Good on you
@gmac55 taking 22.5c. As I said, all things considered at this current point of time, I could only see GRR's sp going down. Hope you got out with a profit, if so, well done. Should have took my own advice.
But I must admit, the sp dropping to 19.5c so quickly did come as a bit of a surprise. Thought the sp might at least hold above 20c until X divi and then slide down into the teens second half of March. It's starting to look scary now. Thursday afternoon a couple of posters mentioned 21c might be the floor, well the sp fell straight through that floor yesterday. Again thinking about things with a bit of logic, don't think 19.5 is the floor either.
The question now is, how is the sp going to be held up, let alone be pushed back up between here and end of March when the divi is paid? ATM a buyer is looking at an immediate return (now) of 2.5% @ sp of 20c. Now a couple of days ago some people were saying, "Stan, GRR also paid .5c last Sept, so it's a 1c divi return for the year." Agree that if you're working out the annual return, you would include that in the calcs. But, the divi that was paid 6 months ago means nothing to a new investor considering buying in now. And new investors/shareholders are the only hope of holding/pushing the sp up.
So the Risk v Reward prospect for new investors buying @ 20c now is $AUD0.005 divi (Reward) and then a wait until end of September for possibly another divi, possibly a bigger divi if they're lucky (Potential Reward). Risks, there are a couple. The sp drops down to Cash or Cash & receivables backing, entirely possible, sp traded below cash backing for much of 2016. Depending whether you're taking trade receivables into consideration the Cash backing level would be 16.5c or 14.3c, a 3-6c drop from 20c sp. Putting aside the fact that the majority of you reading this are current shareholders, if as a new investor/shareholder you were faced with a Risk (3c loss) v Reward (.5c divi) scenario would you jump at it? The other risk is the Sept divi only being another .5c or worse, no divi at all. Again entirely possible. This board is very conservative (putting it kindly) with paying dividends. Their philosophy appears to be closer to 'how little' rather than 'how much can we pay'. And how do you think the board might react if the OI price does take a dive in the next 6 months.
P.S. This post is merely about the sp, the direction it's headed and some reasoning as to why. Everyone is welcome to post their opposing views and their rationale. Totally understand people's bemusement that I say the m/cap should be 600mil and yet I'm saying its going to be under 200 by end of March. A riddle I've grappled with for a number of years, as many of the longer term readers/shareholders will attest. TBH it's been difficult to comprehend, but in the last 12 months I've come to understand this is more than merely a numbers game, there are other elements at play here. As for the company's m/cap, ROI's and what could or should be done to realise better outcomes for shareholders, that's another conversation all together.
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