BBI 0.00% $3.98 babcock & brown infrastructure group

can bbi weather the storm and still paid divy

  1. 323 Posts.
    @ 20 cents and divvy of 10 cent Looks like a BARGAIN at these prices. That¡¯s for sure!

    However a brief look at their balance sheet and I don¡¯t know if BBI can weather a very possible down turn in economic activity and pay its div. Because of the high leverage, this company can easily tip the scale so to speak. If this company has to re value its assets or if it has to sell some of its assets now or during a recession or depression I¡¯m not so sure. I suppose this would also apply to many other shares too.

    With a drop of each percentage point in the official interest there is an additional 0.7 cents per share. And if the official rate is to head towards 4%, as a possible target as reported by the media, this could be a very substantial saving in interest payments.

    Can this offset the down turn in the revenue in these 1 to 3 year?

    Can BBI weather the storm?
 
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