# AFG - Allco Finance Group



## 3 veiws of a secret (23 November 2006)

Sorry guys to disturb you from your cricket ....BUT AFG has a trading halt  true or false? According to my screen only trades accepted today where up to and including 10am? tea break grrrrrrrrrrrrrr Anybody got any news?


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## BlueTrader (24 November 2006)

3 veiws of a secret, you must be a fortune teller!

Trading Halt, coming off the earlier of Wednesday or the issuing of an announcement, was announced after 6pm last night.  A $500M capital raising was also announced - 2 shares for every 19 held offered for $8 each.

Another announcement coming - seems likely Allco will get involved in the Qantas deal if it goes ahead?  Allco has also recently significantly bulked up its debt facilities and looks set to pursue growth at pace.


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## michael_selway (24 November 2006)

BlueTrader said:
			
		

> 3 veiws of a secret, you must be a fortune teller!
> 
> Trading Halt, coming off the earlier of Wednesday or the issuing of an announcement, was announced after 6pm last night.  A $500M capital raising was also announced - 2 shares for every 19 held offered for $8 each.
> 
> Another announcement coming - seems likely Allco will get involved in the Qantas deal if it goes ahead?  Allco has also recently significantly bulked up its debt facilities and looks set to pursue growth at pace.




will price fall or go up because of cap raising?

thx

MS


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## 3 veiws of a secret (25 November 2006)

michael_selway said:
			
		

> will price fall or go up because of cap raising?
> 
> thx
> 
> MS




At the time I sold CTX and was watching AFG drop to levels of $10.21~$10.26......at the last 15 mins of trading I was anxious to get a print out of how much money was in my bank account.When I found out and looked at the time there where minutes to go I think the price jumped to $10.32 so I said what the heck lets try first thing in the morning ........well history takes over and the share just took off. Question my timing sure but instant karma going to get AFG ,haaaaaaaaaaaaaa and yes dilution of this or that ,but will the price plummet to $9.98 ???? as what was the scenario 3 days ago. No lesson learn't here ...just a case of timing,and being conservative/anxious from time to time ,I can live with that!


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## BlueTrader (26 November 2006)

Hi Michael, 

It doesn't look like the share price will go down - a fair bit of excitement and promise over future deals.

The market should be supportive of why the capital raising is being done, basically for similar reasons as the recent BNB and MBL raisings, for growing their respective businesses.  Now that RCD and allco have merged, they are stepping on the throttle to extend their investment banking opportunities.

There will be bookbuilds for shares not taken up and these shares should be in high demand, producing a higher bookbuild share price.


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## Julia (17 July 2007)

Any current holders of AFG?
It has drifted lower since the failed Qantas deal.
Anyone know anything else that could be causing its fall from favour?


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## michael_selway (17 July 2007)

Julia said:


> Any current holders of AFG?
> It has drifted lower since the failed Qantas deal.
> Anyone know anything else that could be causing its fall from favour?




It might be a good buy soon i think

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 49.4 61.5 75.6 88.5 
DPS 41.0 41.0 42.5 52.0 

EPS(c) PE Growth 
Year Ending 30-06-07 61.5 16.6 24.5% 
Year Ending 30-06-08 75.6 13.5 22.9% *

thx

MS


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## reece55 (10 September 2007)

Of the investment bank style entities, this one has been hit the hardest.

I remember reviewing AFG with one a friend indicating a head and shoulders pattern on the weekly time frame that pointed to 6.90 as a target - initially even I thought that was just a ridiculous target, but what do you know, it actually payed out.

AFG is in deep trouble, with a down trend that just looks terrible. I think clearly there are some impairment issues with their receivables not contained within their financial statements, because valuation wise these guys are actually pretty cheap. Still, the interest margin they achieved as Record Investments always bemused me as it was so high (like 12% and up) - you don't achieve that without taking on some risk. 

Cheers


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## Ken (12 September 2007)

This one moves around a lot.

Good for trading.

I reckon anything under $8 and with a yield of over 6% is worth considering.

The trend may be ugly, but for fundamental investors, the numbers stack up at the moment.

Directors buying.  If you're entering large might be worth buying in stages to average your price out.

AFG potential to rise in big percentages, so might not be a trend to spot.

I hold as of today at 7.68 after trading it 5 times for small profits.


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## michael_selway (13 September 2007)

Ken said:


> This one moves around a lot.
> 
> Good for trading.
> 
> ...




Yep fundamental numbers look now, when price has fallen

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 76.5 92.5 106.1 
DPS 44.0 44.0 46.5 52.0 

EPS(c) PE Growth 
Year Ending 30-06-08 76.5 10.0 19.7% 
Year Ending 30-06-09 92.5 8.3 20.9% *

Thanks

MS


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## Awesomandy (13 September 2007)

michael_selway said:


> Yep fundamental numbers look now, when price has fallen
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Assuming the div forecast is spot on, it means we get around 5.6%, mostly franked. So, even if the sp stays at the same spot for years, it would still outperform a bank account. And, with a forward PE of around 10, and growth forecasted to be around 20%, it's a no-brainer, I think. This one is going into my core strategy.


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## michael_selway (13 September 2007)

Awesomandy said:


> Assuming the div forecast is spot on, it means we get around 5.6%, mostly franked. So, even if the sp stays at the same spot for years, it would still outperform a bank account. And, with a forward PE of around 10, and growth forecasted to be around 20%, it's a no-brainer, I think. This one is going into my core strategy.




Dude correct unless something bad happens all all those forward earnings are downgraded. At current prices, its "cheaper' than MBL, BNB etc

Another similar "good value" stock is MFS. Altough risk rise it may be higher/different

*MFS - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 53.1 45.3 55.4 63.3 
DPS 28.0 30.0 33.0 38.0 

EPS(c) PE Growth 
Year Ending 30-06-08 45.3 10.1 -14.7% 
Year Ending 30-06-09 55.4 8.3 22.3% *

thx

MS


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## reece55 (13 September 2007)

Awesomandy said:


> Assuming the div forecast is spot on, it means we get around 5.6%, mostly franked. So, even if the sp stays at the same spot for years, it would still outperform a bank account. And, with a forward PE of around 10, and growth forecasted to be around 20%, it's a no-brainer, I think. This one is going into my core strategy.




Awesome,
I would submit it just isn't that easy mate, because otherwise don't you think every fund manager would be doing that?

As I said previously in my post, AFG is in a major downtrend, not uptrend. The reason - well, obviously our current crisis in the confidence with the whole financial sector, especially those connected with sophisticated finance. The one thing I will say is that when I worked for ADB, Mobius (a component of the AFG group) were investors in lower grade notes some of the off balance sheet trusts managed by ADB. Some of these are subordinated notes and whilst there weren't any impairment issues that I was aware of, to achieve such high interest margins (as previously discussed), one must be prepared to take on higher risk of the impairment of collateral. So, I would say there is still  a lot more to come from AFG and 20% growth is not a reasonable assumption anymore.

Cheers
Reece


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## Awesomandy (13 September 2007)

reece55 said:


> 20% growth is not a reasonable assumption anymore.




Yes, you are definitely correct. I do apologise for my previous post. Reading back on it now, it sounds like it's all blue sky, but as a matter of fact, the risks are actually quite high, and I should have mentioned that. Anyway, thank you for pointing them out again.


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## golfmos123 (14 September 2007)

Just to add some more blue sky to the discussion.....don't forget, these guys were flying at 11 bucks not long ago with the Qantas deal in their back pockets.  The Q deal goes pear shaped, AFG announce that it doesn't hurt them financially, and on the back of the subprime nervousness, the stock plummets down to 6-7 bucks.  

To me, that is a market over-reaction.  As has been posted recently, at around the 7 buck mark with good yield, this one should be a nice tidy earner (slow and steady wins the race remember...)


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## Pager (26 October 2007)

Anyone bought into them recently ?.

They are on my list to add as a long term holding and getting very close to my price to buy in, about the only thing that is remotly close .

They bought out the remaining stake in rubicon, have said they have no exposure to sub prime, the QAN buyout **** up didnt impact them financialy and they have close to a 6% yeild, why are they still getting hammered


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## Julia (26 October 2007)

Pager said:


> Anyone bought into them recently ?.
> 
> They are on my list to add as a long term holding and getting very close to my price to buy in, about the only thing that is remotly close .
> 
> They bought out the remaining stake in rubicon, have said they have no exposure to sub prime, the QAN buyout **** up didnt impact them financialy and they have close to a 6% yeild, why are they still getting hammered



Pager, despite the assurance that they have no exposure to subprime, I sold mine after reading that they could in fact be affected in an indirect way.
I bought at around $4 so was happier taking my profit and running.

I think there's still some nervousness around AFG, not unlike the same feelings about MBL.

Until that settles out, there are other more stable companies making consistent growth.


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## 3 veiws of a secret (26 October 2007)

Yes I bought in some 2 days ago ...in fact 2nd to last trade of the day.Have expressed glee at the price I bought in,but your quite correct it's not receiving favourable status for its recent purchase of Rubicon. I'm slightly concerned if it dropped to $7.00 ....I hold tightly for now!


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## michael_selway (26 October 2007)

Julia said:


> Pager, despite the assurance that they have no exposure to subprime, I sold mine after reading that they could in fact be affected in an indirect way.
> I bought at around $4 so was happier taking my profit and running.
> 
> I think there's still some nervousness around AFG, not unlike the same feelings about MBL.
> ...




Unless you buy AFg "low" then it will be

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 78.6 94.4 106.4 
DPS 44.0 44.0 49.0 53.0 *

thx

MS


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## vishalt (27 October 2007)

The prices you guys are getting these financial stocks at are pretty cheap prices, ofcourse after a drastic shock like that it'll take a while to regain confidence. 

But the time to buy is when there's blood and panic on the streets!


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## Pager (27 October 2007)

I normally only buy for long term holdings during corrections in the overall market, but after doing more research on AFG bought half the parcel im looking for yesterday at $7-80.

My 

Think they may well be overdone, reports say they may have paid too much for Rubicon which may account for the current weakness but its not a done deal and subject to an independent report/valuation by Grant Samuel, The 3 Rubicon property trusts are all trading on or near there lows and have Yields between 9 and 12%.

They have plans for retail infrastructure/property funds similar to Macquarie and B&B and there management have a history of doing well, David Clarke the MD was responsible for turning BT around when Westpac bought it a few years ago.

Directors have also been buying, 4 of them in fact including the MD it was disclosed yesterday, they have a yield of 5.5% and P/E of 11, not so long ago they were over $13, maybe not going to get back there in a hurry but very surprised if in the not so distant future they are not at or above that level.


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## greenfs (27 October 2007)

I have cashed but am now very tempted to follow Pager and 3 Views of A Secret into this stock as it now looks irresistible. I don't think I will wait any longer as to try and pick the very bottom might result in a miss altogether as recently happened with Select Harvest about a week ago.

A 3 month graph is attached and whilst the MACD & DMI indicators are terrible, you can see once it bottoms out it is not hard to accept that given a change in buyer & seller sentiment it will probably once again bounce back to $9 very quickly.


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## Julia (27 October 2007)

greenfs said:


> I have cashed but am now very tempted to follow Pager and 3 Views of A Secret into this stock as it now looks irresistible. I don't think I will wait any longer as to try and pick the very bottom might result in a miss altogether as recently happened with Select Harvest about a week ago.
> 
> A 3 month graph is attached and whilst the MACD & DMI indicators are terrible, you can see once it bottoms out it is not hard to accept that given a change in buyer & seller sentiment it will probably once again bounce back to $9 very quickly.
> 
> View attachment 14505



So are you saying that you will buy this before the buyer/seller sentiment you mention above has in fact turned around?
It looks pretty woeful at present.


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## Pager (27 October 2007)

I m not a big follower of Technicals but do look at price movement in its simplest form and since it made its multiyear lows in August and bounced to $9-50, fell again to around $7-30 or a higher low, bounced again to about $9-75 or a higher high, if Fridays lows of $7-70 hold then I reckon it could very much be in an up trend particularly if it gets past $9-75.

Combined with my previous post, it was worth jumping the gun and buying 50% of the stake I want know as it may well push back and consolidate over $9 in the next few weeks, if im wrong and it falls further to were I was happy to buy for my long term buy and hold then yes ive got in a bit higher than I wanted when averaged out.

Basically ive had a bit each way in public, either way it’s a long term buy for me, if I don’t get my other 50% in the near future im sure at some point I will pick them up, hopefully when there pulling back from $13 or $14 rather than in the next few weeks and lower than now 

Some noteable brokers have a buy on it also with price targets around $10 to $11.

Wish me luck


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## Pager (5 November 2007)

Bought my second parcel today at $7-20 for a long term holding, Citibank amongst others have a $12-70 target on the stock but they do note it may take a while for investors to re-visit the stock partly due to cynicism over the Rubicon deal.

Thought when i said on a previous post i was jumping the gun on half my stake it would be a sure thing it would go to my entry price  and it has !, Murphys law in action again  !    

Out of intrest and curiosity, anyone got a technical view for the longer time frame ?.

Cheers

Pager


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## Ken (5 November 2007)

Chartwise I think AFG is in a lot of trouble.

