Sold My NZME

September 14, 2017 11:20 PM


Back in February, I wrote about NZME LTD (NZM – Australia), the dominant and highly undervalued media group in New Zealand. At the time, I said that “results will probably range between meh and bleh…,” which is what first half 2017 results showed—declining revenue and stable EBIT. While the stock is certainly cheap at about five times cash flow and an 11.5% dividend yield, NZM was always a place-holder for me until something better came along. I’m increasingly finding better opportunities that can increase many times in value, as opposed to a low risk cheap stock with a nice dividend and I prefer to recycle my capital into those opportunities.

Following NZM's most recent earnings release, I’ve reassessed my investment and decided to exit. My average exit price was around 79 cents. I mentioned the stock at 66 cents. The total gain since mention, including the 6 cent dividend along the way, brought the total return to 29% in just over six months (excluding an extra 5% from appreciation of AUD), which is nothing to be disappointed with—though not as good as the return would have been before the earnings release. In any case, NZM was a success for the home team…

 

Categories: Current Investments
Positions Mentioned: none
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