10/9/07 COA closed below $6.29 offer
even when you account for the divi and franking credits based on a last share price trade of $5.62 on 10/9/07, ex divi date, the share price is still a good 50 cents approximately below the $6.29 ex divi offer made by the consortium at this stage, comprising THE CARLYLE GROUP & NHR.
Well done COA board & mgmt great capital mgmt !!!!
its no surprise that they continue to underperform
Remember QAN?, to avoid shareholders in potentially going through the process that a hostile bid involves and in light of downgrade in overall Aust company earnings in the view of a UBS equity strategist and potential global equity and bond markets volatility the COA board might best reconsider the recent offer made!
Transcript
Interview with UBS equity strategist
Date : 09/09/2007
Reporter: Alan Kohler
ALAN KOHLER, PRESENTER: With the dust settling after another hectic reporting season, the big investors are now pouring over their re-jigged spread sheets to see where the market may be heading and where hidden value may lie.
For his take on the year's profits I spoke to one of the most highly regarded equity strategists in the market, David Cassidy from UBS.
(To David Cassidy) Well David, what was the average profit increase in the latest financial year?
DAVID CASSIDY, UBS: Well Alan it looks like we've turned up with about 13 per cent growth for the full year, FY07. So that's basically the fourth year in a row of double digit growth for the Australian corporate sector, so a pretty good performance.
ALAN KOHLER: Has that ever happened before?
DAVID CASSIDY: Not in terms of our database. It never happened through the 1990s so this is really unprecedented profitability from the Australian corporate sector that we're seeing at the moment.
ALAN KOHLER: How does the reality of the profits compare with the market expectations?
DAVID CASSIDY: Well if you look what we've done to our numbers, in terms of both FY07 actuals and FY08, basically unchanged. 13 per cent for 2007 and still looking for about 11 per cent for 2008. So the profit boom is certainly still with us.
ALAN KOHLER: What are the themes to emerge that really have surprised you?
DAVID CASSIDY: I think certainly the underlying strength of the Australian economy was very clear in terms of a lot of the retail stocks, the stocks exposed to the capital spending cycle, the financials, despite the concern about the financial sector globally through early August, actually delivered a very strong performance, and I think on a more cautionary note I think anything exposed to us economic cycle did show some early signs of weakness there. So that's probably the one cautionary point to take out of the reporting season from a macro perspective.
ALAN KOHLER: And what sectors were there some weakness in that you saw?
DAVID CASSIDY: Well obviously construction materials. We know about that. There's still obviously a housing recession in the US. But some of the domestic US consumer plays such as Billabong and some of the other basic material stocks linked into the US cycle did show some fairly soft numbers.
ALAN KOHLER: And what are the especially standout results that you've seen?
DAVID CASSIDY: I think from our perspective, in health care CSL delivered a very strong result. In ENP services, Worley, an excellent result. In insurance, QBE. I think the BHP result and the outlook statement gave the market a lot of solace at a time of considerable volatility. So plenty of very strong numbers being posted through the market.
ALAN KOHLER: And what about the value of the market, do you still think it's looking soundly priced given what's being going on and also the profit forecast that you've got?
DAVID CASSIDY: I think the sharemarket has been something of a moving target in the last six weeks or so. I think we were briefly on the cheap side of fair value in mid August.
We've probably moved back now to probably the upper end of fair value, or possibly slightly on the expensive side of fair value. But I think with this underlying very strong profit momentum that we've got, still double digit growth in earnings, and remember long term trend is only about six per cent, I think with that profit back drop and the amount of liquidity still out there, I'm prepared to give the market the benefit of the doubt on valuations.
ALAN KOHLER: Is there any possibility of a bear market do you think?
DAVID CASSIDY: I think with this sort of profitability being demonstrated by the corporate sector globally, not just in Australia, I would think a bear market is extremely unlikely at this point.
ALAN KOHLER: Bottom line David, what's your forecast for the market in the light of the continuing credit problems that we are seeing?
DAVID CASSIDY: I think obviously there's going to be volatility in the near term, but I still expect the market to take out its July 24 high somewhere in the fourth quarter, and looking for at least 6500 by year end. So I still think that the three to six month trend is definitely still up.
ALAN KOHLER: Thanks very much David.
DAVID CASSIDY: Thanks Alan.
COA
coates hire limited