It has broken long term uptrend.  However you will also notice that around $5.00 AFG has two blue bars which inidacted downside, it also broke the longterm uptrend here. The recovery saw the stock rise from $5 to $10.  

Not saying this is the case here. Chartwise, the shorts are probly going to book some profits, as technically this was a short when the stock broke the long term up trend then failed to go past the long term uptrend after the August 10 meltdown.  We could see $5.00 but the yield on the stock would probly prevent that from happening. 

$7.15 a share. 45 cent dividend.  Looking at over 6% for an investment bank. Whether that says there is risk, or whether that says it is oversold, you be the judge.

Its obvious AFG is the most hardly hit stock out of the investment banks.  

MBL is lucky to be in a trading halt cause I am sure that would be back below $80 if it was trading.


Uncertain times. 

Be greedy when others are fearful, be fearfull when others are greedy.

The market has still has a number of stocks fully priced, is AFG one of those stocks???  Probly not, but the trend is south untill something changes that.


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## Pager (5 November 2007)

Thanks Ken 

I will hold for the long term, timing it just right would be great but at its current levels (will maybe lower tomorrow, next week/month etc) i think its a good entry level.

Some times you get a bargain sometimes you should wait another week or 2 or even another 6 months or more, $7-20 was my entry, i jumped the gun a few days ago so my average cost is $7-50.

time will twll but im on a 5.5% yeild thats 70% franked.


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## Ken (6 November 2007)

Are the dividends sustainable???

Thats the question.

If they are buyers at current levels are guaranteed winners over the long term....


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## drum (6 November 2007)

I also think now is the time to buy. AFG seems oversold in an unloved sector.  The recent rubicon purchase has seen the price fall even further.  

to me under 7.50 is a steal.

Macquarie Research Equities have it as 'outperform':


http://www.egoli.com.au/egoli/egoli...9B42-41DC-9144-1E91AF95F518}&Section=Warrants


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## Ken (6 November 2007)

We have seen what has happened to Citigroup over in the states.

If AFG has similar issues the share price most likely will tank further.

The last time i researched AFG it was about get deals done in the equity markets.

"If" 

Deals slow, or deals are not done than AFG suffers....

I think you will get a chance to buy at these levels for some time.


If your a short term player looking for upside I think your better off sticking with a trend. 

Be cautious of broker reports they have a funny habbit of telling you when to buy, and then telling you to sell after a share price has lost 30-40%.


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## blaze87 (6 November 2007)

personally i think brokers are dodgy..
it's true that they haf similar valuation system like discounted cash flows and such.. but i reckon the market probaby would have discounted it into current pricing. i think if u are a long-term investor, ie 1.5-forever, u would do fine


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## michael_selway (6 November 2007)

Ken said:


> Are the dividends sustainable???
> 
> Thats the question.
> 
> If they are buyers at current levels are guaranteed winners over the long term....




Well it depends what their future earnings are, but it does look like they want to keep it at 50% payout ratio

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 78.6 95.1 107.2 
DPS 44.0 44.0 49.0 53.5 *

thx

MS


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## greenfs (8 November 2007)

I have determined that the time is now right to make a first time entry into this stock as I think that we are very close to the bottom. At least two financial planner groups that I work with are now recommending it as a buy on the strength that the downward movement in the sp has been very much overdone. They are both saying that their respective broking houses reckon it should return back towards $10 once a reversal starts.

Apart from some mistakes made by management, the value fundamentals look good at the current price.

A current graph is provided and I am the first to admit that it tends to indicate that we may not be at the bottom yet. However, given that brokers are now prepared to recommend it as a buy, I think that we should see an upwards movement on the strength of that alone. Time will tell


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## Pager (8 November 2007)

Ive already bought but thought its performance today was very encouraging, with the market taking a beating it recovered pretty quickly from an early sell to be about the only financial stock to go up today even if it was only a cent .


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## greenfs (18 November 2007)

I finally bought a significant parcel at $7.10 last week. 

I note that the stock pick section of the financial pages of the Melbourne Sunday Sun has 2 of 3 brokers recommending AFG as one of only two preferred buy stocks nominated.


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## Ken (18 November 2007)

The concern for AFG shareholders is the amount of debt that they carry.

This is what I was told by a broker.

However if they meet forecast then the yield is attractive and the EPS growth also says its good value.

Whether or not this credit crunch effects there operations is yet to be seen.

Macquarie bank would appear the preferred choice of investment banks along with BNB.


It is undervalued by sentiment in the sector is the issue.


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## greenfs (19 November 2007)

It is highly probable that this stock will shortly be successful at receiving another order for some planes under an operating lease from Qantas


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## EZZA (19 November 2007)

i'm in at 7.19, bargain imo at a pe of 10.

seems to be holding the 7.00 mark.  sold off my bnb for afg hope i made the right call


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## golfmos123 (19 November 2007)

I'm with you Ezza,

Have also topped up today at low 7's.   Unfortunately I first bought in when the stock was in the 11's!!  But I still believe in the stock and now is the right time to average down for me.  I guess I still can't believe I didn't bail earlier but time will tell.  This isn't a short term holding for me and it seems one of the few around with some true value there.


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## michael_selway (19 November 2007)

Pager said:


> Bought my second parcel today at $7-20 for a long term holding, Citibank amongst others have a $12-70 target on the stock but they do note it may take a while for investors to re-visit the stock partly due to cynicism over the Rubicon deal.
> 
> Thought when i said on a previous post i was jumping the gun on half my stake it would be a sure thing it would go to my entry price  and it has !, Murphys law in action again  !
> 
> ...




Its a a good entry in the low 7's one would think

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 78.6 95.1 107.2 
DPS 44.0 44.0 49.0 53.5 *



> Date: 13/11/2007
> Author: Paddy Manning
> Source: The Australian Financial Review --- Page: 53
> Allco Finance Group has defended related party transactions with Rubicon AssetManagement. Rubicon was formed in 2001, mainly funded by loans from RecordInvestments, which is managed by Allco. Record Investments managed Record RealtyTrust, which merged with Allco in 2006. Gordon Fell, of Rubicon, is on theboards of Allco and Record Investments. The buy-out of Rubicon has beencriticised because executives will gain more benefit than shareholders


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## tronic72 (23 November 2007)

*Looking at AFG as a current buy*

Looking to buy AFG. I think it's currently an undervalued stock but I don't know enough about it. The company looks like it has a good footing but the board hasn't be too great. I've also noticed many members have been burnt (this is often my reason for jumping in)

I hope the mods don't see this as Spamming as I've already had a warning and am not 100% sure why. I'm a new member so I'm happy to be told "what's what"

Thanks.


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## professor_frink (23 November 2007)

*Re: Looking at AFG as a current buy*



tronic72 said:


> Looking to buy AFG. I think it's currently an undervalued stock but I don't know enough about it. The company looks like it has a good footing but the board hasn't be too great. I've also noticed many members have been burnt (this is often my reason for jumping in)
> 
> I hope the mods don't see this as Spamming as I've already had a warning and am not 100% sure why. I'm a new member so I'm happy to be told "what's what"
> 
> Thanks.




I've moved this to the AFG thread.

In the future, it would be good if you could do a search to see if there is already a thread on a company you want to talk about, and if there is, then could you post in the relevant thread please.

Tronic, you didn't get a warning about spamming. Check you PM box, and read the message again. You were asked for information after you called a company a good buy without giving any reasoning, and then preceded to go on the attack instead of providing some.


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## tronic72 (23 November 2007)

*Re: Looking at AFG as a current buy*



professor_frink said:


> I've moved this to the AFG thread.
> 
> In the future, it would be good if you could do a search to see if there is already a thread on a company you want to talk about, and if there is, then could you post in the relevant thread please.
> 
> Tronic, you didn't get a warning about spamming. Check you PM box, and read the message again. You were asked for information after you called a company a good buy without giving any reasoning, and then preceded to go on the attack instead of providing some.




Hi Fink,

It's form of SPAMMING. I'd forgotten what it was called. I deleted the E-mail can you remind me the name of it. I'm new and I don't want to tread on peoples toes.

Thanks


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## professor_frink (23 November 2007)

*Re: Looking at AFG as a current buy*

_"Hi Fink,

It's form of SPAMMING. I'd forgotten what it was called. I deleted the E-mail can you remind me the name of it. I'm new and I don't want to tread on peoples toes.

Thanks"_


Check your PM box. I've re sent it.


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## Pager (23 November 2007)

*Re: Looking at AFG as a current buy*



tronic72 said:


> Looking to buy AFG. I think it's currently an undervalued stock but I don't know enough about it. The company looks like it has a good footing but the board hasn't be too great. I've also noticed many members have been burnt (this is often my reason for jumping in)




My average cost is $7-50 so yes im behind, in the long term I think they will do very well, they're a well run company, many brokers have price targets of over $12 on them, not that that is any guarantee they will get there.

There are worries about its purchase of Rubicon and also the credit problems in the US aren’t helping, AFG have stated more than once they have no exposure to sub prime or issues relating to credit but sentiment is against them so until that cloud has passed I wouldn’t expect any kind of rapid upwards movement.

I’m holding for the long term and would have been nice to pick them up cheaper but that’s life, happy to hold.

The whole sector has taken a hit with credit concerns etc and who knows another few weeks and they may all be cheaper still, have taken the opportunity though to top up my stake in Macquarie and bought PTM below its $5 IPO price, remember the scrum when that listed at a massive premium only a few months ago.


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## tronic72 (23 November 2007)

Hi Pager,

Thanks. Just purchased at 6.7 which I think is a really nice price. This is the kind of company buyers will look at when the shine starts to come of the commodities.

IMHO.

Thanks again.


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## michael_selway (24 November 2007)

*Re: Looking at AFG as a current buy*



Pager said:


> My average cost is $7-50 so yes im behind, in the long term I think they will do very well, they're a well run company, many brokers have price targets of over $12 on them, not that that is any guarantee they will get there.
> 
> There are worries about its purchase of Rubicon and also the credit problems in the US aren’t helping, AFG have stated more than once they have no exposure to sub prime or issues relating to credit but sentiment is against them so until that cloud has passed I wouldn’t expect any kind of rapid upwards movement.
> 
> ...




Do you reckon it will be a takeover tarket?

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 78.6 95.1 107.2 
DPS 44.0 44.0 49.0 53.5 *

thx

MS


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## 3MT (27 November 2007)

Took interest in this stock when Citigroup mentioned that this is a very mis-understood company and as a result very underpriced compared to its peers.

I have been waiting patiently and at the same time trying to get a grip on the business (I still don't quite understand the business to the level where I am comfortable to invest in it -- too much leverage all over the place is confusing to me)

Hence any entry for me would be purely from a technical point of view and as Reece and others have mentioned, its not the right time to enter even though my gut feel is it must surely be good value at these levels with directors buying into the company at much higher levels.


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## tronic72 (27 November 2007)

Hi 3MT,

I'd actually purchased late last week and have now purchased another two parcels of AFG. Today's Citigroup announcement has been the shot in the arm Allco needed to turn around their share price.

See link: http://biz.yahoo.com/ap/071126/citigroup_abu_dhabi.html

I'm almost certain this morning saw the lowest prices for this stock, so any further waiting will simply cost more. IMHO, Unless another Google comes along, I'll be keeping these shares long term as I believe they represent superb value.

I'm already up over 4% on the third parcel I purchased today after hearing the news!

Thanks for the news 3MT, I haven't read that comment by CitiGroup, but it confirms my belief in the value and potential of this stock at current prices. Out of interest, where did you read the comment by Citigroup? I'd be interested to have a look at the article if it's still current. 



If this afternoon is any gauge, I foresee very nice gains in both the short term and long term for Allco.


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## tronic72 (27 November 2007)

*Re: Looking at AFG as a current buy*



michael_selway said:


> Do you reckon it will be a takeover tarket?
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...





I'd say no.

Due to the fact that the company has yet to integrate it's recent acquisitions to show that their purchase was in fact good value and that they have been able to ad value to the sum of the parts by joining them together.

Clear as mud?


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## 3MT (28 November 2007)

I hope you are right Tronic. I'd like to see you folks make $.

I subscribe to various newsletters and one of them issues broker reports that come out each day. I try to look for a consensus or identify a good call and then do further research on my own to see if its worth my while. Then I wait patiently   Call me a conservative, but I've been in the game for too long (ie. made lots of bad calls before)

I think that AFG comment came out last week some time from memory.

I am still bearish about financial stocks in general. I think there are better opportunities elsewhere at this stage (resources, infrastructure, health), but if I had to consider a financial stock, NAB (following the brokers here) and AFG would be my preferences.


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## tronic72 (28 November 2007)

3MT said:


> I hope you are right Tronic. I'd like to see you folks make $.
> 
> I subscribe to various newsletters and one of them issues broker reports that come out each day. I try to look for a consensus or identify a good call and then do further research on my own to see if its worth my while. Then I wait patiently   Call me a conservative, but I've been in the game for too long (ie. made lots of bad calls before)
> 
> ...




Thanks 3MT,

Another 2% up when the market is going backwards, so it's all good at the moment. 

I'm also quite conservative. After all it's money! I try and find companies at the bottom of a downward trend that the Market has been overlooking. I'm hoping this is the situation for Allco.

