Wintonstock ... you rightly say that "I think their strategy has involved taking on more risk from more asset purchase in order to protect their divies".
I've interpreted "taking on more risk" as "borrowing more money". However, isn't almost the entire financial world based around this?? Even the major banks borrow money to lend it at extremely high levels of leverage.
As such, to my mind there is not an issue with taking on more risk. The issue really comes down to is the risk properly priced by AFG when they take it on.
I do agree that price might take a while to rebound. The low threes, however would be a yield of over 20% (including franking credits). The implies a big dividend cut is expected - or a high likelihood of the business going bust. Company announcements to date do not support either of these. Having said this, the way the market is at the moment any price is possible short-term.
MJS
gotta be close to the ......, page-11
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Last
$1.43 |
Change
0.040(2.89%) |
Mkt cap ! $385.8M | |||
| Open | High | Low | Value | Volume |
| $1.38 | $1.43 | $1.38 | $1.476M | 1.056M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 4 | 9093 | $1.42 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $1.43 | 1180 | 1 |
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| Last trade - 16.10pm 12/07/2024 (20 minute delay) ? |
| AFG (ASX) Chart |