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Interest.co.nz launches a new resource profiling the companies on the NZX50 - what they do, who leads them, and their financial history

Interest.co.nz launches a new resource profiling the companies on the NZX50 - what they do, who leads them, and their financial history

By David Chaston

In these days of very low interest rates and very high asset prices, the search for different savings and investment choices is underway.

There are many options; property, alternative assets, commodities (including precious metals), even new-age crypto-currencies.

But bond and equity markets are the most liquid options (along with all the derivative possibilities) and they have the 'advantage' of deep processes for pricing risk.

Many New Zealanders have been introduced to these markets via their KiwiSaver investments.

But some of us don't have a great understanding of the companies our fund managers are exposing us to, trusting that the professionals will get it right. It is entirely reasonable trust, but it will never be 100% perfect all the time. (Nothing is.) It is your money invested so knowing something about where it is, is an investor's responsibility.

Then there is the pesky issue of the pandemic. With equity prices so high, how do we know that the market pricing is justified? Who is exposed to pandemic risks? Who will benefit?

These are rightful questions for qualified investment advisers.

But before you approach them, it might be a good idea to school up on the companies and sectors involved. Unfortunately, unless you commit considerable time and some technical expertise to the task, it can overwhelm novice investors.

interest.co.nz is launching a basic resource that can help get you started.

We have a modest ambition to start.

We have released a simple list of all the companies on the NZX50, and will update it weekly with a recalculated ranking of market capitalisation. (Capitalisation is the market value of the company's shares at the current share price).

As at Friday, October 2, the market value of the NZX50 was $152.9 billion, about the same size as the combined household holdings of term deposits ($98.5 billion) and savings accounts ($63.2 billion).

Our ranked list also gives the option to inspect some financial details of the companies in this group. We are developing basic profiles for all them, but have released only the first seven. We will add at least one each week from here on, and keep the already released ones updated as new annual report data becomes available.

Each company profile is designed to introduce you to the company. Basic details of what they do, who leads them, their financial trading history, their cash flows, their financial structure, and the advisers who support them are covered.

Also included are links so you can easily find the resources we used to build these profiles.

This is an introductory service for new investors, and isn't intended to replace the research and analysis a professional investment adviser offers.

Navigation for the companies covered is here.

We welcome your feedback.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

13 Comments

Good work. Are you planning to deliver something like SimplyWallSt or Stockopedia?

Thanks for this, looking good so far. Hopefully it'll help bring people round to the fact that the stock market is where you buy chunks of real companies and share in their earnings, rather than the casino that some portray it as.

Very true, but it can still be a casino if you don't do your research before investing in shares of a specific company.
It is not just the P/E ratio, but several other financial and non-financial aspects, and knowledge of the associated markets, that must all be considered.

Yes shares and (most) bonds are the most liquid options and they have the advantage of deep processes for pricing risk.
But the bond market has been virtually made meaningless by the reckless zero interest policies and QE by the Central Banks. This mis-pricing phenomenon applies to all asset classes, yes, but while in other classes you have also the opportunity of capital gain, in case of bonds the yield is the main driver (as, with interests already at rock-bottom, there is virtually nil opportunity for further capital gains on bonds).

one of the biggest things i look at now is CEO and board, if you have a dud CEO and a weak board it does not take long to destroy the value in the company, case in point fletchers. i sold in 2015 at 8.2 been a shareholder for years and years but i could see the CEO they hired was a dud and the board were to weak to reign him in or get rid of him, by then he had already lost over a dollar in share price.
so now i take particular attention to changes of CEOO and board especially the chairman and move straight away, its better to get out lock in profits than hope he will come good

What, like Genesis Energy? Where the new CEO of 2016 has seen the NPAT fall from $184m to $46m, yet the dividend has increased over that time from $0.164 to $0.172. Don't you just love 'free' debt?!

Most retail investors wouldn't have the wherewithal to investigate a CEO's previous track record, but I agree it's a good indicator. Spierings seemed to have a credible track record but that didn't work out well. Without knowing what sort of restrictions were placed on a CEO by the Board and why, it's pretty hard to guess where they'll take a company. Plus you'd need to know the history of the Board members. Not many investors could be bothered to spend that sort of time - that's why we have analysts

As an amateur share and bond investor, the former for around 40 years I agree very much with this. Any pronouncement by a CEO has to be taken with a pinch of a salt. Self promotion. Using a financial advisor cum portfolio manager and an investment fund with no advisors, the financial advisor a number of years ago recommended Fletchers which I duly bought. After Fletchers tanked I asked the investment fund why they didn't have any Fletchers. They had been around to some of Fletchers major building sites, talked to those on the ground and decided Flectcher Building should not be part of the investment fund. A similar situation existed when Fonterra's shareholder fund was floated. The investment fund didn't like Fonterras shareholder fund model so didn't participate in the IPO. Not so with the financial advisor/portfolio manager.
I suspect many financial advisors tell you what to buy but don't follow up and recommend divesting. Too many clients or insufficient funds with them to bother?
Mainzeal also in the board CEO relationship muddle.

So you sold in 2015 @ 8.2 and gave up the rise to 10.2/10.5 in 2016? Nice investing strategy.. left 25% on the table. Seems you ain't as smart as you think. Sure hope you only manage your own money

i put those funds into mainfreight at the time, sometimes something better is out there for those funds
as for timing i never try to time a short term market that is a sure fire way to lose money, rather i look at long term trends and directions

I'm assuming you don't have much experience of investing? No-one is capable of picking the absolute top and the bottom every time, and you do not need to do so to achieve decent returns. You have unrealistic expectations and it's particularly unfair to use them to shoot down someone sharing their experiences.

It's not the CEO'S are the problem.

Times have changed, and changed for good. And Interest.co.nz, more than any NZ site, should know whay and why.

Shares, globally, are overpriced in the same way houses are, and for the same reason. The continued attempt to perpetuate exponential growth is what drove the bubble(s). Correction or collapse, are the options. I sure as heck wouldn't be advising people getting into things at this late stage.

you are correct in that all asset classes seem over priced but that is a consequence of debt creation (money printing) and until that stops it will not correct any time soon
example i own shares in tesla they are up 280% since i brought them at the beginning of the year, and that is with factories closed, losses.
even elon tweeted they are way over priced yet they still go up ?