Financial Review has been sticking the boot into RCR every story . It’s been right all along mind you .
Meanwhile I think I agree with Oscar09 ...”wait and see” ( not that I have an alternative)
RCR market cap now only $231 million.
Was the market genuinely expecting the order book of $1.07 billion to be sitting patiently in the wings ?
No the market is not naive so it was not expecting the order book to be as good as was touted at AGM.
So RCR - to me - seems to be priced according to low realities, not pie in sky projections.
As a comparison NRW Holdings has an order book of $2.2 billion, about the same in cash, and market cap is currently scandalously low at $683 million
Maca has an order book of $1.28billion, expects earnings of $620million FY2019, market cap of $322.9 million.
I know it is not a level playing field but if those companies are undervalued where does that put RCR?
Worst case scenario?
The last time I saw one of these it was because the material impact was 40% greater than expected.
Reversing this, in a (hopefully) worse case scenario the RCR update will not put earnings forecast worse than 40% lower than anticipated?
This would reduce the earnings forecast to $600 odd million
So what will they do?
Another round of funding this time at 77c?
Outcome?
Is this the opportunity for a theoretical buyer to take an initial stake really cheaply then buy shares from Alan Gray etc to increase it’s position prior to takeover?
If I wanted the company that is how I would play it ...
But maybe nobody wants RCR after all?
Personally I find it quite unlikeable even though I still think it is good value at these prices
Cheers
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