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#Bull Case
stale
Last edited 4 years ago

16-Jan-2019:  Briefly, exposure to oil/gas (including 28.57% of Beach Energy - BPT), exposure to mining and construction via Cat dealerships in WA, NSW & ACT (WA=WesTrac) and Coates Hire, plus exposure to media (40.88% of Seven West Media, SWM, Channel 7 should do well in 2019 vs 9 & 10), plus this is Kerry and Ryan Stokes' main listed company, and you can do worse than follow a self-made billionaire like Kerry Stokes.

Recently traded at over $22 (in October) - and now back to just above $15 - due to shift in sentiment (energy + mining).  May well be heading back up if Trump and Jinping do a trade deal.

http://www.westrac.com.au/Industries/Pages/Earthmoving-Equipment.aspx

http://www.coateshire.com.au/

http://www.sevengroup.com.au/

http://www.sevengroup.com.au/our-investments/sgh-energy

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#Presentations/Reports
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Added 4 years ago
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Valuation of $24.77
stale
Added 3 years ago
23-Feb-19: If a few things go right for them, they could easily move into the $20s. (My TP for SVW was $19.50 when I wrote this) Those few things include a higher oil price, M&A around their main oil play BPT (Beach Energy), greater demand for their Caterpillar earthmoving machines and equipment (especially in WA), and a good year for Channel 7. This can be a good trading stock. The chart suggests they trend well, so you can ride the trend, which is on the up at the moment (23-Feb-19). 24-Aug-19: Update: The trend did continue straight up to my $19.50 TP (reached it in one month - in March 2019), but has been quite choppy since. I've been out of SVW since March. If they get back down to $15 I'll get interested again. 19-Feb-2020: Well, they didn't get down to $15 again, but I'm interested again regardless. They reported well today and are up around +7% so far on the back of that report. Their outlook statement was positive: "The Group is well positioned to capitalise on the strong medium to long term outlook for mining production, infrastructure investment, east coast gas demand and other domestic LNG export opportunities." Mr Stokes said: “We expect our WesTrac and Coates Hire businesses to be able to leverage their market leading positions to benefit from the new projects planned by major miners and the growing pipeline of government infrastructure projects. In light of this outlook the Group expects FY20 underlying EBIT to be high single digit growth on FY19." I'm back on board. 24-Aug-2020: And then I took profits and sold out again. And then they dived down to $10 in the March pandemic madness. And I didn't buy back in - because I was spoiled for choice and I was concentrating on other sectors. I actually did buy quite a bit of Beach Energy - which I recently exited - and BPT is actually the core holding in SVW's Energy Division ("SGH Energy"), but I wasn't looking at SVW in March, I was buying companies like MND, NWH, BPT and others. Some that I bought haven't bounced back too much yet, like WPL and S32, but I still think they will - eventually. Most have bounced brilliantly. There are 5 companies that I hold that are all up over 20% this month alone (August 2020 - from 31-July-20 to 24-Aug-20) - including ARB, CDA, FOR, MND and NWH. You can't pat all the fluffy dogs. OK, so what's Seven Group Holdings (SVW) worth today? About $22.77 I reckon. I.e. no change from my previous PT. Should get back up there within 12 to 18 months, quicker if we get a CV-19 vaccine that works and is widely distributed. So there's around 20% upside from here, if I'm right. That sounds OK, but I think there's more than 20% upside over the same period in other companies. For instance, from around the $12 level, where they are now, I think MND (Monadelphous Group) can rise 50% over 12 to 18 months. I think NWH, S32 and WPL can do the same. I think there are a number of smaller companies that could double their SP over that period, however they all come with higher risk (of losses). So, that's why I'm not jumping back on SVW at this point. The risk/reward equation just doesn't look enticing enough. 22-Feb-2021: SVW has been sitting at or around my previous share price target of $22.77 since late November, so for about 3 months now, and I think they more likely to break higher than to fall lower in the absence of a market correction or serious downturn. I'm not sure if they are ready to break through $25 just yet, so I'll make my new PT $24.77, by late Feb 2022 (so a 12-month price target). I'm not currently holding them. I usually buy them when they've been smashed, and then sell them when they've recovered and have stopped rising and are moving sideways - like now. I was not holding them for this most recent recovery however - my money was invested elsewhere. From $10 to $22.77 would have been a nice little earner though... in 8 months... 25-Aug-2021: I still like that $24.77 PT for late Feb 2022, however a lot will depend on what happens with Boral (BLD) - which SVW now owns 70% of, and it looks like MQG are building a small stake in BLD also - up to 7.34% from 6.2% on 04-Aug-2021. I'm not holding SVW currently as there seems to be limited upside and because Kerry and Ryan Stokes run it like a private company and use it to takeover other companies, owning SVW shares doesn't always work out to be the best option. Sometimes it's better to get involved instead in companies they are taking over, or building stakes in. I bought shares in Beach Energy (BPT) and Drillsearch when Kerry was building his 20% stake in each of those energy companies, using SVW, then I benefited when he orchestrated the merger of the two companies (via DLS being taken over by BPT). That said, I'm not a BLD shareholder either at this point. Just an observer from the sidelines.
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