I am unsure why TGA's share price has retreated nearly 10% recently. The SP closed at $3.02 on 28/05/2015, and it was $2.98 at the time of my previous post on 30/05/2015 - it closed at $2.73 on 04/06/2015. The ex-dividend date is 30 June 2015, so that is not a factor behind the recent share price decline. History has shown that TGA's share prices are remarkably fickle for a company that is a steady performer. Since listing in December 2007, TGA's reported results substantially aligned to what management has opined would happen.
A significant exception to management's expectation was the future profitability of the NCML acquisition of March 2011, which has panned out to be a fizzer. The Rent-Drive-Buy initiative did not liveup to expectations, and was abandoned, but the trial did not exposures TGA to much expense, and so management's big picture predictions panned out as expected. The unsecured personal loans business has survived for years, but it may transpire to be less successful than management hoped. However, businesses fading away is normal for the nearly-80-year-old TGA. The radio business faded away decades ago, and TV and PC leasing are fading away too, but new lines of business, like white goods and furniture, have covered for these declines within TGA's core personal leasing business, while Thorn Equipment Finance seems to be racing to success in the corporate leasing business – thus adding a new customer demographic to TGA's customer mix.
The report at http://www.*********.com.au/fnarena_news.asp?a=AV&ai=34977 suggests that four brokers, Morgans, Macquarie, Goldman Sachs and one other, had “hold” ratings when TGA's share price was circa $3.00. If the half-year ending 31/09/2015 surprises to the upside, as I think should happen, then brokers and investors will revise their valuations. For now, I'll stick to my gut feeling that we shall see an SP of $3.25 before the end of December.
TGA Price at posting:
$2.80 Sentiment: Hold Disclosure: Held
