matchbox20.
Thank you for your concern.
You have a high number of HC posts so I believe you are genuine in your concern.
However here are my responses to your concerns:
1. WMC's 100% subsidiary that generates all of the profits operates in China. There is some sovereign risk with an investment in China. Yes there is. We all know that. (fyi there is sovereign risk in every country in the world).
2. The company's dividend policy is to pay 10% - 20% of NPAT as unfranked dividends. Were you expecting 100% to be paid? NO company pays 100% of NPAT as dividends. Do you realize that BHP is going to BORROW money to pay its dividend (as have may other ASX 200 companies). Now that sort of dividend policy is just unsustainable imo.
What happens to the remaining 80%-90% of NPAT that WMC does not pay out of dividends? Does it magically disappear? Does it get misappropriated by those scheming Chinese? No it stays in the company as retained earnings and is used for activities that will provide the company with growth.
3. Directors fees. Four directors and one company secreatry. A total of $120,002 in directors' and company secretary fees per year in total . And that's a problem? Hell, I must admit to investing in ASX listed exploration companies where the MD alone takes home $500,000 p.a. And for what? For running the company's finances down year after year, conducting endless capital raisings and certainly not paying a dividend! In contrast I am really very happy with the WMC director fees.
So matchbox20, I really do not see what your problem with WMC is. I probably am not the best person to allay your fears. If you are serious about investing I suggest you phone one of the principals of the company that floated WMC - beer and co. I cannot speak for them of course, but I cannot see why they wouldn't spend a bit of time chatting with you about their IPO.
Best of luck.
WMC Price at posting:
44.0¢ Sentiment: Buy Disclosure: Held
