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06-07-2007, 10:47 AM
#101
The first post in this thread says it all - EPS down 33% - So SP should go down. Buybacks are artificial - the market rules - the market knows that finance companies are having their margins squeezed.
Don't worry about BKburger, ST L, HG etc
They are not going to invest more in an industry whose short term prospects look dreadful.
ie economic slowdown, retail investors facing cash crunch etc
see you at $1
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06-07-2007, 10:53 AM
#102
Hoop
"Now the interesting thing with DPC is SP $1.61 NTA/S $1.92 !!!!!
NTA is $1.92 - does that assume all loans are collected. does that assume all deals work 100%. Does that assume property values (including head office at 20%??? of nta are valued fairly etc etc
What was bridgecorps NTA - Answer - it does not matter when you have no cash!!!!
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06-07-2007, 10:55 AM
#103
also - no cash - no div - yield goes down - sp goes down - very simple formula
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06-07-2007, 11:40 AM
#104
Member
quote: Originally posted by dsurf
also - no cash - no div - yield goes down - sp goes down - very simple formula
Absolutely true-no cash,can't pay bills,call receiver.
But what makes you think DPC are near this?
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06-07-2007, 12:56 PM
#105
NTA is $1.92 - does that assume all loans are collected. does that assume all deals work 100%. Does that assume property values (including head office at 20%??? of nta are valued fairly etc etc
A fair question to which I can't answer with certainty. I think nowdays there are in place certain requirements for disclosure not like the bad old days where as an example Brierleys under Paul Collins control made their balance sheet look really good by overstating the value of their underperforming investments.
A piece from DPC annual report 31/03/2007 for what it's worth
...
5. Investments
Investments are recorded at current market value.
Investment Properties
Investment properties have been valued at net current value as determined every year by an independent registered valuer.
The basis of valuation is the market value less the estimated costs of disposal. Revaluation gains or losses have been
included in the net surplus for the year and the Statement of Financial Performance does not include a charge for
depreciation on investment properties.
Property Intended for Sale
Properties intended for sale are recognised at the lower of cost and net realisable value.
dsurf..I disagree about the no cash statement.. they have cash on hand and lots of it, about $23M, although less than the previous year.
They aren't producing cash (profit) but they are not asset burners either as the NTA has continued to rise each year.
I suspect that they will not be a large cash producer for a year or two. The reason may lie with the direction they are heading. They are shying away from high return risky loans (car loans, HP) for safer lower returns such as property. Also the reverse annuity mortgage (RAM) market is a very lucrative area that DPC is heading into, but in this area it takes time for the fruits to ripen. At the beginning money is sucked out to give to the oldies (backed by Kiwibank), the RAM costs and interest payable by the oldies is [u]deferred</u> until they die or 10 years whichever happens first. So in the short term with all the outgoings DPC income statement will look sick, but this is deceptive as it's monies is compounding so at the end of the day DPC will eventually realise a tidy return on their investments, but this will take a few years to materialise and slowly at first.
So you don't have to be a rocket scientist to deduce that the finance companies vultures will probably stay away (re: hostile T/O) until the income flows improve. The shareprice will be depressed and potentially undervalued in short to medium term unless some unusual activity causes a demand for them. ST L, VIK, Hugh Green, NZ economy, Govt, are the wildcards.
[u]Conclusion:</u> With the RAM being created,and a move to safer lower return investments, I would not blame management entirely for the poor rate of earnings and would not assume DPC is in poor health.
Disc Hold DPC.. may accumulate when the tide turns
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07-07-2007, 11:34 AM
#106
Member
DPC should look at buying some Bridgecorp basement bargains.
This stock shines so bright that it \"Bling Blings\"
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07-07-2007, 05:03 PM
#107
No way! Too many cockroaches in that basement and many haven't been spotted yet.
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Never try to teach a pig to sing. It wastes your time and annoys the pig.
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09-07-2007, 12:58 PM
#108
KJ Posted - 06/07/2007 : 11:40:41 AM
--------------------------------------------------------------------------------
quote:
--------------------------------------------------------------------------------
Originally posted by dsurf
also - no cash - no div - yield goes down - sp goes down - very simple formula
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Absolutely true-no cash,can't pay bills,call receiver.
But what makes you think DPC are near this?
KJ I do not think DPC are anywhere near calling in the receiver. I was just pointing out that if EPS falls then dividends will fall the the SP will fall.
Also they can keep the dividend up for a while with retained cash like Hellaby's did - however this has -ve growth implications.
Anyway you look at it - there are currently no reasons for the SP to increase.
Can anyone see any I am missing?
p.s. BKBurger reported that he sold his shares for circa $4 in a blatent attempt to convince the market they worth more. The transaction involved a hotel that was "valued". Values are artificial black box calculations that move with intertest rates, liquidity, "market prices" etc. NTA is valid for a break up proposition. Who is going to sell out? Who is going to undertake a T/O?
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09-07-2007, 04:03 PM
#109
Member
dsurf-I have been a critic of the management of this coy in recent times.I think their performance has been pathetic.
However their cash position appears strong with Current Assets of $279m (including cash of $35m) & Current liabilities of $215m.On the surface it looks fine.The dividend paid was only around $3m-hardly a big imposition. So your point about "no cash" does not sound right
Their profit was impacted by one-offs of about $5m-without that their NPAT would have been about the same as last yr.With a new CEO you would expect a thorough check for one-offs.
Sure-in the short term their SP is likely to remain weak following the Bridgecorp collapse-I suggest all investment coys are currently affected by this right now.
Im fact the sp will remain weak until they start to show some positive signs of a turnaround-St L involvement should be helpful with perhaps a merger coming up.
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09-07-2007, 05:56 PM
#110
St L are only involved because they lent Bridgecorp money. Now ST L are the saviour? If Bridgecorp had not had a couple of "one offs" in the last year they would have made (big guess) 20m?? like they did the year before.
JK DPC will not run out of cash - that was never my point - my point was that the share price is far more likely to continue to fall than recover.
As the thread says the SP is likely to disappoint.
Also - the new CEO's master strategy - RAM will invigorate the company just like the backwards D logo
Going backwards all right - shareholders getting rammed!!!!!
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