today's afr article

There was an article that appeared in the AFR today that I wanted to share with readers on this forum and it is summarised below as follows:

The over-geared property group was the top performer on the S&P ASX Small Ordinaries Index last week with a gain of over 40% as investors took the punt that management would be able to overcome debt issues and unlock value in the severely depressed stock.

Debt worries aside, positives include the portfolio of student and seniors accommodation assets should generate stable cash flows regardless of the economic cycle.

Furthermore the stock could be seen by many risk-tolerant investors as cheap given its one year forward P/E multiple of just 2x and its 65% discount to NTA.

Despite these factors you'd still be hard-pressed to find a broker who would rate the stock as a 'BUY' however. JP Morgan thinks the stock is a value trap given that its future lies in the hands of its bankers.

Gearing is high at 74% and it has to refinance its $132.5MN domestic head trust debt which expires on December 22nd this year.

JP Morgan has an 'UNDERWEIGHT' rating on the stock and a price target of 5c.

They are clearly of the opinion that ILF won't be able to refinance come December 22nd.

Hopefully they'll be proven wrong.

I think that a unit price of 14c for this stock is ridiculous enough in itself yet alone a price target of 5c!