million, up 32.5 per cent.

    OUTLOOK

    ........ There has been some recent market commentary about potential delays and uncertainty of commitments to future new projects. Whilst the long term project pipeline is always less certain, the macro view on long term Australian resources demand remains strong. A deferral and flattening in new project demand may provide some welcome relief to an overheated market and result in more productive and sustainable outcomes.

    The Company's market leadership position and the continued success of its diversification strategy will support sustainable growth. Opportunities for growth in existing infrastructure markets of water and power and longer-term market diversification, including new services and overseas expansion for existing customers, will continue to be pursued.
     
  11. finicky

    finicky Well-Known Member Silver Stacker

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    Sirius is just another freak spec stock that serves to pull the lumpen investoriat into thinking they can pick a goer like it. What are the chances - 100:1? More?

    Monadelphous has always been an investable stock that keeps growing out of its earnings while still paying franked dividends. The opposite of a freak windfall.
     
  12. SilverSanchez

    SilverSanchez Active Member

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    This is why I dont like when people make claims of past returns to justify future performance - its a commonly used fallacy to justify a stock's value and security.
     
  13. finicky

    finicky Well-Known Member Silver Stacker

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    On one side of the room Caput Lupinum is trawling through the sewers of the asx looking for spec stocks that have dropped through the grates. Over here we will focus on pure quality, :)

    The queen of the mining services sector is having another day of the peasants tugging and pulling at her raiments.

    What will happen? Solid footing again just below $15, or will the floorboards finally give way? Is the last year or so building a new base or is it a period of digestion before continuation of the trend? At this rate of descent we should soon know.

    [​IMG]
     
  14. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    ha-ha I'm not sure who's going to win this battle-royale just yet. Holding mining services stocks in a slowing mining sector is too contarian to me. Like holding gold or iron ore stocks right now. I only have to think of Forge and it sends shivers down my spine. :lol:
     
  15. willrocks

    willrocks Well-Known Member Silver Stacker

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    Great. When I get the time machine working I'll be rich.
     
  16. Old Codger

    Old Codger Active Member Silver Stacker

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    Beats our CBA shares!
     
  17. finicky

    finicky Well-Known Member Silver Stacker

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    Here we go - this might be the break.
    Using the idea that the past 14 months might have been a descending triangle for Monodelphus, in which case odds would favour a deeper correction. Not a genuine triangle as doesn't have the touches.
    Still a wait and see - selling volume must increase and the breakout be deeper and confirmed
    Trigger has been the stock going ex dividend yesterday so still a chance of recovery

    [imgz=http://forums.silverstackers.com/uploads/1893_mnd_dly_sept_11.gif][​IMG][/imgz]
     
  18. MyNamesNotBen

    MyNamesNotBen New Member

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    Do you hold this stock finicky?
     
  19. finicky

    finicky Well-Known Member Silver Stacker

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    Not in NotBen, but very interested if it craters. I can't see why it would fall heavily on FY14 results but there's that suggestion from the chart subjectively. Earnings declined but only by 12%. Must be something to do with outlook or lack of clarity about future? It's only on a p/e of 9.3 based on today's price and past year's eps. ROE slid to 38% from 51% but that's still high. Lots of cash and little debt. Always pays out bulk of its earnings in dividends yet has managed till this year to grow earnings.
     
  20. finicky

    finicky Well-Known Member Silver Stacker

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    Like a rock through wet kleenex, but should bounce around $13? Minimum target $12 unless windfall news intervenes. I suspect lower...

    [​IMG]
     

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