Its interesting to see the talking down of management in Cooper,...

Its interesting to see the talking down of management in Cooper, it should be noted that yes they haven’t created a lot of shareholder value, if you simply look at the share price today. Now we all know that the share price at any one time is not necessarily a true value of a company. As we have seen with the recent takeover bid for PES (Pure Energy). A couple of months ago people could have complained that their management hadn’t created enough shareholder wealth as the share price wasn’t rocketing. Now it is, everyone will love the management.

The problem you have to look at with management of many companies, whether they be sole traders or small listed companies, they have a limited number of people in management and thus limited pool of skills to draw upon when making decisions. Cooper has a management team that has been good at exploration and production, but they do not necessarily have the best team when it comes to the corporate side of things.

IMO I believe that Cooper management have probably used external advisers on corporate actions. Now often in these cases there is a conflict of interest. For example if Cooper were in discussions with an adviser, the adviser would get paid a hell of a lot more if a takeover was to occur than if they recommend that Cooper were better off sitting on a pile of cash and sit back and relax for the time being. Cooper management, like many other companies management would probably have been sucked in by some pretty presentations on how they could increase their companies wealth. Now depending on managements style, but in many cases, they see what seems to be an easy way to increase value and they jump on board the advisers recommendations without giving necessarily enough evaluation. When you are dealing with the smaller end of town, this often the problem and won’t be changing anytime soon.

My opinion is that Cooper’s management need to focus on what Cooper does well and that is keep drilling holes in the ground. As long as they keep doing this, I will maintain my investment in Cooper.

A side note to this, I do believe that the management are paid too much for the job they are doing and that management need a reality check. The business they are running is not big enough to justify their current salaries.