re: Ann: FIRSTFOLIO SIGNS HEADS OF AGREEMENT ... As mentioned by...

re: Ann: FIRSTFOLIO SIGNS HEADS OF AGREEMENT ... As mentioned by others it is difficult to put a price on FFF going forward.

The following are some of the factors to possibly impact:

- Over 3 billion shares to be on issue (negative)
- Possibility of a capital reconstruction once the dust settles (negative)
- Use of part of Capital Raising for further acquisitions (could be positive or negative)
- Participants offloading their rights issue shares for a quick profit - (impact likely to be short term negative)
- Who is key investor? (likely to be a positive)
- What if there isn't a key investor? (negative?)
- FFF track record (negative)
- Profitability going forward (likely to be a positive)
- Speed and evidence of change effected by majority shareholder going forward (likely to be a positive)
- The chase for control of a $21B loan portfolio (positive)
- lack of alternative and worthwhile loan portfolios available for potential acquisition (positive)
- What is the market perception of FFF at the time (this is likely to impact greater than technical or fundamental analysis) - as opposed to what is the value based on history, charts, yield, P/E ratio, EPS, etc.? (likely to be positive)
- Is the the overall market a bull or bear market? (could be positive or negative)
- lack of media coverage of the FFF story? (negative)
- positive media coverage of the FFF story (positive)
- success of other (ASX listed) players in the mortgage industry such as MOC, HOM, RHG, iSelect (positive)
- lack of success of other players (negative)


The SP of FFF is unlikely to be driven by fundamentals but rather by a combination of the above? Now if we don't use fundamental or technical analysis then what do we do to determine how we proceed?

Maybe it is just a matter of giving a score to each of the above questions and see if we come up with a positive overall score on the basis of -

Agree = plus or minus 1
Maybe = plus or minus 0.5
unlikely to impact or unsure = 0

If we get a positive overall score knowing what we currently know then maybe this is telling us that at current prices FFF is a BUY or a negative overall score could mean SELL or AVOID.

I took a conservative approach with my scoring and overall my score came out at ..... PLUS ONE.

See how you go.

This isn't rocket science and for me was a fun exercise. There are probably other possible impact questions which could be added to those listed above.

I have exposure to FFF (recent purchases) and owned FFF shares several years ago.



DYOR - don't rely on me - seek professional help.