(FE) Around the Traps ... with THE FERRET RWE News 8:19:020 16/08/2005 Sydney - Tuesday - August 16: (RWE Australian Business News) - *****************************
Sometimes Ferret is so wrong he should not be allowed near a sharemarket. When UNITED GROUP (UGL) bought ALSTOM in June and made a $140 million placement the column thought the rush for the shares was over the top when they soared from $8.24 to as high as $9.24 (excessive p/e, we opined). Yesterday the shares soared 51c to a record $10.19 before closing at $10.13. This followed the announcement of a 48 per cent rise in net profit to $42.9 million for the year to June 30, a rise in EPS from 29.2c to 41.1c and a hike in dividend from 26c to 30c. Managing director Richard Leupen said the long-term goal was to increase earnings by 10 to 15 per cent a year but, "We expect to again exceed this target in 2006 from underlying operations with over 70pc of projected revenue already locked in from long term contracts. "We are confident of generating earnings gains from both ALSTOM's and PREMAS' current operations, resulting in strong overall earnings growth similar to recent years." Sounds pretty good. P/e is still a bit ... nah, we won't go there again.
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United has had a volatile lead-up to the profit report. It was at $9.67 on July 25 and then fell like a stone to $8.81 eight days later. Then, in the next six days, it bounced to $9.68, on Friday.
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Perth-based engineering services provider RCR TOMLINSON (RCR) made a series of profit upgrades late last year but when the company also made a 1-for-10 issue to shareholders at 57c there was, surprisingly, a 1 million-plus share shortfall. Well, that was a big mistake. RCR has not stopped climbing and yesterday rose 4c to a record 93.5c before closing at 93c. Ferret has followed the company's progress since it was 43c. Yesterday's run came after news net profit for the year ewas $6.47 million, much more than double the previous year's $2.48 million. Managing director John Linden says the outlook for the engineering services sector remains "extremely strong".
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The banks are nuts. A small super fund we know has $300,000 on term deposit which expired the other day. The bank rang up for renewal instructions and offered 5.55 per cent for 12 months. The super fund manager pointed out that the interest rate dodger the bank had sent out a few days earlier had offered 5.6 per cent for 8 months and, please, whether the super fund could have the same. Oh, that's for amounts ranging from $50,000 to $99,999, the bank's representive explained, and if the super fund wants the same for its $300,000 the rep would have to get special permission from "global" or some such. Does this mean bigger amounts are disadvantaged? The super fund manager reckons he'll solve the problem by splitting the $300,000 into, say, five lots of $60,000. Now the bank will have to administer five accounts for the same deposit. The super fund TRIED to keep it simple.
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Anthony on the email says that house prices in the city are "not down to scratch". Rather than being forced to move to other cities or regional centres to find "down-to-scratch" prices, he suggests young homebuyers in Sydney should be supported by a multi-billion-dollar slush fund. About $5 billion would be a start. Come on, it's not like it's real money, it's only taxpayers' money.
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It's been a taste of the good old days for BIOTA (BTA) shareholders. A couple of weeks ago when we figured out its suit for $308 million to $430 million damages from GlaxoSmithKline - a case about which Biota was "very confident" - represented $2.25 to $3.16 a Biota share, the stock rose 5.5c to 52c. Last week, when a newspaper report said the German Government had ordered 1.7 million packs of Relenza for its influenza antiviral stockpile, the shares rose further to 65c. Yesterday, when Biota received written confirmation of the stockpiling, the shares rose 19c to 84c before profit-takers struck and the stock closed at 76.5c. Actually, we should have said it's a SMALL taste of the good old days. Biota went as high as $7.75 in 2000.
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There's a speculator down at the ASX who regularly bemoans the fact he ignored the advice when he was "told" PALADIN (PDN) when the stock was 1c. Paladin recently touched $1.84 and yesterday was $1.55 (down 3c for the day). YAMARNA (YAM) is similar only in one sense. It's 1c, or rather 1.1c, up 0.2c yesterday, after an option agreement to acquire up to an 80 per cent interest in a uranium and minerals project on the island of Niue, a sovereign nation on the Pacific Ocean 480 kms northeast of Tonga. Niue with a total land mass of 261 sq kms is the largest coral atoll in the world. Uranium? ... coral atoll? ... the greenies will be red with rage.
(Comments and complaints to [email protected] - no requests for advice please.) ENDS !END
