While I agree looking at the cashflow statement at Dec 2007 it shows a sorry state of affairs. But the business model of Centro is to buy assets with borrowings and then try to sell most of it off to others while keeping management control. This means that for most of us cashflow analysis is very difficult. Most investors do not have accounting knowledge.
Secondly the New Plan purchase was a large purchase and we have not seen a full year's affect on the P&L, but the quarterly stats looked very good.
Many like me are taking a semi calculated risk based on the quality of assets held by Centro. Many in the market act like sheep and follow it up or down. Investors here are enthusiastic punters and the form guide is not always complete.
Centro has over 800 shopping centres so selling a few here and there over or underbook value will not make a lot of difference in the long run. What it will do is repair the cash position and give the bankers and investors some confidence moving forward.
And finally, as an ex-employee of the ASX - what we use to tell prospective investors is that shares are a long term investment - do not expect to make short term gains as shares will always go up and down, but in the long term the trend is up and the rewards are above cash and property. Those of us who buy 100k+ shares could be looking at a nice little income stream in the future - whether the $6 share price is going to take 3 years or 5 to achieve long term we are looking good.
CNP Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
