re: the market crash is close ABN-AMRO: NCP - Why I like...

re: the market crash is close ABN-AMRO: NCP - Why I like it.
31/08/04 By: Ben Smoker

Stock Specifics

NCP: Note in the AFR yesterday talking about local insto’s (the three biggest lenders of NCP scrip) having to recall their stock that they have out on loan to the shorters in the market to enable them to vote on the US reincorporation. (Vote likely mid-late Oct). Total borrowed stock is 300 mill shares. This may put a squeeze on the ordinaries as hedge funds might be forced to cover their shorts.

Additionally, it’s trading on an 05 EV/EBITDA of 8.6x [20% discount to L/T average]. But even more compelling is the fact that News Corporation trades at a significant discount to it US peers, c18% to Disney and c19% to Viacom (News Corp on a A GAAP basis). Management recently stated that it does not expect a significant difference between FY05 US and A GAAP reported earnings.

Get on board – medium term outlook:


3/09/04 By: Ben Smoker

NCP: Currency helped it a little over night. Closed equiv $11.20 in OZ$ terms. BE PATIENT.

I like it medium term and think it’s worth a punt. Downside $10.80, upside Plenty …Still no major offshore buyers stepping up to the plate in the Corp as yet. This really is becoming a waiting game into the vote mid-late October. In my view, play the 10.90 – 11.30 range but I would not be caught short as the risk must surely be to the upside if the vote gets up. ADR’s last night were subdued $11.09 in AUD terms.

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