Caketin You know I hate this game. When they place to SOPHs the retail guys say why not me. Why not the smaller retail guys why do outsiders get the best deal. We now are as a group saying I won't take up if the acquisitions don't stack up ... I don't want more shares.
I think I am realising that shareholders are never happy.
I have for the past 6 months decided that the acquisitions by in large have been deferred until the new CEO got his feet under the desk. Life health care just got sold to PEP on a 21 PE historical. On a 20PE PGC would be worth around $1.20. That would possibly get then close to a asx300 with that lofty PE.
The acquisitions would be good for PGC we need to get into the ASX300 to do that we need to have an 18 PE and a market cap probably just north of $250 million. So assuming we are to raise $80 million and to buy strategic prices to the puzzle at say a reasonable PE then we would at say 5PE ( bit low) get earnings of say $16 million and at 8PE around $10 million. So add that to ours and say we end up with around $20 million then @15PE that's around $300 million EV and say above the $250 market cap.
This is and was a roll-up of a fragmented industry and PEP are not playing in the game just to be good - they see money and are prepared to pay 21PE for the building block.
Really I expect you would have to have a discount that's a given - especially in a large raising. The brokers must have convinced the market that there are acquisitions that are worthy of this and the share held up yesterday so let's accept that there must have been some leakage... So I reckon they have the pieces to the puzzle and want the cash in the bank. I will back that and take up shares - as much as I can afford if offered to me.
Is there short-term weakness - possibly more often then not its retail investors selling some to get some cheaper in the CR... - Every raising has been at a higher price... The share has outperformed since the change to MS and the team.
At some point if I don't trust management I should not be a shareholder - I have made a lot of money on PGC and still see a future to ride. Personally, I think we will all be happy once we know what is going on...
So Caketin we have been down a long road with PGC and I think DVA (OVH) won round one ( first to a dollar) but who will come out on top - I think it may well just be PGC
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)