Time will tell.

T


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## bewick (6 December 2007)

UBS Investment Research
Allco Finance Group Limited
A FG pays up for Rubicon
 Proposed acquisition of Rubicon – EGM set for 12 December
AFG has announced that (subject to shareholder approval) it will purchase the 80%
of Rubicon it does not own for up to $328m via cash and scrip. This is a related
party transaction given David Coe (AFG’s Executive Chairman) owns 20% and
Gordon Fell (AFG Non-Exec Director) owns 45% of Rubicon. Strategically this
boosts AFG’s Real Estate AUM from $3.9b to $9.1b, increases geographical reach
and its origination capability. This helps accelerates its business transformation.
 However, the price paid looks large.
In conjunction with our Real Estate team, we estimate Rubicon’s NPAT could fall
from $35m in FY07 to $12m in FY08E (see within). This is a result of substantial
transaction fees in prior years that management stated are unlikely to re-occur. This
implies AFG is paying a “base case” 35x FY08 (7.9% of AUM) for Rubicon.
 Wholesale funds must be raised or this deal could be 5% EPS dilutive.
To make this deal work AFG must raise c$2b in new AUM p.a. primarily from the
wholesale markets (consistent with pref share hurdles). Otherwise, given falling
base case Rubicon NPAT this deal to be up to 5% EPS dilutive to AFG in the first
full year. AFG is also acquiring more underperforming funds that will be subject to
a strategic review. A potential merger of RRT, RAT, REU & RJT could help.
 Valuation: Reduce Price Target by $1 to $11.50.
We have reduced our SOTP-based PT to $11.50. This implies a 12% discount to
the Asset Originator peers (BNB, MBL & CFG). While we see upside from AFG’s
business transformation, it needs to demonstrate an greater ability to raise
wholesale funds
ab
Allco Finance Group Limited 23 October 2007
UBS 2
Details of the proposed acquisition of Rubicon
AFG has proposed to acquire the remaining 79.6% of Rubicon Holdings
Australia Limited that it does not already own, subject to the approval of
shareholder at an EGM on 12 December 2007. Total consideration paid is
expected to be around $328m comprising:
 $63.7m in Cash.
 23.9m new ordinary shares in AFG.
 5.8m converting redeemable preference shares which will automatically
reclassify into AFG ordinary shares if certain targets are met (based on
targeted AUM growth of 20% p.a.).
Summary of Rubicon
Rubicon is a global real estate asset manager. It currently has approximately
$5.6b in Assets Under Management (AUM). These assets are held
predominantly through three listed Australian Property Trusts: Rubicon America
Trust (RAT); Rubicon Europe Trust (REU) and Rubicon Japan Trust (RJT).
Rubicon currently owns between 9-12% of each of these trusts.
Rubicon currently has 44 employees of which 18 are located outside Australia.
Approximately half of its employees are in origination and financing.
Rubicon is currently ownership structure
A potential criticism of this transaction is the very close ties between AFG and
Rubicon. The current ownership structure of Rubicon is:
 20.4% - AFG
 19.9% - David Coe (Executive Chairman of AFG)
 44.9% - Gordon Fell (Non-Executive Director of AFG. To become
Executive Chairman of AFG’s Real Estate Division post completion).
 14.8% - Matthew Cooper (COO of Rubicon. To join AFG post completion).
Following this transaction the staff ownership of AFG will rise from
approximately 41% to 46%.
Strategic rationale
We believe that AFG has entered this transaction to increase its scale and
capability within the Real Estate sector. This forms a key component to the roll
out of its funds management platform across its key asset classes (transportation
assets, infrastructure, property and financial assets).
The combination of AFG’s existing property business with Rubicon
substantially increases the size of this business and its importance to AFG. Total
AUM will rise from $3.9b to around $9.2b. Geographic diversification is also
increased. In addition, this acquisition increases the capability of AFG’s
acquisition team, with staff rising from 53 to 97 people.
AFG’s real estate portfolio will now include five listed vehicles and one
wholesale fund following the completion of the Rubicon deal.
Allco Finance Group Limited 23 October 2007
UBS 3
Financial Impact Less Attractive
Forecasting future earnings of Rubicon is difficult as highlighted in
management’s decision not to provide any earnings guidance. As a result, we
have conservatively modelled our expected earnings for Rubicon in conjunction
with our Real Estate Team.
Table 1: Estimated Rubicon “Base Case” NPAT (A$m)
2007 2007 "Normalised" 2008E
Co-investment Income (distributions) 14.1
Management Fees 22.5
Sub-Total Recurring Income 16.4 38.7 36.6
Advisory & Transaction Fees 15.0 54.0 10.0
Total Revenue 31.4 92.7 46.6
Expenses -10.0 -22.0 -13.0
Financing Costs -13.9 -16.0 -16.0
Share of Associates 0.6 0.0 0.0
Profit Before Tax 8.1 54.7 17.5
Income Tax -2.5 -19.4 -5.6
NPAT 5.6 35.3 11.9
Spot AUM 3,800 5,230 5,230
Average FUM (est) 2,975 4,753 5,230
Recurring Income to Ave AUM (bp) 55 81 70
Cost to Income Ratio (%) 31.8 23.7 28.0
Effective Tax Rate (%) 30.9 35.5 32.0
Source: Company date, UBS estimates
We estimate that Rubicon’s earnings could fall sharply during FY08 from
$35.3m to around $11.9m. This “base case” is a result of:.
FY07 “Normalised” NPAT was boosted by substantial Advisory and
Transaction fees, primarily related to the listing of RJT. During the conference
call, management stated that it would be “unusual for these to re-occur”. As a
result, we estimate that Rubicon could generate around $10m in Advisory and
Transaction fees during FY08, down from $54m in FY07. This assumes that
there are no new IPO’s or substantial capital raisings over the next year.
We have assumed that expenses fall substantially in FY08 as bonus payments
are likely to come back. We have assumed a 32% cost to income ratio.
Financing Costs were highlighted as a potential area of potential savings to
Rubicon as they move onto AFG’s balance sheet. Previously AFG had provided
Rubicon with warehouse funding and a merged entity would have a cheaper cost
of capital. However, funding savings to Rubicon would be lost revenue to AFG
with any benefit eliminated on consolidation. As a result we see no net impact.
We have also assumed that Rubicon’s AUM remains flat over the next year.
Management have stated that Rubicon will not raise new funds within its
vehicles until the share prices are trading above NTA. At present its three listed
Allco Finance Group Limited 23 October 2007
UBS 4
funds are trading at discounts to NTA of between 11-27%. Given current market
conditions and previous track record, we believe that an IPO of a new LPT
would also be difficult for Rubicon. As a result, Rubicon must look to wholesale
funds as a new source of capital.
Implied Price Paid for Rubicon
Given our estimate of stand alone NPAT for Rubicon of $11.9m, we estimate
that AFG is paying a “base case” of around 34.6x FY08E for the business. This
also implies around 7.9% of AUM. We believe that this is fully priced.
EPS Impact of the acquisition of Rubicon
Given our conservative “base case” forecasts for Rubicon’s earnings prospects
in FY08, we believe that this transaction could potentially be around 5% EPS
dilutive to AFG during the first full year.
Table 2: EPS Impact of “Base Case” Rubicon on AFG during the First Full Year (A$m)
FY08
AFG NPAT 277.4
Rubicon NPAT 11.9
Cost Synergies 1.0
Funding Cost on Cash Paid to Rubicon Shareholders -4.5
NPAT Post Transaction 285.9


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## tronic72 (6 December 2007)

Bewick,

I don't mean to be rude, but I'm not sure why you posted that information as it's quite old now. Am I missing something? (I read it twice)


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## tronic72 (19 December 2007)

Allco reassures investors of stability
Wednesday December 19, 2007, 9:02 am
Allco Finance Group (Allco) has become the latest investment company to assure investors that it is financially stable.

In the wake of the US-based subprime crisis, and the collapse of securities in Centro Properties Group over the last two days, Allco says its current funding facilities are sourced domestically, and it's not directly reliant on financing or refinancing in the US debt markets.

In a statement to the Australian stock exchange, Allco outlined its debt facilities, including three facilities ranging between $250 million and $900 million maturing between May 2008 and November 2012.

Allco said it had cash and undrawn capacity under these senior facilities of $314 million.

At June 30, 2007, Allco said, shareholders' funds totalled $2.2 billion.

Its gearing ratio was approximately 35 per cent.

Allco said the total debt on its balance sheet was $6.1 billion at June 30, of which $5.5 billion had limited recourse against the specific assets which it financed.

"We actively manage our business in the context of our available funding facilities and current transactions have committed bank funding in place, together with sufficient capacity under Allco's above facilities to fund Allco's investments," the company said.

NOTE: Currently holding AFG as of yesterday


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## waz (19 December 2007)

UBS has downgraded AFG from Buy to Hold, with a nice round figure of $6.00

They think its too complex to asses a target price, which you could say about any company that uses gearing as a way of making money.

UBS may aswell rate the entire sharemarket as a hold.


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## tronic72 (19 December 2007)

waz said:


> UBS has downgraded AFG from Buy to Hold, with a nice round figure of $6.00
> 
> They think its too complex to asses a target price, which you could say about any company that uses gearing as a way of making money.
> 
> UBS may aswell rate the entire sharemarket as a hold.




Let me first say, I purchased AFG today.

Let me secondly say. After this recommendation, I'll never read anything that comes from UBS. I mean, come off it! Where did they get $6 from? I agree with Waz, it's far too neat, this is the exact same company that the likes of UBS were recently recommending as a buy. Nothing has changed. If Allco has a fault, it's their lack of transparency to the Market. But they've recently, on numerous occassions reassured the Market that the Sub-Prime issue will have little effect on them. Only today they've reiterated that they get their finance from the much more secure Australian Banks.

Even though the price has dived I'm still happy with my purchase. Find an similar company with a P/E Ratio that's within a 1000 miles of AFG. If anyone else can find a company for $5.50 with a divided of .44 then please tell me so I can buy it.

PS. Did UBS actually say they couldn't calculate target price or where you just taking the pi$$. I assumed it was the later


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## waz (19 December 2007)

Yes, UBS said it was too complex to asses a target price.

Which pretty much means giving up (Not on the company, but on UBS ability to analyse the company). Even before they had a nice round target price of $9.00


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## tronic72 (19 December 2007)

waz said:


> Yes, UBS said it was too complex to asses a target price.
> 
> Which pretty much means giving up (Not on the company, but on UBS ability to analyse the company). Even before they had a nice round target price of $9.00




I thought that was the case. 

What a waist of time that review is then. I find it bizarre they presume to know enough to revalue the company but not enough to value it accuratly. Like you,  I find it a litte bit too tidy they picked $6. I suppose if Zinifex was in the same boat as Centro, UBS would knock a third of the value of BHP.


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## michael_selway (19 December 2007)

waz said:


> Yes, UBS said it was too complex to asses a target price.
> 
> Which pretty much means giving up (Not on the company, but on UBS ability to analyse the company). Even before they had a nice round target price of $9.00




Hm interesting, basically they are assuming no growth in EPS in the next few years for the $6 target

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 73.8 87.4 101.9 
DPS 44.0 44.0 48.0 53.0 *




> Date: 19/12/2007
> Author: Stuart Washington
> Source: The West Australian --- Page: 53
> The ASX 200 dropped by 156 points on 18 December 2007, as Australian investorsmoved away from stocks with complex debt structures. The liquidity crisis hasprompted investors to seek simple, transparent stocks. Allco Finance Group andAsciano were among the companies to suffer share price drops on 18 December,with Allco closing down $A0.58 to $A5.88 and Asciano ending the day $A0.40lower. Credit Suisse's Adnan Kucukalic says infrastructure and utilitiesstocks are most at risk


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## tronic72 (19 December 2007)

michael_selway said:


> Hm interesting, basically they are assuming no growth in EPS in the next few years for the $6 target
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Hi Michael,

Just read your post and I'm not sure what it is you are saying. Are you saying that the UBS review assumed ZERO EPS growth? How does that coindincide with the figures you posted? 

Sorry, I just wanted to confirm what you were trying to say.


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## reece55 (19 December 2007)

Good ole Allco continues it's decline....... 

And I continue telling everyone around me the same story:

1). Can you understand their corporate structure sufficiently to say they aren't hiding their debt (cause I can tell you that there is an awful lot of investments in associate entities that they aren't consolidating that doesn't count in their "reported debt", as well as complex other unlisted security structures).

2). Do they have a related party issue (have a look at the latest Rubicon transaction, perfect example)?

3). How are their satellite funds performing? Is their business model succeeding or failing (I would say the later)?

4). What is the true value of the investments they have in debt instruments, leases etc. that are high yielding?

Buffet has a very sensible rule in value investing that I think everyone should consider - if you don't understand it, don't invest in it....... I think even the most informed adviser/accountant wouldn't really understand this business because their isn't sufficient disclosure to make the assessment. I actually agree with UBS here.

However, bar that, look at the chart - is this an uptrend or a downtrend - it doesn't take genius to figure it out........

