bring back the smiles, page-37

FB...

I should have saved the spreadsheet!!

One thing that I did try was to see whether the [sum of gaps] were different if you took ASX as the leading market or Nas as the leading market. My reasoning was that if one was the leader, the sum of gaps with the following day on the other market would be lower. They turned out to be exactly the same! That makes me think that the two markets just adjust to each other without a clear leader.

As I think I mentioned, the SP tends to be slightly higher in the US. That could be because of the flow of CDI's to common stock, but it could also be because of my fixed exchange rate assumption (0.91).

At the closing SP of $5.80 in US, buying over $1 on ASX for the purposes of arbitrage is hardly worthwhile. When the price was mid to low 90's, there was a clear gap. The drop on ASX on 30/3 created an opportunity that was waiting to be taken up, since UNIS didn't drop to the same extent. Most of the time UNIS and UNS are within a few % of each other. Hence yesterdays rise.

I can't prove how many buyers and sellers were converting between common stock and CDI's, but the incentive was there and the market responds to incentive. I think it helps to look at both UNIS and UNS in tandem to see what the overall sentiment is. Last night's UNIS was a higher low, but still a lower high, so I don't think its quite out of the woods.

TDA...
I know... I'm such a philanderer!! I haven't bought any UNS, but I'm watching with interest. It's probably the Lovenox connection! I like the prospects, but there are a couple of things stopping me.

1. ST - downward trend SP. Waiting for it to stabilize.
2. Still trying to estimate earnings projection. AGM presentation suggests revenue of $400M by 2014, which looks to be approx $0.80 per unit. Someone here suggested $0.27 earnings per unit, which sounds about right (perhaps on the high side) given the revenue projection ie. $135M earnings by 2014. I'd be happy for any pointers in that department.
3.It doesn't look like production will ramp up until 2012, so that might keep a dampener on ST SP growth.