1. CAF say: "Legacy claims are expected to be reported and resolved by approximately 2021." Page 64 of Annual Report
If provisions/claims continue at the same pace (they have actually increased again), CAF won't be able to pay a dividend for FY19, FY20, FY21. And that is IF their time frame holds up.
2. The damages from the RC are unknown and the auditors weren't allowed near it. They have classified it as "other information" and the auditor's have distanced themselves from it. Page 75 of the Annual Report.
WTF!
3. There are some fund managers in the stock nursing large losses. If they face redemptions, they will be forced to sell millions of shares when the market depth can't take it.
4. The CFO bailed on 7 August 2018. This unfortunately coincides with the RC and reporting period.
5. If advisers from all those large documented institutions were dodgy, what are the chances that CAF's AR were all pristine? After all, advisers would be looking at each other thinking: "well he is doing it...this is what everyone is doing."
A penalty from the RC would cause CAF to raise capital or sink the firm?
I'm not trying to be overly negative. I'm actually hoping for someone to argue that the risks I mentioned are overstated and explain why.
CAF Price at posting:
19.0¢ Sentiment: Sell Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)