Cheers
Reece


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## michael_selway (20 December 2007)

tronic72 said:


> Hi Michael,
> 
> Just read your post and I'm not sure what it is you are saying. Are you saying that the UBS review assumed ZERO EPS growth? How does that coindincide with the figures you posted?
> 
> Sorry, I just wanted to confirm what you were trying to say.




Hi those numbers were old consesus forecasts

But today UBS gave new $6 target based on their own new forecast EPS

So one could guess UBS are expecting no growth from the 2007 actual EPS of 63.9c for the next few years etc

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 73.8 87.4 101.9 
DPS 44.0 44.0 48.0 53.0 *

thx

MS


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## tronic72 (20 December 2007)

AFG up over 6.5%. Totally oversold IMHO. As Micheal Pacoe said yesterday the likes of AFG have had their share price stashed buy simply being in the same game as Centro. As I said yesterday, if Zinifex was on the ropes, would that give cause for BHP to have their target price slashed by a third?

I tend to agree with Reece's sentiments but I guess I'm a bit less involved in the shares I trade. I know nothing about making steel but that doesn't stop me looking at BHP. I also failed science in year ten but that doesn't mean I'm not going to look at biostocks. Don't get me wrong, I DO look at P/E ratios, cashflow, debt ratios etc but I simply don't have the time to digest every company I buy because I often sell it within a few days. I use companies like Aspect Huntly, GS and UBS (until recently) to give me an idea of a companies current state. Those guys have teams of analysts working on reports which they provide in a simple format (let them do the work I say).

Anyway, AFG are bucking the market today, so I'm happy. Doesn't mean it won't all go belly up tomorrow though.


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## DowJones (26 December 2007)

The current price of AFG is $6.10 

I hold 750 share that I bought a few months back at 7.81 (should have sold 3 weeks ago when it was 7.92).

They look like a smaller version of Babcock and Brown - doing infrastucture and asset acquisations. AFG got sold off due to the risk that they are exposed to the US subprime and "recession".

What are people's view on this stock? Is it a good idea to average down on Allco? Or should I be scared as there are more subprime shoes to fall!


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## runningrugby (27 December 2007)

DowJones said:


> The current price of AFG is $6.10
> 
> I hold 750 share that I bought a few months back at 7.81 (should have sold 3 weeks ago when it was 7.92).
> 
> ...




My gut feeling is that the share is oversold. Why??
As previously mentioned by other posters, these type of shares will attract attention when the shine comes off commodities in mid to late 2008. 
I have spent countless hours watching Bloomberg and CNBC to get my ahead the sub prime issues. 

The problems are real but can be overcome.

The fear factor has been currently built into the share price due to the 'sub slime' mortagage crisis. Although I would expect the market volatility to continue for the next 4 to 6 months, I think the US is on track to ride out the current problems. The capital injections will mean that no US bank should fall over. 

Investors will flood back into the market once these problems are out the way. I am expecting a massive rally in financial stocks in America once the sub prime problems are out the way. AFG and other stocks will benefit from this rally. There is literally trillions on the sidelines waiting for the bottom. 

Buffet was on Bloomberg last night talking about his recent acquisition. They asked him if any of the banks had approached him about investing some funds. He replied "Yes". He said that he wasn't interested at the moment but is waiting for the bottom. I got the impression even he didn't fully understand the sub prime crisis. 

I do not hold AFG but have it on my watchlist!!


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## tronic72 (27 December 2007)

DowJones said:


> The current price of AFG is $6.10
> 
> I hold 750 share that I bought a few months back at 7.81 (should have sold 3 weeks ago when it was 7.92).
> 
> ...




I hold 10K worth which I've recently purchased at $5.95. I'd recently purchased another 10K worth at 6.5 and sold them at close to 7.5. I don't doubt they will come back over that price again once the Markets fear subsides. If they can reduce their debt ratio punters will look at them much more favourably.

The stock has taken a pounding for three reasons.
1. The QANTAS deal failed
2. The market thinks that they paid a premium price for Rubicon. No one has said they paid to much, just a premium price and keep in mind they already own part of it!
3. The Sub Prime issue

IMHO, none of these are huge issues but combined they've made punters nervous. They do have a high debt ratio, but keep in mind they have a heap of premium clients, under contract that are servicing the debt with enough cream left for a healthy profit.

I agree 100% with "Runningrugby" that these type of shares will start to come back in favour as the shine starts to come of commodities. I'm not saying I don't hold commodities, I'm just trying to hedge my bets. You only have to look at the ASF to see how heavy many members are on commodities.

I'd be buying back at anything under 6.

My 2c


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## prana (3 January 2008)

Putting this, and other similar stocks in this sector back into focus. Some good projects recently, and new funds up in the Asian space by Allco - hopefully to eventuate into listed assets. This is looking a lot like Babcock and Brown's trusts. This should bring some good refereshments to the earnings this year, hopefully a bumper year. I'd like to see earnings topple estimates like last time, so that PE is trading below 5. 

Charts!!! boy don't they look nasty.  :


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## tronic72 (4 January 2008)

Another nice bit of news for Allco share holders or those looking to buy into AFG.

"Kieren Chidgey, an analyst at Merrill Lynch & Co. in Sydney, on Dec. 5 rated Allco a ``buy,'' saying the shares had fallen too far on the shakeout in global credit markets."

For the complete article: http://www.bloomberg.com/apps/news?pid=20601080&sid=aG37ALwMw6sI&refer=asia


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## thevadd (4 January 2008)

This was an old NEWS : It was published on 30 Dec 2007 Since then the share price has dropped to 5.93


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## tronic72 (4 January 2008)

thevadd said:


> This was an old NEWS : It was published on 30 Dec 2007 Since then the share price has dropped to 5.93




Um are you serious???? It's 5 days old!!! The market has also dropped. Not sure what your point is, or if you even have one.

I think a self professed "newbie" should be less of a smart @$$, especially given two of your 3 posts asked questions that a year 10 econimic student should know.

"Could you pl explain what is POG ? what is the ratio POG/LGL ? Sorry I am a newbie"
"When you put a stop loss, do you put guaranteed stop loss?"


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## thevadd (4 January 2008)

With the kind of good news, as you mentioned, wouldn’t you expect the share price to  edge up? This is common sense  , a fellow senior member . What is ‘self professed newbie’ got to do with a forum where anyone can share their views/ideas ?


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## prana (5 January 2008)

come'n guys, we're all in on the same game - lets get along. Although I get the impression thevadd is a trader, and tronic is more of a longer term position holder - sorry if I'm wrong on either or both counts - n00b to this board myself.

Monday may be a massive down day....


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## BraceFace (12 January 2008)

At current prices (low $5), this makes compelling buying with a long term view.
Paying a healthy dividend, mostly franked from memory, and arguably well oversold on the back of credit crunch paranoia.

I have been buying parcels of this since it was $11.00 pre subprime.
I realise it is risky trying "pick the bottom" but you would think that a rebound up to around $7.00 as per last month might be on the cards when the buyers return to the market.

This is not one for the faint hearted, that's for sure.


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## Agentm (12 January 2008)

BraceFace said:


> At current prices (low $5), this makes compelling buying with a long term view.
> Paying a healthy dividend, mostly franked from memory, and arguably well oversold on the back of credit crunch paranoia.
> 
> I have been buying parcels of this since it was $11.00 pre subprime.
> ...





heavily shorted and solid management..

its a great buy in that sense, but as with many stocks, feeling the pressure of a volatile market..


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## Julia (12 January 2008)

tronic72 said:


> Another nice bit of news for Allco share holders or those looking to buy into AFG.
> 
> "Kieren Chidgey, an analyst at Merrill Lynch & Co. in Sydney, on Dec. 5 rated Allco a ``buy,'' saying the shares had fallen too far on the shakeout in global credit markets."
> 
> For the complete article: http://www.bloomberg.com/apps/news?pid=20601080&sid=aG37ALwMw6sI&refer=asia




I'm not necessarily saying it's the case with the Merrill analyst, but how often do you see an analyst issuing a Buy recommendation simply because the price has dropped from when they had it on a Hold?  Not a good enough reason to buy anything in the current conditions imo.


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## resourceboom (13 January 2008)

Agentm said:


> heavily shorted and solid management..
> 
> its a great buy in that sense, but as with many stocks, feeling the pressure of a volatile market..




Hi Agentm, I heard management at AFG were a bit dodge!! 
lol, only joking... 

They have been hammered by the short term negativity in the market with recession and subprime issues. But hopefully in 5 or 10 years time my SMSF AFG stock will be well and truly in the green!


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## tronic72 (14 January 2008)

I just purchased a 4.95. I can't believe I recently (around 1 month ago) sold another parcel for 7.5 which I'd purchased for 6.5. This has been a great share for me as it seems to bounce back half the amount it falls so I buy after a 10% fall and sell the next day with a 5% gain.

At this price I'll be holding onto these longer term as I'm fairly certain that AFG will bounce back in a big way upon it's next bit of positive news.

Also bought SDL at .295 which I'd recently sold at .45! Fingers crossed we'll have a bit of short term stability so the market can correct it's self.


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## waz (21 January 2008)

Whats the deal here?????

Massive drop today but I cant find any news, broker forcasts or figures released today.

Dropped to below 3.48 

Now it looks like mqg and bnb are starting to fall to just becasue of AFG.


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## tronic72 (21 January 2008)

I recently sold all my holdings of AFG as it was getting to risky. Interestingly, I had a piece of paper with todays stock picks that I listed for todays trading and AFG was on it but I scribbled it out at the last minute as I was a bit nervous about the stock.

Could AFG be another Centro???


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## waz (21 January 2008)

Could AFG be another Centro???

I think thats the only fear with AFG. Although I doubt it could be another Centro. Yes it paying too much for Rubicon, but is it a done deal as yet???

I think they already tried to reduce the price paid. Can they do it again.

AFG has been very quiet with its announcements lately, that could either be a good or bad thing.

Also if anything bad does happen to AFG, how will it affect its competitors BNB and MQG. Long term it would be good.


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## DowJones (21 January 2008)

There was negative press on Allco Finance Group from the Australian Financial Review. Their debt is the worry and they need to convince investors of their complex deal making.


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## agro (21 January 2008)

yes they claim they don't have any subprime exposure but imo i don't trust them..

may be worth day trading because if it goes down 27% without an ann it just goes to show another top cat selling down his stake


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## tronic72 (21 January 2008)

"yes they claim they don't have any subprime exposure but imo i don't trust them.."

I tend to agree at the moment. My thinking is if they had nothing to hide they'd open their selves up for full exposure to the Market. I've held them on an off for the past 12 months but recently they seem to have slipped of the face of the earth, (PR wise). For a company thats taking so much of a hiding, management is doing a crappy job of elaying the fears the market has.

The icing on the cake for me was that they didn't say who the major backer was for their recent fund. I suspect it was one of their own divisions.


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## tronic72 (21 January 2008)

"I think thats the only fear with AFG. Although I doubt it could be another Centro. Yes it paying too much for Rubicon, but is it a done deal as yet???

I think they already tried to reduce the price paid. Can they do it again."
Waz,

The Rubicon deal is completed. Was finished nearly a month ago. 

I'm right with you regarding MQG & BNB. Have been buying up both for long term although my BNB are getting a hiding today. I assume it's because of the fear the AFG/CENTRO drop is putting on similar stocks.


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## Broadside (21 January 2008)

bought today at close...people are jumping at shadows.  A massive drop today on the back of the AFR opinion piece?  this market is becoming a joke!



Oversold imo.


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## YELNATS (21 January 2008)

Broadside said:


> bought today at close...people are jumping at shadows.  A massive drop today on the back of the AFR opinion piece?  this market is becoming a joke!
> 
> 
> 
> Oversold imo.




I tend to agree. If you read their recent announcements, they very clearly state they have zero or next to zero exposure to the US subprime crisis and outline their immediate future funding commitments. 

Should these announcements be found to be false or misleading, AFG's directors and management would be jeopardising their credibility and careers, something I don't believe they would willingly do.

As I holder, sure I'm disappointed by the retreat in price, but I'm not selling out just to crystallise a loss.


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## Aussie2Aussie (21 January 2008)

YELNATS said:


> AFG's directors and management would be jeopardising their credibility and careers, something I don't believe they would willingly do.






Sorry could'nt help myself.

Heaven forbid that a bunch of directors/managers were not keeping their eyes on a business that they were charged with looking after.


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## Broadside (21 January 2008)

Aussie2Aussie said:


> Sorry could'nt help myself.
> 
> Heaven forbid that a bunch of directors/managers were not keeping their eyes on a business that they were charged with looking after.




Directors and mgt own a large chunk of this stock...they will be guarding their wealth very closely...interests are aligned with ours.


----------



## Go Fast (21 January 2008)

What about how the speeding ticket was issued at 11am this morning and they took until 3.50pm to respond to it? surely a 25% drop in their share price should be of concern to directors - enough to inform the market at least.


----------



## runningrugby (21 January 2008)

Broadside said:


> bought today at close...people are jumping at shadows.  A massive drop today on the back of the AFR opinion piece?  this market is becoming a joke!
> 
> 
> 
> Oversold imo.




