new analysis from ord minnett, page-4

This report agrees with a lot of what a number of us have been saying for some time. There are some things in here which I hadn't thought of. There are also some things missing - like the huge write-down in DPF / DPFI, which are going to have a big impact on EBIT.

I guess if CNP turns to custard on Thursday, one or two of us might be able to get part-time jobs at some of the major research houses to get the cashflow going again.

On a mathematical note, if JP Morgan... sorry Ord Minnett.. are predicting a $2.90 SP by Jan 09 (about $2.40 up from today in just under 12 months) then buying 100,000 of these little CNP bad boys (which would cost you $50k today) will return you on average about $20k per month from the next 12 months. Hopefully, the bulk of it this coming Thursday.

I'm excited! But unfortunately sceptical at the motive:

Ord Minnett... hmmm... is that the same Ord Minnett whose largest shareholder is JP Morgan (JPM)? (Now, JPM are not a majority shareholder. The majority shares not owned by JPM are privately held by Ord Minnett staff in trust - who do you reckon is the alpha male in that relationship though - JPM or Sebastian in the mail room?)

Anyway, as we know from research and previous posts:

1. JPM are one of Centro's bankers and presumably responsible for part of the debt extension.
2. JPM were the largest shareholder in the Goldman Sachs / CER substantial shareholder notice from a few weeks ago.
3. JPM have been buying substantial amounts of stock on market recently.

But I guess, just because Ord Minnett have a chunk of shares owned by JPM, it doesn't mean there is actually a connection does it?

Well, to check this out, I rang Ord Minnett and asked to speak to the analyst who wrote this report. After I found someone in Research, he confirmed that Ord Minnett do not have an analyst who covers Centro Properties (gasp!). He confirmed the report was written by JP Morgan and rebranded under the Ord Minnett brand. In fact. JPM do stacks of research for Ord Minnett.

If you would like to verify this yourself, you can either:

1. Call Ord Minnett on (02) 82166300 and ask to speak to the analyst covering CNP. They will tell you there isn't one and you need to call JP Morgan.
2. Call Rob Stanton, the analyst at JP Morgan who wrote this report, on (02) 9250 4111.

Now, I'm a big holder of CNP so really anything that is going to cause the SP to head north will get the thumbs up from me. Anything that comes close to verifying my own research is going to make me feel good too.

I appreciate there are Chinese Walls in place but, I've got to say, researching CNP has caused me to run into JP Morgan a lot recently. I have nothing against JPM / Chase Manhattan / Chemical Bank / Bank One or anyone else in the group (I have used their ATMs on many occasions), but JPM do have a bit of history with WorldCom and Enron - details on Wikipedia. They also seem to have quite a lot at stake to ensure CNP stays afloat - both lending and client reputation.

I also don't get why this report only looks at one of the possible options put forwards by Centro - asset sales. What about the other option - injection of equity? Is that completely out of the picture or just too scarey for existing large shareholders?

Oh well, I'm sure it's all conspiracy theory, but hey, it's fun. I guess with the share price moving sideways, the hedgies off playing elsewhere and everyone else in a holding pattern until Thursday, we need some excitement.