Thought it would be good to start a new thread. The other one...

Thought it would be good to start a new thread. The other one depresses me - This morning a I bought a few @58.5c and I could have got a few more @53c had I ever dreamed that it would not be oversubscribed.

Personally I think looking at the orders to sell often they are in lots of 100,000 or 50,000 now a 1 for 5 its unlikely that those are from shareholders who have been around its more likely that those are BPotter clients getting out and locking in any profit - this morning one such offer popped up 100,000 to sell @59c. I refused to bite and offered 58.5c for what I wanted just shy of 40,000 in a couple of orders - I refused to pay up to what was clearly a stag. Someone else took most of that out.

I must say I have been proven wrong in this company - I believed that the shareholders would kill each other to get to the 53c stock. I expected it to be at least 20% oversubscribed - it was not and here we sit with the fallout. Unhappy shareholders who see that even after the cheap purchase their unrealised profits are down or if they purchased post rights they are badly down having probably paid around 69c and now trading at 59c. Bpotter obviously got the 5% fee and when faced with a large shortfall placed it into its general client base - my assumption. I cannot see an institution being prepared to take $53,000 investments so its the larger privates that in my opinion got this stock.

Now to the future:

I am not sure whether Firsova is correct and this will be over in a couple of weeks - I am not sure about that. I always think day 2 is harder than day 1 because those trying to get in have got what they want and you are trying to sell day old bread- I think it could have a bit of downward pressure. Below 58c I hope not.

The next Half year due at the end of February:

EPS : This is a difficult one because the three acquisitions will only settle during this month so we will only get around 3 months income. Then there is the impact of Scanmedics which we did not have for the full interim last year. The second - half of 2015 produced an eps around 1.9c I would be happy if we had that at the interim. so I think it will be around 2c. That would be a significant increase over the 1.27c PCP. Then as we have the full shooting match for the second half I would expect around 2.5c to get to 4.5c for the full year.

DPS: The interim @ 40% would be 0.8c and the final would be 1c taking it to a total of 1.8c.

Using previous metrics - I would expect that the share price should trade at not less than a 15PE ( personally think it should be closer to 20) that suggest 67.5c however by then I think the market would be looking to further growth and I would expect it to be closer to say 18 or 20. Also you have to remember than we still have the new businesses income for only 9 months. If you use 20 thats 90c if you use 18 thats 81c

The fully franked dividend of 1.8c would gross up to just shy of 2.6c on current prices that a yield of 4.2% and on 80c of 3.25%

All of those are in the right area for valuations of north of 70c and south of 90c.

So why is it here - I dont think it has the full audience as yet. its still relatively unknown. The huge acquisition and number of shares in play is just far too large for the audience it has traditionally has had. I dont see the company as needing to raise capital in the next 2 years and if they retain 60% of the earnings I expect to see it generate some acquisition capacity of its own over the next two years.

So assuming no new capital raising's needed and a finite number of shares - remember the total shares in issue have grown substantially each year since 2012. The market needs time for this audience to grow and if no new shares are arriving then we will , my opinion, see the share price recover to the early 70's and beyond.

I dont think that Firsova is correct I dont think it is very short term I think this retrace upwards will take a few months at least and probably into the early part of January.

I am still in accumulate mode.