what are peoples thoughts here, page-2

Hi

I first got into this share because on paper it seemed undervalued. That was at a much higher price than this - I think about 45 cents. My view was that it pays a good dividend and the market capitalisation was less than the paper value of the assets. I sold after a dividend and before the fall to the 20 cent range. I have been in and out of the share since. I am currently back in - came in at about 27.5 cents.

It seems to me that the following are true:
- its part of a cluster of companies with cross-ownership including Soul Pattinson, New Hope and Brickworks;
- the cross ownership suits a conservative group who control these companies. Perpetual recently challenged their hold and got nowhere;
- the controlling interests are very poor at disclosure and their strategy is unclear;
- in the API space, pharmacy wholesaling, they have alienated a number of their customers (such as fdken) and they seem to lack some commercial judgement;
- nonetheless, we can assume their self interest includes trying to make a profit and to keep paying dividends;
- the share may fall lower - there is a precedent for this back in September;
- the price is probably low currently partly due to sales after it went ex-dividend;
- in the current market there is some chance of mergers and acquisitions, however the controlling interests seem averse to loosening their grip and are unlikely to sell.

On balance, I plan to stick with my original call - the share is cheap on paper. There is some risk in not knowing why its cheap but a good chance that it will keep paying dividends and eventually go up. In the meantime it may dip close to 20 cents. I hope to hold my nerve.

: )