Doesnt matter leec ...they use that magical risk factor in the weighting and once they raise that risk factor it lowers the price target...whether they think its pure genius or not... more debt = more risk, even if the income goes through the roof... once the income gets banked a few quarters they generally lower the risk weighting... its why we get good and bad value traps in both directions after significant changes in stocks...
I have had a lot of stocks downgraded on the back of brilliant transactions due to risk weighting, only to watch them surge... and i have seen the opposite, where they sell a great asset and have no idea how to replace the growth and the analyst are forced to upgrade...because the risk factor changed...
Its a good lesson for newbies out there to watch this space and learn from it..
Undoubtedly they have taken on two major risks... i agree with the downward valuation even though if they pull it off the company will ultimately be a lot more valuable.
TGS Price at posting:
24.7¢ Sentiment: Hold Disclosure: Held
