Yeah - it was too subtle for me this morning. cheers

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CaptainBarnacles

11,152 Posts.

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18/04/24

15:18

Post #: 73409459
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Originally posted by madamswer ↑

"They gave the exact same guidance at the half year, didn't they?"

"Top half of the $555m-$605m range" (February guidance) is subtly different to "Top end of the range" (updated guidance).

For example, an outcome of $580m to $585m would satisfy the first earlier guidance, but today's update would preclude that kind of number.

Accordingly, I suspect that the market's median interpretation would have been maybe "$590m" in February; while it is probably "$600m" now. So maybe a 2% implied upgrade in the market's mind.

As I said, it's subtle.

But I suggest debate about the magnitude of the change in guidance is moot; when a large-cap, ASX100 index stock is being valued at just ~10x P/E, market perception about the directional change in its fortunes is the thing that matters.

In other words, the share price clearly looks like it was pricing in disappointment, and the opposite has happened (albeit in a merely modest manner); hence the share price response.

This black-box company had a habit of delivering underwhelming results when interest rates were low over the past decade, but now that fixed income markets have switched from headwind to tailwind, it has started to string together two or three solid results.

Won't take too many more like this and that deep discount-to-market valuation will reduce. It won't close completely, mind, but it has room to close a lot, from the current ~70% discount to perhaps a 30% discount... so that's a 40% re-rerating gain on offer, plus the 10%-odd EPS growth, for a theoretical total investment return of 50%.

I can't find any other large cap stock able to offer that sort of return.

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Yeah - it was too subtle for me this morning. cheers

CGF Price at posting: $6.81 Sentiment: None Disclosure: Not Held
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(20min delay)
Last $7.00		Change -0.070(0.99%)		Mkt cap ! $4.837B

Open	High	Low	Value	Volume
$6.98	$7.05	$6.93	$8.282M	1.181M

Buyers (Bids)

No.	Vol.	Price($)
3	10774	$7.00

Sellers (Offers)

Price($)	Vol.	No.
$7.05	38395	7

View Market Depth

No.	Vol.	Price($)
3	10774	7.000
1	7600	6.990
2	20221	6.980
1	2695	6.970
1	2883	6.930

Price($)	Vol.	No.
7.050	38395	7
7.060	15783	4
7.070	9318	2
7.100	42293	4
7.150	11994	2

Last trade - 16.10pm 04/09/2024 (20 minute delay)

CGF (ASX) Chart

Yeah - it was too subtle for me this morning. cheers

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Yeah - it was too subtle for me this morning. cheers

Top Stories

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GDP grows 0.2% in June quarter, but annual growth the slowest since the 1990s

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