Just another example of wealth transferring from the impatient to the patient.
That's all the stock market is these days. The amount of borrowed money in the market has increased substantially in Australia since the property boom (ie people have been able to borrow against the value of their residential property). The borrowed money can disappear pretty quickly when the bank rings up. Its a worry but its part of modern day investing. Welcome to the wonderful world of margin loans. I now hold AFG but do so with my own funds!! I know a guy who owns more shares than me but can afford to renew his membership at the Gym for $299.00 for 6 months. Easy credit is not only a problem in the US, its a problem in Australia as we speak.....


----------



## Garpal Gumnut (21 January 2008)

Broadside said:


> Directors and mgt own a large chunk of this stock...they will be guarding their wealth very closely...interests are aligned with ours.





What is your evidence that directors and management owning large chunks of stock have their interests aligned with shareholders. Its an interesting concept but I'd appreciate you expanding on it, especially when a stock may be about to go down the gurgler, or conversely leap in price,  on information undisclosed to the wider market. 

gg


----------



## Broadside (21 January 2008)

Garpal Gumnut said:


> What is your evidence that directors and management owning large chunks of stock have their interests aligned with shareholders. Its an interesting concept but I'd appreciate you expanding on it, especially when a stock may be about to go down the gurgler, or conversely leap in price,  on information undisclosed to the wider market.
> 
> gg




their interests are aligned as fellow equity holders, not just employees...all directors and management talk of building shareholder wealth but many only have nominal holdings and basically just draw a salary...I am happy to see directors and management with large stakes putting their money where their mouth is....because there is less "slippage" between what they want and what I want.

Fair enough?

PS what happened today was a knee jerk reaction to the AFR article, wiped $750m off the market cap...even the article itself doesn't refer to "going down the gurgler".  Investors are spooked but that creates opportunities for those who keep a clear head.


----------



## Aussie2Aussie (21 January 2008)

Broadside said:


> their interests are aligned as fellow equity holders, not just employees...all directors and management talk of building shareholder wealth but many only have nominal holdings and basically just draw a salary...I am happy to see directors and management with large stakes putting their money where their mouth is....because there is less "slippage" between what they want and what I want.





Stop it, your killing me!!

Where on earth are you getting this from? I am not saying Allco is going broke, but I have never read such drivel, from someone who appears to believe it, before in my life.


----------



## Broadside (21 January 2008)

Aussie2Aussie said:


> Stop it, your killing me!!
> 
> Where on earth are you getting this from? I am not saying Allco is going broke, but I have never read such drivel, from someone who appears to believe it, before in my life.




excuse me? the previous poster asked why I thought it was good they held a large equity stake....rather than taking pot shots at me for having my say why don't you tell me why it's drivel??

Or do you prefer to invest in companies where management / directors have negligible equity?


----------



## 3MT (21 January 2008)

I think the current sentiment and market conditions have turned many of us good intentioners into comical cynics.


----------



## Aussie2Aussie (21 January 2008)

Broadside said:


> excuse me? the previous poster asked why I thought it was good they held a large equity stake....rather than taking pot shots at me for having my say why don't you tell me why it's drivel??
> 
> Or do you prefer to invest in companies where management / directors have negligible equity?




Please, please show me one company that does not have directors, that have a direct or indirect shareholding. Counts for nothing.

I will start a list for you of better known corporate failures that fall into that category:

FAI 
HIH
AWA
OneTel
...........this is where you can start.


----------



## Broadside (21 January 2008)

Aussie2Aussie said:


> Please, please show me one company that does not have directors, that have a direct or indirect shareholding. Counts for nothing.
> 
> I will start a list for you of better known corporate failures that fall into that category:
> 
> ...




All things being equal I prefer to directors to have decent equity stakes.  Your criterion is your own.  Just don't attack my opinion because you have done your money.


----------



## Aussie2Aussie (21 January 2008)

Broadside said:


> All things being equal I prefer to directors to have decent equity stakes.  Your criterion is your own.  Just don't attack my opinion because you have done your money.




I personally have been out of the market since March 2007 because of this very event that we are now experiencing; sure, I have left $ behind but it drives me insane when I see comments from people that have no idea as to how the real corporate world works, but are prepared to put their hard earned into companies.


Your the one posting on this loser, not me!


----------



## Broadside (21 January 2008)

Aussie2Aussie said:


> I personally have been out of the market since March 2007 because of this very event that we are now experiencing; sure, I have left $ behind but it drives me insane when I see comments from people that have no idea as to how the real corporate world works, but are prepared to put their hard earned into companies.
> 
> 
> Your the one posting on this loser, not me!




Yes I bought today at $3.10, congrats to you for staying on the sidelines for the past year.  What is bank interest?  6%?  Nice going.  And you're posting on this stock too, difference is I have a reason to because I own it, what is your reason other to knock contributors?

No more from me.  You can keep this going if you like.


----------



## Aussie2Aussie (21 January 2008)

Broadside said:


> What is bank interest?  6%?  Nice going.




Ah greed, what a wonderful thing...only problem is days/weeks like this make greed not so great.


----------



## Gundini (23 January 2008)

How sick is this puppy! 

Last trade $2.55

Remember what a stella performance while under the Record Investments brand. What a difference a year makes...


----------



## Broadside (23 January 2008)

Gundini said:


> How sick is this puppy!
> 
> Last trade $2.55
> 
> Remember what a stella performance while under the Record Investments brand. What a difference a year makes...






the capitulation today is a worry, more so than 2 days ago.  Obviously many in the market think it is finished.


----------



## Bolivia (23 January 2008)

So I gather, David Coe and one or 2 others have been margin called. Could explain some of the negative trading. The rest is blind fear by the looks of it. With MFS/CNP debacles front and centre, the fear of another is too much to cope with for some.

I hold AFG and will add at these levels. With confidence


----------



## tronic72 (23 January 2008)

This is quite amazing. 

There's not a single piece of solid evidence that can explain Allco's decline. I'm not saying there isn't risk involved in this share, there is. The company has been asked on numerous occasions if  there is any valid reason why it's share price should have declined and on each occasion they have said "NO". 

When asked what exposure AFG has to the US Sub-Prime markets they have said "very little". In fact, some of the Aussie Banks actually have more exposure to the Sub-Prime market than Allco.

Unfortunately, AFG has done it's self and it's share holders a massive disservice by not supplying the market with more evidence that their exposure is minimal and it is this uncertainty that has driven the fears of the Market.

If it turns out that Allco was, or is in trouble, surly their directors will be thrown in jail. I suspect that this is NOT the case as directors of the companies currently in trouble have already been forced to show their hand. This has NOT been the case with Allco Finance.

I'll be waiting with great anticipation for February 15.


----------



## Broadside (23 January 2008)

I agree with you tronic, there is no information in their announcements which warrants this kind of hammering.

Either there is insider trading and the sellers know something we don't (they hit a subprime iceberg) or else it is shorters making a killing in the absence of buyers because of the twin effect of broader market rout and negative AFR articles this week.  If it's the latter it should bounce back hard when the dust settles.

Hoping it's the latter.  But I am only dabbling in it.


----------



## Agentm (23 January 2008)

tronic72 said:


> This is quite amazing.
> 
> There's not a single piece of solid evidence that can explain Allco's decline. I'm not saying there isn't risk involved in this share, there is. The company has been asked on numerous occasions if there is any valid reason why it's share price should have declined and on each occasion they have said "NO".
> 
> ...





tronic, your very astute in understanding the way mechanics of the allco future announcements will follow, and i have little doubt 15th  february will answer your concerns. it may be a great share to be in at these levels imho..


----------



## michael_selway (23 January 2008)

Broadside said:


> I agree with you tronic, there is no information in their announcements which warrants this kind of hammering.
> 
> Either there is insider trading and the sellers know something we don't (they hit a subprime iceberg) or else it is shorters making a killing in the absence of buyers because of the twin effect of broader market rout and negative AFR articles this week.  If it's the latter it should bounce back hard when the dust settles.
> 
> Hoping it's the latter.  But I am only dabbling in it.




hm might as well go back down to 50c!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 71.9 82.3 92.8 
DPS 44.0 44.0 48.0 51.0 *

thx

MS


----------



## tronic72 (23 January 2008)

Thanks for your replies Agentm & Broadside,

I've held AFG on and off for he last 6 months and have actually done well with it. I purchased early this morning (bad) and late this afternoon (good). 

Before posting, I once again listened to the December meeting regarding the acquisition of Rubicon. It reminded me why I got into AFG in the first place. I urge anyone interested in AFG to listen to the recording of the meeting. It's available for their website. Some of the shareholders questions where the same questions both myself and others in the market had in regards to the acquisition of Rubicon. Having listened once more to the answers given, I'm still satisfied that the acquisition of Rubicon, although pricey, was a good move for the company. 

Although many analysts claim the purchase price of Rubicon was high, it's important to note that there were caveats put in place that stipulated that if the Rubicon assets didn't perform, Allco wouldn't pay. This gave both parties a huge incentive to perform. AFG also already owned 20% of Rubicon so it also made sense in that respect. It should also be noted that many of the properties in both the AFG and Rubicon portfolio are extremely high quality, as are both their tenants and the long term leases they hold.

These guys aren't idiots. If they have a fault, it's their lack of Market transparency & shocking PR. 

Interestingly, many of the research groups STILL have AFG as a buy, even after yesterdays crash! Most have down graded their earnings forecasts but there valuation of AFG is still high. Aspect Huntely for example, has a current buy recommendation with a price target of nearly $10, I quote 

*Huntley's Recommendation: Allco Finance Group Limited*
"Our valuation is reduced to $9.65 to reflect a more conservative attitude toward risk."

Name one other share with a dividend of .44c, P/E ratio of 4.37 and a target price of nearly 500% it's current price.

It's also interesting to note that David Coe currently owns 6.7% of the company, surely as the ultimate insider, he of all people would have substantially reduced his holding if the company was doomed. 6.7% of nothing, is still nothing.

If the company ISN'T in the kind of trouble that the market "suspects", I suspect AFG will be one of the success stories of 2008. If it is in trouble, I'll be one of the first to organise a visit from "Bubba" when the directors are thrown in jail.



PS. This isn't ramping. These are just the facts as I see them. If there were facts to the contrary I'd be the first to list them (lack of transparency etc are examples).


----------



## Garpal Gumnut (23 January 2008)

tronic72 said:


> Thanks for your replies Agentm & Broadside,
> 
> I've held AFG on and off for he last 6 months and have actually done well with it. I purchased early this morning (bad) and late this afternoon (good).
> 
> ...




I don't hold AFG but have followed their price via my charts.

In spite of yours and aspect Huntley's optimism , a stock is worth the highest price the next bloke will pay you for it.

As of my 5.30 pm today data this was $2.21

Its a bit like a banana grower telling you bananas are woth $12.50 a kilo when they are selling at a market for $2.21 a kilo. and in plentiful supply. That is their price and that is their worth at that time. they may be cheaper the following day.

This chart reminds me of HIH as it fell, and stabilised, and fell again, and again, until it went bust.

I would beware of buying this stock on dips. It may keep on going down. 

A daily chart is enclosed. What it says is that there are more sellers than buyers, driving the price down.

Note that the volume increases when the price goes down, and drops on recovery from "dips".

gg


----------



## BSD (23 January 2008)

Forced sellers guys. 

Note the announcement tonight concerning the related party having a monster margin call and being forced sellers of 20m shares. 

Nothing to do with fundamentals or the chart. 

Trading tomorrow will be interesting...


----------



## Ken (23 January 2008)

If the dividend remains at 48 cents then the stock is going to pay for itself in only a short time.

I think its worth getting 2-3% of your total port folio dedicated to a stock like AFG.  If it does go bust then your losses are not substantial, if it is a success then your rewards could be great, with an ongoing dividend. 

Looking back at MQG I am sure they were in the same trouble early on.

Either way a lot of money is going to be made and lost on this stock.

If AFG is around in 12 months it could be an amazing ride.


----------



## reece55 (23 January 2008)

BSD said:


> Forced sellers guys.
> 
> Note the announcement tonight concerning the related party having a monster margin call and being forced sellers of 20m shares.
> 
> ...




True BSD, it will be very interesting.....

But only today did the APT actually sell their shares, all other selling prior to today has been market driven.....

Whilst I do think they have problems, the 1.70 low appeared overdone to me unless they are bankrupt....... Amazing what a turn in sentiment can do, I sold out after they announced they would be buying the largest stake in the Qantas buy out that failed..... my 12.90 sale is looking o so sweet.............

Imagine how the employees and senior management are feeling now.... their margin call means they have sold out at what could potentially be a market bottom, giving up a significant portion of the Company dirt cheap.... very sad...

Cheers


----------



## tronic72 (23 January 2008)

*Allco staff fund at root of company shares crash*

Scott Rochfort and Stuart Washington, Sydney-The Age
January 24, 2008

THE crisis of confidence surrounding Allco Finance Group has grown into full-blown panic, when a fund believed to be largely owned by the group's senior employees contributed to the company's demise by being forced to dump Allco shares at fire-sale prices.

A single trade of 10 million Allco shares at $3 each yesterday morning further pushed down the share price in a company already under siege, as it emerged that the fund was being forced to dump stock in Allco after being margin-called by two of its four lenders.

