If the FTSE falls below 2,500, AMP's UK liabilities on their capital gauranteed products will blow out to such a degree that they'll eliminate any profits from their Australian operations.
What is a company such as AMP worth?
Answer: AMP is a financial services company. For this very reason, it has a very low NTA. Financial sevices companies get priced at a multiple of their earnings. What will be fair value for AMP if they heve negative earnings for a number of years?
Think about it.
Note: i didn't say AMP will get to $2.00... i have merely said that if the FTSE goes below 2,500, and AMP have not hedged between their outstanding positions between now and then, then they'll be in deep poo-- and $2.00 will be the conequence.
danger amp in decline, page-14
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Last
$1.14 |
Change
-0.010(0.87%) |
Mkt cap ! $2.960B | |||
| Open | High | Low | Value | Volume |
| $1.15 | $1.16 | $1.13 | $4.522M | 3.969M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 6 | 17251 | $1.14 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $1.14 | 91639 | 5 |
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| AMP (ASX) Chart |