Plough, you have a way with words which leaves one wondering whether to be flattered or not.
I have been posting on Centro for over a year and have written extensively about both CNP and CER. All of my postings are available on the HC threads if you want to look through.
Like a handful of other posters on the Centro forums (we know who they are), I have always tried to present factual arguments based on the underlying fundamentals of the company. The complexity of the two companies, the macro environment backdrop and the irrationality of the stock market has made this all the more complex in the past year.
Nothing seems to have been able to stop the massive slide in share price though.
It should come as no surprise to anyone that a number of the indicators around the CER business are down. CER is also waaay out of favour with everyone because of association with CNP, retail investor losses, negative media coverage and absence of any institutional coverage or interest. Hence the depressed SP and a general reluctance for anyone to return.
We follow a value approach, primarily focusing on (adjusted) balance sheet whilst keeping a watchful eye on (adjusted) income and cash flow.
With CER, it is a well run company with quality management and decent assets. The income is still strong and most importantly, they are now on the front foot addressing issues. It's also the gap between adjusted NTA (which I and others have written about) and current share price which is another factor that makes the business attractive.
When assessing distressed companies (like CER) as an investment, you really have to look for evidence that the business will survive (which is now looking very, very likely) and then the question becomes: how much will it be worth once the cycle turns? Is this significantly more than the current share price?
When the cycle does turn up (and it will), everyone will be on the lookout for highly leveraged, well run, commercial property owners with good stable tenant bases. Leverage kills you on the way down but accelerates recovery on the way back up.
We have a lot of money in CER. We haven't bought any for a few weeks because it was pretty obvious the SP had a way to go down, there was a nagging doubt that something could have come from left-field in the HY results (it didn't) and there are a number of other good long-term investments in the market currently.
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