Hi Septic,I think that they have traded the shares in the past,...

Hi Septic,

I think that they have traded the shares in the past, but looking through the cashflows, it appears that since the losses of 2009, they have only sold shares, not purchased any.

The losses of 2008/2009 were more like 48% after accounting for the shares sold during the period and dividends, so not as extreme as you may have thought.

A simplistic analysis has returns from share investments of 2007, 16.7%; 2008, 18.5%; 2009, -47.9%; 2010, 15.0% (all including dividends). First half of 2011 looks a bit exceptional, with gains tallying at 63.8% for the 6 months, so I'm not convinced the numbers are quite straight there. However, it is good to see that they at least clarified the accounts this year by clearly breaking out the dividends and gains on investments from revenue, as the earlier reports require a bit more digging.

Overall, it looks to me like they are slowly winding down their investment activities as opportunity permits.

I can understand you being nervous about this investment - any investment this illiquid is a bit unsettling. I also think it unlikely that anyone would be able to have anything other than a small parcel, given the low market cap and lack of liquidity. I have never seen this stock as quality, but I don't see any evidence of directors trying to gouge investors either - salaries don't seem excessive to me and they have paid dividends in the past.

They have not modified their forecast of NPAT $0.7-$1.0m for the year, so at 5.5cps, they are effectively saying the P/E is 1.7-2.4. As well, they had 2.2cps in cash and about 6.1cps in current assets net of all liabilities at last report. Granted they are taciturn and the actual $'s quite small, so scope for big swings in profits, but the external evidence (AusTender), is that their business is trotting along quite well, with good support from the Federal sector.

Weighing this up, I think I can blank out the fear factor until at least the next result at end of August!