Making matters worse, the Allco Principals Trust (API) is the company's largest shareholder.

Allco shares dived 43% to a new low of $1.70, before recovering to close 78 ¢ lower at $2.21, as the company left its investors in the dark until after the close of trade.

Shares in the company have now fallen more than 60% since the start of the month.

It was only after 6pm that Allco released a letter it received from Allco Principals Trust, which is believed to count Allco executive chairman David Coe as a key shareholder.

Allco chief executive David Clarke would say only that the fund's stakeholders included some "long-standing Allco employees" and senior executives.

Mr Clarke said he was not an API shareholder.

Mr Coe declined to comment on his interest in API. "I'd never comment on any shareholder matters," he told BusinessDay. "I divorce any single shareholder issue from the business."

API said it had been forced to sell 22.1 million shares, or 6%, of the group and a further stake in the listed Allco HIT, citing "extreme market volatility".

Adding to the concern, the distressed API is managed by Allco's Managed Investment arm and still remains the group's largest single shareholder, with a remaining 26.7 million shares.

"API is currently in constructive discussions with the remaining two margin lenders with a view to completing a standstill agreement between API and those lenders to ensure that, given the current market volatility, no further stock is sold," the letter said.

Mr Clarke expressed hope the company would prove that its current share price, which is down 60%, is unjustified when it releases its results next month.

"We're confident that when we publicly announce our results on the 15th of February the broad market will understand that the business continues to perform well."

He said that the API sale did not breach laws forbidding directors or executives selling stock in the "blackout" period leading to company's profit result announcements. This was because it was not managed by the directors.

Mr Coe dismissed talk his company could struggle to pay its debts.

"Most of the assets that you find in our main areas, they are all very long-term assets and we have no problem securing long-term debt for them."

As for the share slump. "There's no empirical or fundamental reason for it."


----------



## GreatPig (23 January 2008)

Gundini said:


> Remember what a stella performance while under the Record Investments brand.



Yeah, pretty amazing.

I held this for nearly a year from mid-2005 to mid-2006, and it must be close to the stock I've ever made the most money from.

GP


----------



## Bolivia (24 January 2008)

I dont think David Coe would have let his stock go to unfriendly parties. 
The hedge funds who shorted this stock have been wanting this scenario to unfold for a month or two. Unfortunately, due to the market enviroment, these hedge funds have been able to collapse the stock on relatively little volume and thus create this scenario. What might be worrying them now though, is that in order to close their positions out and lock in their profit, they needed to be the buyers of the margin sold stock. 
I don't think they were the buyers of this stock. 
If AFG come ou with the profit result/outlook and dividend statement I think they will, then these hedge funds could very well find themselves in "short squeeze land".
I belive we could well have a very significant rebound.
In their announcment yesterday, they effectively said that profits will be good, and given that they have no real debt financing issues, the fundementals of this business still remain.
Look out above


----------



## tronic72 (24 January 2008)

Bolivia: I dont think David Coe would have let his stock go to unfriendly parties. 
The hedge funds who shorted this stock have been wanting this scenario to unfold for a month or two. Unfortunately, due to the market enviroment, these hedge funds have been able to collapse the stock on relatively little volume and thus create this scenario. What might be worrying them now though, is that in order to close their positions out and lock in their profit, they needed to be the buyers of the margin sold stock. 
I don't think they were the buyers of this stock. 
If AFG come ou with the profit result/outlook and dividend statement I think they will, then these hedge funds could very well find themselves in "short squeeze land".
I belive we could well have a very significant rebound.

......40% and counting


----------



## Junior (24 January 2008)

BT margin lending have removed the lending ratio from AFG, not just for new purchases but for existing holdings.

Have all margin lenders done this?


----------



## ROE (24 January 2008)

wait until the next red day, when the margin lender will freak out
and sell the other 20M shares then you can see real price movement


----------



## reece55 (24 January 2008)

Any investor still in Allco needs to take a good look at their announcement today.

Their structure (which is increasingly being required to be disclosed to the market) is rapidly unwinding.......

If I get time, I will do a quick digram to illustrate all the no no's these guys have being doing since Coe et al vended the Allco side into Record. Reminds of a lighter version of what Enron was doing before they went belly up...

Key point - using your own companies shares as collateral, no matter what interposed structure you deam up, is not a good strcture to employ! No wonder the hedge funds are having a ball, they know this game all to well.

Cheers


----------



## ROE (24 January 2008)

Who are the 4  margin lenders that lend these guys money..maybe we should start shorting them as well


----------



## Aussie2Aussie (24 January 2008)

Broadside said:


> Directors and mgt own a large chunk of this stock...they will be guarding their wealth very closely...interests are aligned with ours.




Is it true what I am reading, the management and directors are at fault for the grief that the shareholders are suffering. Guarding their wealth a bit too closely.

Shock and horror!


----------



## Broadside (24 January 2008)

Aussie2Aussie said:


> Is it true what I am reading, the management and directors are at fault for the grief that the shareholders are suffering. Guarding their wealth a bit too closely.
> 
> Shock and horror!




_All things being equal_ I prefer directors and management to have decent equity in the company.  I know it's a hard concept for you to grasp, how do I post pictures here?  Have a nice day.


----------



## Garpal Gumnut (24 January 2008)

Broadside said:


> Directors and mgt own a large chunk of this stock...they will be guarding their wealth very closely...interests are aligned with ours.




Is this statement true if directors or management hold stock via margin loans. Where then do their major interests lie, with their shareholders, their margin loan provider or their families? 

The amount of loyalty on the part of posters to this stock amazes me. Its just a stock, to be bought and sold as necessary. At least the big operators with the margin loans know where their loyalties lie.

gg


----------



## Broadside (24 January 2008)

I'm not loyal to it...my first purchase was Monday because I consider it oversold.  

"Is this statement true if directors or management hold stock via margin loans. Where then do their major interests lie, with their shareholders, their margin loan provider or their families?"

Yes, I believe it is true regardless of how they financed their purchase.  Let's put this issue in perspective rather than being ultra pedantic, this isn't why I bought the stock!  I bought it for other reasons, yes it is high risk!  I am done arguing over this minor point.

Stay away from it if you're uncomfortable with the risk.


----------



## Broadside (26 January 2008)

http://business.smh.com.au/dont-jud...r--it-cant-be-all-that-bad/20080124-1nz0.html

a good article to balance out the bollocking it was receiving in the AFR the past couple of weeks.


----------



## tronic72 (29 January 2008)

Broadside said:


> http://business.smh.com.au/dont-jud...r--it-cant-be-all-that-bad/20080124-1nz0.html
> 
> a good article to balance out the bollocking it was receiving in the AFR the past couple of weeks.




Hmm, it's been pretty quiet here, so I assume those posters who canned AFG have gone on to can another stock.

Thanks to Allco and it's return to form, I'm back to where I was prior to the recent crash. I've also got a bunch of their shares, which based on their 07 dividend will potentially give me a 30% return on dividends alone. The cherry on top is the 100% return I made on my investment in little over a week.

To put it in context, Allco was at $6 early January. My prediction is, once their results are released on the 15th of February, the price will shoot up near the $6 level again. I think the fact that AFGs margin lenders have agreed to hold off selling more shares means that AFG have given the lenders a peak at their books to show they are on track and that it will be in everyone's interests to hold the AFG shares until after they are released upon which time the shares will have increased to pre 08 levels.

Another thing to remember is that that AFG didn't own Rubicon back when it hit it's highs. Now they do. If the company can't substantially increase their profits after the acquisition, then they should all retire early and give control to someone who can. (a room full of pre-schoolers for example)

As I said in my previous posts, there simply wasn't a GOOD reason for Allco's massive decline. Sure they hadn't performed  well but the stock was cheap and buying the stock had an element of risk but the current market is risky.



Edit. Since composing this E-mail I'm actually better of than I was prior to christmas 07. Go AFG!!!!


----------



## imaginator (29 January 2008)

How is this stock related to AXQ?

Is it the same company? Cant find a AXQ thread in this forum,...



tronic72 said:


> Hmm, it's been pretty quiet here, so I assume those posters who canned AFG have gone on to can another stock.
> 
> Thanks to Allco and it's return to form, I'm back to where I was prior to the recent crash. I've also got a bunch of their shares, which based on their 07 dividend will potentially give me a 30% return on dividends alone. The cherry on top is the 100% return I made on my investment in little over a week.
> 
> ...


----------



## tronic72 (31 January 2008)

imaginator said:


> How is this stock related to AXQ?
> 
> Is it the same company? Cant find a AXQ thread in this forum,...




Umm what are you talking about??? This is a Allco Finance (AFG) Thread. I think you've either mis-typed or misread, either way you are wrong.

Have a goodie.


----------



## tronic72 (31 January 2008)

*Journalists are getting VERYYYY sloppy.*

I refer to an Article by Stuart Washington, January 31, 2008 http://business.smh.com.au/tricom-late-again--asx-moves-in/20080130-1p32.html

In which he states "Lenders to Tricom include a the Commonwealth Bank, which extended a $100 million line of credit, and Allco Finance, which extended a $500 million line."

Minutes later I find an article on the same Web Site with the following heading

*Allco has not lent funds to Tricom*

January 31, 2008 - 10:04AM

Allco Finance Group Ltd says neither the company or funds managing by it have advanced any funds to broker Tricom Equities.

A report in Fairfax newspapers said Allco had extended Tricom a $500 million line of credit, along with Commonwealth Bank which extended $100 million.

"In an article in The Sydney Morning Herald today, the paper incorrectly reports that Allco Finance Group extended a $500 million line to Tricom," Allco said.

*"Allco and funds managed by Allco have never advanced or loaned any funds to Tricom.*"

I've seen many other ASF members bring to our attention this continued sloppy Journalism and think it's nothing short of pathetic. Interestingly the editors don't even bother with a retraction as this sort of thing seems to be becoming the norm for these sorts of Tabloid newspapers.

Edit: I've noticed BNB have also just submitted an announcement that they also aren't creditors to Tricom


----------



## prana (31 January 2008)

you could argue and b thankful for the media's sloppiness for having push this stock down so far, it's less than half it's bookval. Unfortunately for me, I was a holder prior, but it means opportunity to pick up more - cup is half full still. Part of the game right?


----------



## tronic72 (31 January 2008)

prana said:


> you could argue and b thankful for the media's sloppiness for having push this stock down so far, it's less than half it's bookval. Unfortunately for me, I was a holder prior, but it means opportunity to pick up more - cup is half full still. Part of the game right?




Yeah you could. Unfortunately my money was tied up elsewhere. To those who question the media's ability to sway the market you only have to look at the way AFG went today. Stock was nearly 10% down early when the initial article was posted then turned around almost as soon as the second article claimed they didn't lend Tricom money. Finally it closed 3% up. 

Nearly 15% movement on sloppy journalism.

I actually have a crazy conspiracy theory that the Fairfax media are hammering AFG in order to make Challenger Financial more attractive. Crazy..... or NOT!


----------



## YELNATS (31 January 2008)

tronic72 said:


> *I've seen many other ASF members bring to our attention this continued sloppy Journalism and think it's nothing short of pathetic. Interestingly the editors don't even bother with a retraction as this sort of thing seems to be becoming the norm for these sorts of Tabloid newspapers.
> 
> Edit: I've noticed BNB have also just submitted an announcement that they also aren't creditors to Tricom*



*

The AFG directors and/management ought to be demanding a retraction of wrong reporting as it's distorting sp values.*


----------



## Garpal Gumnut (2 February 2008)

tronic72 said:


> Yeah you could. Unfortunately my money was tied up elsewhere. To those who question the media's ability to sway the market you only have to look at the way AFG went today. Stock was nearly 10% down early when the initial article was posted then turned around almost as soon as the second article claimed they didn't lend Tricom money. Finally it closed 3% up.
> 
> Nearly 15% movement on sloppy journalism.
> 
> I actually have a crazy conspiracy theory that the Fairfax media are hammering AFG in order to make Challenger Financial more attractive. Crazy..... or NOT!




Due to the level of paranoia about this stock I deliberately did not reply yesterday, lest my humble bankroll was accused of trying to sell down this can of worms. 

The AFR and Australian just report the facts as they are available.

Basically it has been overvalued, had an opaque management structure and delivered unsustainable riches to the undeserving major holders.

Macquarie and Babcock and Brown are in a similar position and will unwind similarly.

In markets generally, the profits to, and fees taken by,  directors , in the long run, are inversely proportional to the stock price. The price eventually corrects for corporate excess. 

This has happened with AFG.


gg


----------



## tronic72 (2 February 2008)

Garpal Gumnut said:


> Due to the level of paranoia about this stock I deliberately did not reply yesterday, lest my humble bankroll was accused of trying to sell down this can of worms.
> 
> The AFR and Australian just report the facts as they are available.
> 
> ...




Hmmmm, way to sit on the fence. A call to someone at AFG or Tricom would have told the AFR that Allco has NEVER lent money to Tricom so I fail to see how your comment has any value.

Your sort of fence sitting attitude would make sense if AFG was the only share you were bagging but when you bag the likes of MQG & BNB you show how little you know about those two businesses, all  of which have been highly profitable for a long long time and will continue to be so when the commodities boom, bubble bursts.

