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Tony Morgan has a Vital problem and seeks emergency help understanding his -37% losses, so worrying his nose is bleeding

Investing / opinion
Tony Morgan has a Vital problem and seeks emergency help understanding his -37% losses, so worrying his nose is bleeding
boxer hit on nose by debt punch

Tony Morgan (TM), calling "111".

Operator, Merry Xmas, this is Marylou (ML), can I help?

TM, Roger this is Tony Morgan, I have an emergency.

ML, Sir, my name is Marylou, not Roger. please explain?

TM, My apologies Marylou, Merry Xmas, and what a lovely name you have, huh?,

ML, hey thanks, but no time for small talk Sir,

TM, Sorry Mary. Hey please don’t call me Sir. My wife does occasionally and it drives me nuts. I am no Sir; the Queen has no idea of my existence. ML , I have a bloody nose.

ML, Mr Morgan, a bloody nose! Surely that is not so bad? This is not a Xmas hoax?

TM, No, no, no Mary please stay on the line. I really do need your assistance.

ML, Mr Morgan please explain and could you in the first instance give me your location?

TM, Sure Mary. Marokopa..

ML, Are you sure? Not Marokopa? Are you lost, gone missing in the bush, oh no not again, you are pushing this a bit far Mr Morgan…

TM, Mrs Lou. Please excuse me , but no, this is not a hoax, I am, we are real Marokopians, just a bit north. We have helicopters and planes flying over us all the time. I am not lost. The trees are close and the sea is just over the hill…I am no bushman, even though I may look like one. I am desperate Mary; my vitals are going down…

ML, stay with me Mr Morgan, hang on…what vitals?, I thought it was just your nose.

TM, Mary, please keep this to yourself, but Vital has been my worst investment this year, the stock has tanked..

ML, mmm, Tony, I am not a stockbroker you know! I’m not really meant to get into small talk, but gee on my analysis Vital Healthcare (VHP, #26) is up for the year. How can you be down?

TM, No, no Mary, Vital (VTL), the broadband and radio network owner!

ML, oh my God Tony you’ve done it now. I see, I am looking at the charts right now, down from mid 80s to mid 40s, you must be hurt, feel really bad?

TM, Hey Mary, you are right, but just your words, your words comfort me. But what shall I do? Is a helicopter ride really going to save me or should I cut its throat, take the hit or should I hold my breath and hope for the best?

ML,  Mr Morgan, hey Tony I mean, I am only new to this game, a Sharesies, Hatch girl, you know, but if you want my opinion??

TM, Yes, Yes

ML, mmm…Well really it is an important business Tony. Only nationwide Radio network, fully digitalized. That’s how we are talking.  That network fully supports all our St. John service across the Country. Furthermore, they have hundreds of kilometers of broadband fibre in Wellington and Auckland that serve hundreds and hundreds of commercial customers, including Wellington Electricity, Powerco and many other important utilities. There is hope Tony.

TM, Thanks Mary, but what about their debt? Could they die? I am sure my anxieties are caused by their debt of about $15m, hanging like rotten fruit, that is causing all that blood to rush to my head!

ML, lie down Tony, take a deep breath, don’t lose it.  What I have learnt in my short sprint towards saving and wealth accumulation, is to slow down, stay calm in the rough. Yes, you have been caught with your pants down. Excuse me Tony. But remember the CEO, Andrew Miller bought a bundle of shares at 80c earlier this year, surely he is not dumb!

TM, I suppose you are right, but…

ML, no buts Tony, stay calm.   With $35m, mostly recurring revenues and with the majority of capital spending behind them the future actually from my perspective looks quite appealing.  They have huge cash flows; the debt shouldn’t be a tombstone calling! It could be a buy from here.

TM, A Buy?

ML, Good Tony at least I would wait for their next report, should be mid-February to gauge how they are dealing with the situation as we emerge from all the pandemic disruption. I see they missed out on the big contract for us and other essential services beyond 2026, but it’s not all doom! And I see they have bought a guy on to drive sales. They can now focus on what matters most, existing clients, then potentially new ones.

TM, Oh,Oh, I do feel a bit better.

ML, And history Tony, history. You have to remember history when investing.  Do you remember that Spark a few years back was gonna take them over for 80c, back when they were Team Talk? They certainly looked a dog then.

TM, yes, yes I do, thanks for reminding me, oh Mary, you are a saviour. I think, I think I am recovering, getting a better handle on my troubles. I can see the light a bit more. I can hear the birds singing again…there is hope.

ML,  Mr Morgan, sorry but the Radios are ringing here I gotta go, you’ll be alright, sit tight. Maybe go for a walk to the beach. A bit of fresh air, then clean yourself up, wipe that nose.

I must go.

TM, so long then Mary, maybe another day?

Mary Lou has gone.

The vagaries of investing.

Stay tuned.

Tony Morgan has run a portfolio management business and an equity brokerage, both of which were purchased by Craig Investment Partners. He now runs a small family office that invests globally. Other articles in this series can be found here. And the profiles of all the NZX50 companies can be found here.

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NZME up 101% in 2021. Follow the money. Government spending.