Hi
@Dejavoo,
Sorry for tardy response; been away from home pc for a while, so I haven't had chance to properly crunch the numbers on this possible contract loss.
I've always been a bit schizophrenic on this company.... deeply valued on the one hand, but cyclical headwinds aplenty on the other hand. And then there's the debt, of course.
One might be forgiven for thinking I'm describing a value trap.
I think that when one is invested in this sort of low-conviction situation, one needs to maintain adherence to one's sell discipline, otherwise before you know it, it becomes an opportunity cost.
But I'm not sure what I will do with my ABC shares; I've not given it too much thought.
I have a view that one sure fire way that the economy will be kickstarted post-Covid will be via a good, old-fashioned, "build-it-and-they-will-come", Keynesian-style boost to aggregate demand in the short-term.
That, combined with some re-establishment of domestic manufacturing and assembly due to the inevitable requirement - post Covid - to shorten supply chains, will support demand for ABC's products over the medium-term.
But none of these will provide any assistance to the share price over the foreseeable future, I don't think, so I've got this one wrong [*].
So, if a gun was held to my head and I was forced to nominate HOLD, SELL or BUY MORE (from a portfolio construction point of view, ABC is not a meaningful holding, so I have capacity to add to my holdings), I'd say SELL.
But that's not because I believe the stock has any meaningful downside; I think its' too fundamentally cheap to fall much further.
Rather, a part of that is influenced by my personal circumstances in which - following a slew of capital raisings in recent months - I'd like to build up portfolio liquidity to more practical levels. Especially because I believe the re-capitalisation exercise, of corporate Australia, still has some way to run and, for that reason, I feel I want to have capital on hand (more than I would usually hold).
(If that all sounds like the discombobulated ravings of someone who doesn't really have a clue about what to do with his ABC shares, then its probably because that is very much the case!)
[*] Of course, if every one I get wrong is like I've got ABC wrong, I'd be delighted. Because, compared to some of my right doozies over recent years, this one has been relatively painless.