I think this is the bottom of the trough, opportunity to accumulate if you have the dolls
Any particular reason you want to share with us for this line of thought?
Chart looks very bearish to me ... and while the RSI is in deeply oversold territory ... just look at what happened the last couple of times with the share price when it was in this territory ... (hint: it plateaued and had than another steep drop).
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"Prediction is very difficult, especially about the future" (Niels Bohr)
I have been watching tower for a while now... the thing that puts me off is the dividend policy is up for review, which to me means no dividends for a while. I think there is a lot more pain to come on this one.
I have been watching tower for a while now... the thing that puts me off is the dividend policy is up for review, which to me means no dividends for a while. I think there is a lot more pain to come on this one.
No doubt they will reduce the divs probably to zero. I still think Tower has a protectable customer base and remains a takeover target so will recover. It remains to be seen how long that will take. Pure value investor opinion here.
No doubt they will reduce the divs probably to zero. I still think Tower has a protectable customer base and remains a takeover target so will recover. It remains to be seen how long that will take. Pure value investor opinion here.
I tend to agree - no dividends for maybe 18 months as they retain cash to work through expensive Christchurch claims tail end. The situation with Peak Re is the greater concern as it could be a $50m hole in the accounts which would need to be plugged by a rights issue (which would be ironic given the shares the company was buying back at $2 a pop) to ensure they meet capital adequacy etc. A rights issue would likely be something ugly like a 1 for 2 at 60-70 cents.
The parent can draw down debt to cover it and they are debt free as a group which is very good. Just overall a lot of uncertainty and definitely a value play as the upside is still $1.80-$2.20 for a "clean" Tower making around $25m npat annually and paying out most of it in dividends or renewed share buybacks. The Peak Re situation needs to be sorted asap.
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