It might pay to take a trip down from Townsville to see what is actually happening in the real world. Business' aren't falling into the ground. There aren't runs on the banks and believe it or not, banks are still more than happy to lend the likes of AFG, BNB & MQG more money for one simple reason; they make money and lots of it and this in turn has helped the banks make record profits year in and year out. 

I do agree with you that these sort of business' could benefit from greater transparency and I also agree that AFG's management hasn't done a good job recently (a fact they admitted in their last AGM). It's also obvious that the likes of AFG, BNB & MQG will have a harder time to get the funds that lending institutions have been so keen to give them in the past. One could argue that this will only give share holders more confidence in future business decisions for these sort of businesses.

Finally, I wonder why people like yourself feel the need to post in threads for stocks they obviously don't like. If you don't like the channel, change it, don't sit there complaining about it.


----------



## Garpal Gumnut (2 February 2008)

tronic72 said:


> Hmmmm, way to sit on the fence. A call to someone at AFG or Tricom would have told the AFR that Allco has NEVER lent money to Tricom so I fail to see how your comment has any value.
> 
> Your sort of fence sitting attitude would make sense if AFG was the only share you were bagging but when you bag the likes of MQG & BNB you show how little you know about those two businesses, all  of which have been highly profitable for a long long time and will continue to be so when the commodities boom, bubble bursts.
> 
> ...




Thanks Tronic,

I'm sorry if you feel I've bagged your share. As I said before its a stock, an object that is to be bought or sold, or in this case shorted, margin loaned, geared, optioned, warranted etc.

Its directors have been slowly roasted in the AFR and Australian. 

Its stock price has been savaged.

This is a stock forum, not a stock or share fan club, so you have to accept the negative views of your stock as well as the positive.

As with any stock I would buy it or short it if I found it was to be profitable to me to do so. Before you get on to ASIC, no I don't own it ..yet, and have never shorted it.

I don't see how a trip "down from Townsville" would do me any good. This place is booming, a beautiful place to live and I have Aussiestockforums.com any where in Australia.

I have an interest in Technical Analysis and for whats its worth if you look at the attached chart the time to buy this stock was when the little blue bars went above the little red 30 day average line, equally the time to get out was when the little blue bars went below the little red line. 

Thus the time to get out was in late November or early December 2007. 


As John Lennon would have said if he had owned this stock and seen its price fall

*“When you're drowning, you don't say 'I would be incredibly pleased if someone would have the foresight to notice me drowning and come and help me,' you just scream.”..... John Lennon*

gg


----------



## kash (11 February 2008)

Tading Halt. What could this be about? Does anyone know? Why would it be now until wednesday when their report is due thursday.


----------



## Pager (11 February 2008)

Well I'm not optimistic, any announcement doesn't look promising from recent events, rumour and of course the SP slide, no smoke without fire, but does seem odd coming 1 day before they report ???.

I'm caught good and proper with this stock, many brokers were very bullish about it only 2 or 3 months ago, was a long term hold for me but may have to look to bail out if there is bad news.

Hopefully I'm wrong and any news is the rocket up the **** it needs


----------



## Bolivia (11 February 2008)

IMHO, it would be highly unlikely in the current enviroment, and scrutiny they have been under, that Allco would come out 3 days before their results and tell the market something bad. The directors would all be sued from here to breakfast time if they suddenly found a new grissly bear in the cupboard. Very unlikely.

Therefore one has to ask, why would they possibly be going into a trading halt?

3 Options:
1. Management Buyout/Takeover - The airline leasing model would be very attractive as well as the talent pool Allco has.
2. New re-financing arrangements for the 250mill debt due.
3. Some new large purchase which they will sell into a fund. They will tell the market that this is evidence that the Allco model is still alive and well, and that the current enviroment is presenting opportunities rather than dismay.


----------



## chilliaa (11 February 2008)

Finally, I wonder why people like yourself feel the need to post in threads for stocks they obviously don't like. If you don't like the channel, change it, don't sit there complaining about it.

[/QUOTE]

Buddy im not sure i understand this comment.  Are you suggesting that we should only hype one another up with positive feelings about a stock?????
Or that if we dont like a stock, we should just ignore any postings made concerning that stock??? Why shouldnt we post our concerns???


----------



## reece55 (11 February 2008)

Bolivia said:


> IMHO, it would be highly unlikely in the current enviroment, and scrutiny they have been under, that Allco would come out 3 days before their results and tell the market something bad. The directors would all be sued from here to breakfast time if they suddenly found a new grissly bear in the cupboard. Very unlikely.
> 
> Therefore one has to ask, why would they possibly be going into a trading halt?
> 
> ...




Don't count out an earnings announcement.... I think auditors are starting to get ever so nervous, what's to stop the audit firm from hammering down some heavy impairment losses. I don't know what the value of their investments in associates are, but it would be a fairly large number, the minimum the AFG's satellite funds are down is 50% - this should be taken to the P&L. Plus, the Mobius loan book should have a very large impairment loss in light of the arrears figures disclosed by the AFR et al - if they don't post a poor earnings result, it would have to be fudged IMO.

Cheers


----------



## prana (12 February 2008)

rumours of buyout on this one.      Will see what happens after the halt but wouldn't be suprised, especially if an ex-exec takes a large stake in the company.


----------



## prawn_86 (12 February 2008)

prana said:


> rumours of buyout on this one.      Will see what happens after the halt but wouldn't be suprised, especially if an ex-exec takes a large stake in the company.




Can you actually confirm this Prana? If not please dont post 'rumours'.

The rumour I heard was that they are in a halt so they can finalise transferring half of the company over to my name


----------



## prana (12 February 2008)

lol yeah I can understand your point. I'll back it up promptly. Apologies for the inconvenience, I wasnt attempting to ramp...

Here it is...


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## chilliaa (12 February 2008)

Lateline business on abc mentioned 'this rumor' i dont know if that makes it an official rumor then


----------



## prawn_86 (12 February 2008)

prana said:


> lol yeah I can understand your point. I'll back it up promptly. Apologies for the inconvenience, I wasnt attempting to ramp...
> 
> Here it is...






chilliaa said:


> Lateline business on abc mentioned 'this rumor' i dont know if that makes it an official rumor then




Reports in the media are fine to post as 'rumours'. It is when the rumours come from sources such as an unkown 'insider' or other forums that us mods get suspicious.

Will be interesting to see what happens with these guys. At a cursory glance i always thought they were an ok company, guess it shows you need to do in depth research


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## chilliaa (12 February 2008)

Market senses Allco management buyoutBy Katherine Jimenez
February 12, 2008 12:00am
Article from: Font size: + -
Send this article: Print Email 
STRONG market speculation has indicated that Allco Finance Group founder David Coe may be about to announce a management buyout, possibly including Macquarie Bank, as soon as today.

Informed talk centred on Allco (AFG) possibly announcing today a reprivatisation, led by Mr Coe and a strategic investor. 

"Privatisation, that is the story going around," said one investor yesterday. He said any deal would need to be worth at least $1.5 billion. 

Yesterday morning the badly battered financial services company went into a trading halt, sparking a frenzy of theories, the strongest of which was that Macquarie Bank was about to take a key stake in AFG or may acquire the entire business. 

AFG has been hit in recent weeks by the cascading effect of a sagging stock price on a group of executives, including Mr Coe, who were hit by a margin call on their highly leveraged share position in their own company. 

One fund manager said: "The main rumour seems to be a privatisation, an MBO (management buyout), perhaps backed by Macquarie." 

A Macquarie spokesman said the group would not comment on the speculation. Allco also declined to comment. 

The reprivatisation news comes amid market speculation last week that an investor might be about to take a stake in AFG and may provide some capital. 

Last month, AFG co-founder John Kinghorn emerged on the company's share register with a 6.8 per cent substantial interest. 

Mr Kinghorn is the founder of RHG Ltd, formerly known as RAMS Home Loans. 

Documents filed with the Australian Securities and Investments Commission show Mr Coe is also a director of RHG Ltd. 

One source downplayed the reprivatisation rumours saying that the prospect of debt being attracted to the Allco business model right now was "very low". 

He believes a more logical outcome could be someone about to take a key stake. 

Meanwhile, separate speculation has surfaced that last Thursday all of the leasing division was called in by its bankers -- believed to be the Commonwealth Bank and Societe Generale -- and read the riot act. 

The timing of a potential reprivatisation comes as AFG's shares struggle to rebound and recapture market confidence after a patch of bad news from the company. There is also investor unease about how management is running the company -- specifically they feel it has been handled like a private company. 

Coe's critics say too many of his deals smack of related party deals, such as a move to buy into the Rubicon real estate business set up by his friend Gordon Fell. 

Since December 12, AFG's shares have fallen from $7.82 to $2.21 on January 23 before recovering yesterday to $3.05, when trade was suspended. 

The complex and aggressively financed transactions that were a feature of the house that David Coe built may have delivered substantial upside during a long bull market, but they are now proving to be negatives for the group in a bear market at a time when credit for leveraged borrowers is harder to come by. 

While market sentiment turned on AFG after its failed joint $11 billion bid for Qantas Airways, the bulk of the company's share price purge has been in past months, mostly in investor unease at its ability to refinance debt and highly geared borrowing structures. 

That confidence took a further battering recently over the margin call brought on the executives' ownership vehicles, Allco Principal Investments, triggering panic selling in AFG. 

API is a trust comprising Mr Coe and other former and existing executives in AFG. 

Its horror stretch continued last week when AFG announced the postponement of the first close of its Allco Global Trust and Infrastructure Fund after a foundation investor pulled out of a $200 million commitment. 

Additional reporting by Glenda Korporaal


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## YELNATS (13 February 2008)

AFG has today requested suspension of trading of its' shares as the date for trading halt has expired. 

No indication of how long the suspension will last. Fingers crossed.


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## Pager (18 February 2008)

They have delayed the release again !!!!.

This article is a bit worrying.

http://business.smh.com.au/beleaguered-allco-delays-release-of-halfyear-results/20080215-1sfc.html

Particularly this bit 

Allco gave no reason to the ASX for the decision. The move heightened concerns about the fund and asset management group's debt position, given the sharply rising cost of credit on world finance markets.

Its problems had prompted the group's lenders to ask the corporate restructuring specialist Ferrier Hodgson to examine Allco's books to help ensure it is able to refinance a $250 million loan facility in May, sources confirmed yesterday.


----------



## Awesomandy (18 February 2008)

From September 2007:



Awesomandy said:


> Assuming the div forecast is spot on, it means we get around 5.6%, mostly franked. So, even if the sp stays at the same spot for years, it would still outperform a bank account. And, with a forward PE of around 10, and growth forecasted to be around 20%, it's a no-brainer, I think. This one is going into my core strategy.




I saw signs of trouble (well, not exactly, but that's what stop losses are for), and sold it quite a while back, but still, having said what I said 5 months ago, I wonder if I still have any respect left on ASF.


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## reece55 (18 February 2008)

reece55 said:


> Of the investment bank style entities, this one has been hit the hardest.
> 
> I remember reviewing AFG with one a friend indicating a head and shoulders pattern on the weekly time frame that pointed to 6.90 as a target - initially even I thought that was just a ridiculous target, but what do you know, it actually payed out.
> 
> ...




Well, it's now about 5 months and a 60% reduction in market cap for AFG and all I can say is that if it looks to good to be true, sometimes it just is. The chart told us back then this one was a disaster....

Today confirms the suspicions that I have always had... No company delays the release of their financial statements with no good reason unless you are arguing with your auditors - perhaps we are seeing another MFS where they just won't come out of trading halt......

Cheers


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## Pager (18 February 2008)

Well I'm resigned to the worst with this one, been living on hope for the past month and that in itself was a mistake 

Sh#t happens as they say, was a true believer in the Allco story but it ain't looking too flash know with Macquarie and/or B&B set to pick up the good bits at a knockdown price.

Unless they surprise everyone it will be a big dent in my profits for the year


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## reece55 (18 February 2008)

Pager said:


> Well I'm resigned to the worst with this one, been living on hope for the past month and that in itself was a mistake
> 
> Sh#t happens as they say, was a true believer in the Allco story but it ain't looking too flash know with Macquarie and/or B&B set to pick up the good bits at a knockdown price.
> 
> Unless they surprise everyone it will be a big dent in my profits for the year




Well I don't reckon your the only one Pager, I know plenty of other people that loaded up on this stock at 6 bucks only to watch it continue slide down. And hey, if it's only profits and you had diversified, then you will come out stronger at the end. Believe me, I've been through these kinds of stocks in the past when I was holding them - not a comfortable position to be in... At least you have the balls to post about it!

Cheers
Reece


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## kash (23 February 2008)

I notice an announcement regarding substantial holdings for allco Can anyone tell me what this is telling us?


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## reece55 (23 February 2008)

kash said:


> I notice an announcement regarding substantial holdings for allco Can anyone tell me what this is telling us?




Their secretarial department forgot to lodge sub notices for all of the subs inherited from the Rubicon acquisition - it's old news, doesn't really mean anything in the context of Allco's going concern/trading status.....

