be patient... and thou shall be rewarded!

I am confident that PPX & PXUPA will start to perform from this year (FY12) on, as I have opined also in my earlier posts.

Monday's announcement by the company is not surprising, given that its CEO, in its online briefing in June, indicated (in response to one of my questions) that the company was not as advanced in its restructure as some of its competitors that were currently profitable. The statement in the announcement that the FY11 loss will be at the higher end of the indicated range means however that paper market is still soft. So cost reduction must be made. And although the additional $10 million after-tax write-off due to proposed restructure is disappointing, the resulting annual savings will add to the future profit... every year!

Having moved up quickly from 11c to 19c within 3-4 days, it would not be considered unusual for the sp to settle back somewhat, given the nature of the announcement. However, weakness in PXUPA (due to constant dumping presumably by Goldman Sachs) is a little surprising, but clearly Goldman Sachs and/or their clients have lost patience, or perhaps confidence in the company to recover in a hurry!

I believe most potential buyers are playing the waiting game, as there is still some time to pass before turaround becomes visible. But the NTA (around 30c) & NAB (90c) (support higher valuation for PPX... and a higher buffer for PXUPA.

I think we need to be more patient... to be rewarded handsomely in the end! ...And as long as PXUPA keeps paying interest, the PXUPA holders are already being well rewarded, albeit with some risk!