random investment thinking aloud, page-37

"...given the recent drop in price would you now consider it in your buy zone? I noticed on the thread you said you may sell and then repurchase"

@vindin,

Well, if all the stock that I tender into the buyback gets accepted for re-purchase from the company, then I will review whatever alternative investment opportunities exist on receipt of the funds. At the moment there are other stocks on offer that I think are more undervalued that CTX, so I would be buying those instead of CTX.

But if given a choice between holding cash and investing in CTX from afresh, I would certainly do the latter.

Understand that CTX has been a very high conviction investment for me for the past two years, the result of which has left me with a disproportionately large portion of my personal wealth invested in the company.

The company's $1.4bn franking credit balance has always represented for me, from when I first started buying the stock some three and a half years ago, the scope/opportunity for an off-market buy-back which I thought would present the opportunity for me to lock in my capital profits in a tax-effective manner (when Chevron exited, my confidence levels in an off-market buyback rose markedly).

So for me, the CTX investment has largely played itself out. I still think the stock is undervalued...by maybe some 10% to 15%.
But its not that deeply under-valued that between 15c and 20c in each dollar I possess still justifies being invested in CTX.

When I first bought CTX I paid $14.55/share, believing firmly that, once refining activity at Kurnell ceased, somewhere between $30/share and $35/share was the true intrinsic value of the business. So my upside potential at that time was material, justifying a large investment.

Fast forward to today, and some new information that has since become evident (namely, Tabula Rasa and the sustainably better-than-expected performance of the Lytton refinery), means that I think the intrinsic value of the company is today closer to $37 to $40 (the $40 upper limit corresponding to a corporate transaction scenario).


"if you don't mind me asking how do you determine your buy price/time?"

I don't mind at all you asking, for the answer is a very easy one:

I buy when the market pricing of stocks is at a steep enough discount to what I assess the intrinsic value of the business to be.


"....as this is your thread and you are not interested in TA if you would prefer not to have charts posted then i will abstain"

Being the champagne Communist that I am, this is not my thread, comrade.
It belongs to us all.

You are free to post whatever it is you wish... someone is sure to benefit from it.

Don't forget:

"From each according to his abilities, to each according to his needs."