"Is Mondi near its top?LSE:MNDI:Mondi is a share I have been covering for some time, with the latest update on April 11. It is a company that is rarely in the media limelight - which is the way many long-term investors like it. It does not ..."
Mondi (MNDI) continues to demonstrate that packaging is the place to be. Despite a sluggish European economy, structural decline in uncoated fine paper markets and annual maintenance shutdowns at several mills, the packaging giant posted higher sales in four of its five segments, sending underlying operating profit up 30 per cent to 490m (£345m).
A number of factors contributed towards significant profit growth and a punchy return of 19 per cent on capital employed. The company sold higher volumes of packaging at higher prices: average benchmark rates were 3 per cent higher for virgin containerboard and sack kraft paper in Europe, and key paper grades sold for more in Russia and South Africa. Lower input costs were favourable, too, as were depressed energy prices - Mondi is a significant consumer of electricity. Low wood prices in Europe were especially positive, helping to offset some of the damage caused by a weak Russian rouble.
Completed capital projects - including a bleached kraft paper machine in the Czech Republic and a pulp dryer in Russia that can produce 155,000 and 100,000 tonnes a year, respectively - came in handy. Management reckons these and other investments in 2014 added 35m to operating profit.
Broker UBS expects adjusted EPS of 134¢ in the year to December 2015, rising to 150¢ in 2016.
ORD PRICE: 1,579p MARKET VALUE: £7.7bn
TOUCH: 1,580-1,581p 12-MONTH HIGH: 1,606p LOW: 919p
DIVIDEND YIELD: 1.9% PE RATIO: 21
NET ASSET VALUE: 780¢* NET DEBT: 56%
"We live in an increasingly paperless world, but packaging remains big business and South African firm LSE:MNDI:Mondi is thriving. Supported by growth in Russia and lower costs, the company this week reported record earnings, triggering upgrades ..."
They have been a spectacularly AWFUL investment for me, m8. The scoundrels forced me to take useless Mondi Ltd shares (African ones, say no more) so I've never been able to turn the useless divis, which were paid in what passes for money out South Africa way, into proper money.
To add insult to injury, they then forced me to "sell" my shares, gave me a cheque for a risible sum in South African Kwachas (or whatever they're called) which I was unable to turn into sterling because of exchange controls. The incompetent swine must have known that.
May Cynthia Carroll toil for ever in Dante's seventh circle of hell.
Is there a less discussed company than this one in the FTSE-100? It is only fair that I disclose an interest as my partner works for them, but from a low of 120p just over 5 years ago they have been a spectacular investment. An acquisition in the US earlier in the week, followed by yesterday's re-iterated 'Buy' from a broker and an upgraded price target from 1275p to 1325p can only be positive for the SP and is probably the reason for today's rise.
tt - Looks like you are a bit of a lone voice on this board! The answer to your question may be that MNDI actually generate income in many currencies from their mills around the world. The income would need to be converted to euros to state results (another spectacular set today BTW), but profit increase/decrease would be based on the relative performance of all currencies from the countries where they generate income verses the euro. HTH.
PMI in Europe is not good and worse still retail sales are down. The growth in European markets is not happening. Euro likely to go down. In my opinion that takes down the Mondi share. Just about everything to push the stock down is coming out of late. The rise today is piggy back on FTSE 100. That won't last as the next leg down on USA markets could happen later today.
This is a buy lower down ignore broker suggestions of 1300. Unlikely to happen with all Mondi markets under current pressure is my opinion. (I am losing a small amount here).
904p to be tested if the FTSE does not hold 6400. After around 875p it is a big drop. Perhaps trading 2 times book value with quite a debt and interest rates in some countries increasing, I guess a correction on Mondi is inevitable. Broker downgrades tend to follow after the event.
I was near even at 8:30 am today. A little more patience with initial moves and I would be on a better pitch. Now it really looks decent value. See how next week goes. Not all that often Mondi loses so much in a day. The problem with small dollop buys is that selling off and buying back is hardly worth it. Keep in draw for divi.
Just a 100 shares so far to follow this one along. If the growth story is true than this should go blue and probably clear 1100 again. Simply things like cardboard increase in sales volume along with economic activity.
"Apart from the cheque debacle do you view this shower as a possible investment?"
Well I'm probably biased as a result of that cheque debacle, but I incline to the view that it's best to stay clear of any company which is heavily exposed to South Africa. In addition I can't get very excited about cardboard and paper.
I too used to have Rexam but sold out some time ago. I seem to remember that I did OK with it but nothing spectacular.
Still looking for somewhere to put my Greggs proceeds .... should have left the wonga in Greggs, judging by today's news from the eponymous baker!
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