makinMoneyI believe that the company is sound. The large fall...

makinMoney

I believe that the company is sound. The large fall seems most likley to be the result of a number of institutions who took up the float shares (it all went to institutions .. or Private Equity) selling out. What their reasons were we can only guess but my take is that it happened at the same time the Aussie dollar was being smashed .. in other words they were selling ANYTHING that they had bought in Aussie dollars regardless of the health of the company. And they may have been suffering redemptions etc.

Its worth noting that at the same time local institutions like Mapple Brown Abbot and Perpetual were buying! And at well over $1.30 average. They increased their holdings and they are "value" investors. I reckon its very unlikley these two groups would have been buying a company that is going under!!

Its cheap around 40 cents and it looks like it will be supported at that level. Of course if we have another horror few days then it could fall further ... that's when you pick up the real bargains. I have been buying in mid 40s and will buy more if it goes lower.

Profit is expected to be similar to last year's at over $150m so that's EPS of 10 cents. You do the maths ..but I reckon even at a market avergae pE it should be closer to $0.80-$1.00 .. and obviously some institutional investors agree.

H