myr could have more bleeding if like tol, page-14

It's interesting to see negative evaluation of MYR in your and others' recent posts based primarily on its NTA (which, it's true, is under zero). I feel this analysis is misleading, as the valuation of a company is primarily dependent on its future net cash flows, although having a high NTA does help in providing some margin of safety to the investor.

But MYR is not the only company in the Consumer Discretionary sector that has negative or very low NTA (relative to the market price). Prominant examples include News Corp (SP $20.33, NTA $2.21.. was negative in 2003 and before), Tatts Group (SP $2.60, NTA -$1.11), Wotif.com (SP $4.00, NTA zero), etc. Even in the Consumer Staples sector the leading companies have low NTA's, eg. Westfarmers (SP $29.50, NTA $4.72) & Woolworths ($26.38, NTA $1.94...was negative in 2006).

Agreed that a higher value of NTA gives a higher margin of safety in the event things go wrong, such as in case of Harvey Norman and david Jones, but the future SP performance will be dependent primarily on their future earnings and cash flows. In that regard MYR is looking better (with F12 Net Profit projected by the company to be upto 15% lower cf FY11 NPAT) than DJS, for eample, which has projected its NPAT to be around 35% lower cf FY11 result. But of course DJS share price is holding better than MYR's, seemingly because (i) DJS is seen as a better T/O target because of its higher NTA which an acquirer can strip off and (ii) market is a little sceptical of MYR being able to restrict its FY12 profit decline from F11 to 15%.

Your analysis of Balance Sheet items is also rather selective and therefore misleading. It's true at HY result MYR's creditors amounted to $487m, but these need to be balanced against not only its cash holding of $122m but also inventories of $391m (which is the reason MYR owes to creditors), ie a total of $513m.

Even the bank debt of $420m represents a debt/Equity ratio of about 48%, which is quite reasonable if not low.

Of course if you start talking about an armageddon scenario, having property or other tangible asset backing would undoubtedly provide a little more comfort, but my observation is that in such scenarios, regardless of what assets a company has, there is usually not much, if anything, left fot the shareholders after banks, employees and creditors have been taken care of. From that perspective most companies in ASX are un-investable!

Finally, I am curious as to why one would waste one's time in putting out posts if one holds no MYR shares and regards this company as too risky to invest in. Just wondering whether you are shorting this stock, as negative posts may help your cause!