I've held this for years until recently. The performance of the business is obviously down from the last few years but it's well above what the current SP suggests - super low PE and div yield of almost 10%.
But I'm a bit concerned by the high gearing, with the legal issues and macroeconomic risks overhanging it. If they weren't so geared, the risks would be manageable, it might smash the company's earnings but they'd get through it.
But with gearing over 100%, any major legal fallout or a big rise in bad debts could really hurt and wipe out shareholders' equity. Unfortunately I've had that happen to me a few times, the business survives but shareholders cop a huge dilutive equity raising and basically lose everything.
It's trading at a bargain price for those willing to take the risk though. I'll risk a small holding but I really want to see this legal issue resolved before I jump all in again.
SVR Price at posting:
$1.11 Sentiment: None Disclosure: Not Held
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