what are peoples thoughts here, page-4

I like this one and I am the main buyer today. As readers will be aware I have been researching and dabbling away at several of the struggling stocks namely PPX, ELD, BSL. Of the four I have decided to go for API at this time and these prices.

One of the things that attracts me to this one ahead of the others is the lack of hybrid stock. I don't see an easy solution for Elders and PPX in being able to sought it out fairly for both classes and the existence of the hybrid stock largely destroys any takeover potential. That is not the case here.

Just a few of the things that attract me to this one, the market cap at 25.5c is 124.5m. Net tangible assets are almost three times that at 73.5 cents. Price/book ratio is extremely low at .21. Sales are 3.425 billion or a massive 27.5 times the market cap. Operating cash flow was $48.2 million or 38.7% of the market cap. Underlying profit was $20.8 million which, if accepted as the current profitability, puts the company on a price earning ratio of 5.98. Just to add cream to the mix the company has announced a final dividend of 1.5c making a total of 2.5c for the year or a yield of 9.8 percent. Debt was reduced by $16.3m over the last year and doesn't seem too much of a problem being $185 million compared to net assets of $554 million.

Seldom do you get a chance to buy a stock that is incredibly cheap in terms of assets, very cheap in terms of underlying profits and cash flows, selling at a tiny fraction of the annual revenues and paying a very solid dividend yield. And this company is just coming out of a shockingly testing period with a series of once off calamities most of which were beyond the company's control.

The company's swift response to the PBS reforms and the Pfizer decision to go direct drew some criticism here and clearly hurt the businesses of some of their customers but the company in its annual report seems satisfied with the outcome and the feedback.

This is not a company going down or even in trouble as far as I can see. I thought the full year result was better than the market was expecting and I do not know why it has fallen back to these low prices.

GPASAS