June is a silly period generally for ASX stocks. It lasts a little longer for TGA, because TGA goes ex-dividend on about 30 June, and then there are the five trading days that are used to price any applicable DRP issues. The interests of shareholders participating in the DRP are best served by a low price in early July, so they may be disinclined to bid up the SP then. There may be a brief extension of the silly season if DRP participants want to return a quick profit on the discounted shares they acquire via the DRP. I for one will hang out for a larger gain some months hence.
For the current DRP the Record Date was 02/07/2015, and the DRP was set at a 5% discount of average for the five trading days starting 06/07/2015. I do not know what the arithmetic weighted average was over that period, but it would be roughly $2.49, so those shares would cost DRP participants about $2.37.
What many investors may have forgotten is how good the results for the year ended 31/03/2015 were. When the final Annual Report is published, this may lead some investors to re-assess the value of TGA, and the SP should climb up to about $3.00 again, and beyond that towards the end of the calendar year if the H1 ending 30/09/2015 is a good-news story, as I suspect will be the case.
Recently I bought 15,000 more at $2.598, plus I subscribed to the DRP, and expect to get another 8,000 or so. These are shares for the playpen that I'll sell with little compunction if the SP gets to fair value, or above. I have not worked out what fair value to me should be, but in very loose terms, I suggest at least $3.00.
