RWE 07:04:00 875 10/11/2003 (FE) Around the Traps ... with THE FERRET RWE News 7:04:020 10/11/2003
Sydney - Monday - November 10: (RWE) ************************************
Gee, some punters are lucky. Such as those heavy buyers of FOREST PLACE (FPG) who just happened to decide that Friday morning was the time to snap up a quick 207,000 shares at prices ranging from 35c to 36.5c. Not bad turnover - 207,000 in the first hour compares with an everage 60,000 for the full day over the previous 10 days. At 11.30am or so, lo and behold, knock us down with a feather, retirement home operator FPG gets a takeover bid of 50c a share from FKP (that used to be Forrester Kurts P... in it pre-initials only days). FPG finished the day at 49c on turnover of 469,000 shares. Of course, for every lucky punter there must be an unlucky one - Friday morning's sellers, who are muttering through clenched teeth.
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Shareholders of FOSTER'S (FGL) are finding that the big pubs and pokies selloff for $1.5 billion announced in early August is not turning out to be the bonanza they may have hoped. In fact, shareholders are losing money despite the market generally being strong for most of the time. Foster's was $4.43 at the time of the announcement and although it went as high as $4.61 early last week, the shares went on the skids and bottomed at $4.26 before closing at $4.34. In other words they're down 9c since the announcement. Those shareholders (and it must have been most of them) who took up the shares in the pubs and pokies spinoff, AUSTRALIAN LEISURE and HOSPITALITY GROUP, are behind on that as well. Despite the supposedly heavy demand for the stock, ALH finished at $2.38, below the $2.40 paid by retail investors and a 12c discount to the institutional price of $2.50. We've said it before but when they talk about massive oversubscription to floats, duck. Maybe ALH is too much of a defensive type stock for gung-ho investors who only like growth action these days.
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We can remember when, almost a generation ago, McPHERSON'S (MCP) was for years and years long on promise and short on delivery. It has finally came good and proves once again the value of patience in the sharemarket. Last Thursday it rose 23c to a record $4.38, which was pretty smart buying because on Friday, at the annual meeting, chairman Ray King told shareholders that each of the company's three businesses - housewares, printing and Cork Asia Pacific - had exceeded budget expectation in the first quarter. The company expected to achieve double-digit earnings per share growth this year. Apparently that was not good enough for the market, though. The shares fell 10c to $4.27 on Friday. If the rise is the minimum double-digit (that is, 10 per cent), McPherson's is headed for EPS around 32c this year, putting it on a future p/e of 13.
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It's time those awful reptiles of the press stopped hounding NEWS CORP (NCP) founder and boss Rupert Murdoch over the appointment of son James as chief executive of BSkyB. Instead of burying him they should have come to praise him. Just think about it, how many fathers do you know have two sons - James and Lachlan - so talented they are managing directors of multi-billion-dollar companies before they are 30? Ferret has two sons and, fair dinkum, when he gets home tonight he's going to clip both of them over the ears for spectacular under-achievement. Mr Murdoch is not the only blessed dad. PUBLISHING and BROADCASTING's (PBL) founder Kerry Packer's son James is another chief executive. And what about WESTFIELD HOLDINGS's founder Frank Lowy's lads ... all of them big bosses now.
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These car dealers are making hay while the sun shines. The other day we had AUTO GROUP (ALO) announcing it had made a flying start to the year. The first quarter had exceeded budget and the company expects an "excellent" half-year and an "xcellent" full year. Not that that did anything much for the shares, which are up only 2c to 61c since the announcement. Now AP EAGERS (APE) has got in on the act, issuing an update on Friday. Directors referred to the recent fall in the company's share price and advised that despite the recently announced increase in official interest rates, trading conditions remained buoyant. They were confident that the group's full-year result would reflect further significant profit growth. For the nine months to September Eager's operating profit rose was up 30 per cent. This one did the trick and Eagers rose 15c to $5.97, reversing the gradual fall from the record $7 set in July. If most of that operating profit rise trickles through to the bottom line, Eagers would be a future p/e of less than 10. ENDS