Cheers
Reece


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## sam76 (25 February 2008)

2324 GMT [Dow Jones] Allco Finance (AFG.AU) tumbles more than 50% to be last at A$1.50 after returns from extended trading halt with announcement of 10% net profit fall, plans for sales of non-core operations to pay debt. No dividend forthcoming for 1H given company's financial situation. Much uncertainty remains. Hard to be optimistic about prices AFG will get for its assets in current environment, and given apparent forced sale. (RBT)


OUCH - feel for those in AFG atm


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## sam76 (25 February 2008)

What Bloomberg has to say:

Feb. 25 (Bloomberg) -- Allco Finance Group Ltd. plunged more than 60 percent in Sydney trading after the Australian asset manager said lenders may force it to repay A$1.15 billion ($1 billion) of debt in the next three months. 

Allco has A$250 million of debt due May 1 and another A$900 million that it could be called on to repay within 90 days, Chief Executive Officer David Clarke said in a statement today. 

Allco shares slumped to A$1.11 at 11:10 a.m. local time, a 92 percent drop from their record A$13.23 a year ago. The Sydney- based company joins Australian firms including Centro Properties Group and MFS Ltd. that have lost most of their market value as investors shun indebted firms with complex corporate structures. Allco is a stakeholder in at least five listed funds that carry its name. 

``The rapid and unanticipated dislocation in global credit markets and associated volatility in equity markets has had a significant impact on the operations, financial position and outlook for Allco,'' Clarke said. ``We are now developing and will be implementing a focused and aggressive business restructure.'' 

The shares had been suspended since Feb. 9 as the company twice postponed its earnings announcement. 

The company, which manages A$9.4 billion, today said it will continue to focus on managing its existing real estate, aviation, shipping and rail assets, while it's in talks to sell ``non core assets.'' It didn't name the parties that it's talking to or the assets that it intends to sell. 

Selling Assets 

Allco said it had already agreed to sell its stake in the Consolidated Edison portfolio of power stations at a loss of A$72.1 million to Industry Funds Management. 

The company also said net income fell 14 percent to A$84.7 million in the six months ended Dec. 31, from A$98 million a year earlier. It did not pay a first-half dividend, and said it did not expect to pay a dividend in the next half. 

Last month, Allco sparked rumors of a takeover by Macquarie Group Ltd. when two lenders forced the sale of 22.1 million shares, about 6 percent of Allco's issued capital. 

Allco Principals Investments Pty, an investment vehicle controlled by past and present company executives that used its stake in Allco Finance as collateral for loans, had agreed with two lenders to halt margin calls until after the company posts its annual earnings, scheduled for Aug. 21. 

Macquarie Group, Australia's biggest investment bank, and Allco were partners in a failed attempt to take over Qantas Airways Ltd. last year. 

Qantas, Australia's biggest airline, yesterday said it would not bid for any of Allco's 54 aircraft.


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## Pager (25 February 2008)

Dumped all mine today 

Got out of MFS and Centro before the carnage, 3rd time not so lucky 

What a disappointment this stock has been, all I can think of to say is from Blackadder, when Edmund is thinking of a suitable phrase for being given orders for going over the top "It rhymes with Clucking Bell Balldrick"?


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## vishalt (25 February 2008)

This company will be wound up, might as well go short on it till it goes to 40c like Centro, still 50% more to go!


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## Pager (25 February 2008)

I find it ironic that the stock price plunged to about $3 only a few weeks ago when it was revealed that senior managers had received margin calls and had to sell a good portion of there holdings 

Must be thanking there lucky stars today i would imagine .


----------



## michael_selway (25 February 2008)

vishalt said:


> This company will be wound up, might as well go short on it till it goes to 40c like Centro, still 50% more to go!




Hm no dividend declared for the full year really sucks 

thx

MS

*Date: 21/2/2008 
Author: Danny John; Michael Evans; Stuart Washington 
Source: The Sydney Morning Herald --- Page: 25 
The directors of struggling Australian-listed structured finance cpany AllcoFinance Group (AFG) are still holding back the 2007-08 interim profit result.This is now a delay of close to one week on 21 February 2008, although AFG notesthat it is not technically required to release the data until the end of themonth. The banks who are major creditors to the group have appointed corporateturnaround specialist firm Ferrier Hodgson to investigate its accounts. Theboard meanwhile is trying to source an interested party for an asset divestmentor cash injection. It must also organise refinancing of debt and renegotiate aplanned power infrastructure deal in the US *


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## Julia (26 February 2008)

Pager said:


> Dumped all mine today
> 
> Got out of MFS and Centro before the carnage, 3rd time not so lucky
> 
> What a disappointment this stock has been, all I can think of to say is from Blackadder, when Edmund is thinking of a suitable phrase for being given orders for going over the top "It rhymes with Clucking Bell Balldrick"?




Commiserations, Pager.  I once had a lot of faith in this company, bought when it was still Record Investments, and sold last year.

None of us likes copping a loss ( I took a 40% drop with a lot of other holders in less than an hour on Bradken, expected it to recover, it didn't, so I turned that 40% loss into a 50% loss before selling).

You're out now.  Forget about it.  Focus on your successes.

Good luck.


----------



## 3 veiws of a secret (26 February 2008)

After missing the reports and conclusions of yesterday this share is worthless in my books ....I culled my losses today ...happier stocks elsewhere!......Can't keep having blood over my portfolios!:walker:


----------



## GOSAFAS (27 February 2008)

AFG's price has risen by almost 25% today - quote from the age online - "After an initial dip of 8% in early trade, Allco shares are up as much as 33% or 31 cents to $1.125 on market speculation of a buyout at $2 a share. The shares, which resumed trading on Monday after it published delayed results, are down from $13 a year ago." - If this is so then Allco will be in serious breach of ASX regulations or somebodys been doing some insider trading.


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## ghostworld (27 February 2008)

Bought AFG for $1.16 today. Obviously taking a punt that this privatisation rumour will eventuate. 

Assuming that AFG can trade their way past the debt issues, privatisation is probably the best option for management going forward especially with the current SP (at 1.03 their market cap is only $346 mil) and compound this with the negative media and shareholders view of the company.  

Not sure how long it would take to do due dilligence on AFG's complex structure. So i suspect this will be limited to companies who understand the complex structure such as private quity firms and Macquaire Bank. If AFG manages to team up with a cashed up investor, they can take advantage of the low SP and eventually re-list as a pure leasing company.

This all assumes that AFG can trade past the debt issues of course. If they can't, then i'll die a little bit inside for taking this punt.


----------



## Julia (28 February 2008)

ghostworld said:


> Bought AFG for $1.16 today. Obviously taking a punt that this privatisation rumour will eventuate.
> 
> Assuming that AFG can trade their way past the debt issues, privatisation is probably the best option for management going forward especially with the current SP (at 1.03 their market cap is only $346 mil) and compound this with the negative media and shareholders view of the company.
> 
> ...



Ghostworld:  please don't regard this question as a criticism of your buying AFG, but I'm really interested to know why - if you have money to buy any company you choose - you pick one whose future is so uncertain?
There are lots of really solid companies at bargain prices right now which don't represent "a punt" but rather a great investment.  Perhaps you just have a great appetite for risk???
Just curious.

Unrelated, well almost, to the above question, it looks as though KPMG may have some questions to answer on this one also.

http://business.smh.com.au/allco-admits-to-19b-error/20080227-1vbg.html?sssdmh=dm16.304664


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## ghostworld (28 February 2008)

Julia,

It's a very risky investment. I agree that there are better investment opportunities out there that will eventually reflect their true SP once the bear market is over. Ideally I would invest in a better company for long term purposes. AFG purchase is purely speculative (looking for fast gains) which is possible if there is a buyout offer. The chance of this is quite slim as it's limited to only a few companies who would offer such a buy out.

FYI. I sold my AFG shares today and bought some CNP. That probably illustrates my appetite for risk. I'm guessing that CNP has aired out all it's bad news to that market and hopefully the SP will trend upwards. Still a risky investment as a nervous banker can always pull the trigger.

I do intend to invest in shares with stronger fundamentals. I just think that the market is still on the way down. 

A while back i purchased Map around the time they listed. Well run airport which are monopolies in most cases couldn't overcome the negative market reaction towards Macquarie Bank's high purchase price for sydney airport and the Macquarie management model. Which is again being targeted negatively in this current bear market. I guess my point is even though i believe Map was going to perform earnings wise. I should have waited for a better time to purchase the shares. It fell by more than 50%. Eventually this became one of my best investments when the SP rose a few years later.


----------



## Julia (28 February 2008)

ghostworld said:


> Julia,
> 
> 
> I do intend to invest in shares with stronger fundamentals. I just think that the market is still on the way down.



Agree entirely.  I'm sitting on about 80% cash at present.



> A while back i purchased Map around the time they listed. Well run airport which are monopolies in most cases couldn't overcome the negative market reaction towards Macquarie Bank's high purchase price for sydney airport and the Macquarie management model. Which is again being targeted negatively in this current bear market. I guess my point is even though i believe Map was going to perform earnings wise. I should have waited for a better time to purchase the shares. It fell by more than 50%. Eventually this became one of my best investments when the SP rose a few years later.




And in the meantime you were enjoying a healthy dividend on MAP if I recall correctly.  Makes good sense.

Hope you have a similar good outcome with  Centro.
Thanks for the explanation - and for humouring my curiosity.

Regards
Julia


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## ghostworld (3 March 2008)

Just as well i got out of AFG a few days ago. Not that Centro was much of a consolation. 

I wonder why they have decided to resign from their directorship. Surely, it's not because they decided that it would be good corporate governance to step aside. All their previous actions runs counter to this idea. I also doubt that it's because of shareholder pressure.  

Is it possible that this is one of their early steps to attempt a management buyout. It would have been odd if David Coe remained as chairman to supposedly represent the shareholder's interest as opposed to management's.

http://www.theaustralian.news.com.au/story/0,25197,23309347-643,00.html

------------------------------------------------


THREE directors of embattled Allco Finance Group resigned today, including chairman David Coe.

Allco Finance (ASX: AFG: quote) said Mr Coe, Gordon Fell and David Turnbull will remain involved with the management of the business, but it will look for a new independent chairman.

On Friday, Allco Finance and three of its listed property trusts unveiled plans to offload up to $3.37 billion of assets to pay down debt.

Allco Finance's shares have been savaged over the past month on mounting concern about debt levels. The share price rout has triggered margin calls on stock held by its directors, exacerbating the falls.

The resignations mean that the board now has a majority of independent non-executive directors.

"I will remain an executive of Allco, and assist the company in the implementation of its restructuring program," Mr Coe said in a statement.

Deputy chairman Bob Mansfield will chair the board until a new chairman is appointed.

Shares of Allco were down 23 per cent at 67cents by late morning today. The benchmark S&P/ASX 200 Index was down 3.2 per cent.


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## EZZA (5 March 2008)

thought i'd go for a punt yesterday, bought in 40.5c.  sold out at 70c today.

back in at 51.5c.  interesting to see a big buyer today. hmm. someone has faith in this company.


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## BSD (5 March 2008)

EZZA said:


> thought i'd go for a punt yesterday, bought in 40.5c.  sold out at 70c today.
> 
> back in at 51.5c.  interesting to see a big buyer today. hmm. someone has faith in this company.




Someone?

Kinghorn is a founder of the business - recently minted by selling RHG to punters at $2+

He threw $12m into AFG after picking up 6% or so at $2.85

Maybe he is smarter than the average bear?

Maybe he is like Tony Smith averaging down into MFS and blowing his dough?

http://www.goldcoast.com.au/article/2008/01/18/6896_gold-coast-business.html

Buggered if I know...


----------



## krisbarry (5 March 2008)

Well the share price took off after the "substantial holder" noticed was recieved today.  Maybe there is life in this company after all.


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## 56gsa (5 March 2008)

Kinghorn also buying in big to RRT which is linked with AFG... he now has almost 20% in RRT - at what point does he have to announce a takeover?  20%?


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## krisbarry (6 March 2008)

*Takeover Rumour*

Takeover rumours swirling around Allco gained credibility today, after RAMS founder John Kinghorn lifted his stake in the troubled group to 10 per cent.

Take a look at this video

http://www.abc.net.au/reslib/200803/r229876_916932.asx


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## upgrade (6 March 2008)

Trading Halt requested!

8 new announcements on the ASX, 3 price sensitive. Not looking good at this present time. 

Does anyone have any insight into where we may go from here?

Thankyou in advance


----------



## reece55 (6 March 2008)

upgrade said:


> Trading Halt requested!
> 
> 8 new announcements on the ASX, 3 price sensitive. Not looking good at this present time.
> 
> ...




I suggest you take a good look here......

Looks like the banks have said enough is enough for the groups largest shareholder, which realistically is just a vehicle for executives to invest in the Company........ The worst part was that Allco was actually investing in itself, because some of Allco's investments in associates actually had investments in preference shares in API. It has all come undone for this group...... what a fall from grace......

Cheers


----------



## Kauri (7 March 2008)

*NAB has pulled out of a $A110 mln Allco deal*
 and Australian banks are facing risk of $A600 mln in losses from Hedley Leisure & Gaming Property Fund. 
A San Francisco-based US backer is also pulling out of deal to privatize Lachlan Murdochs"s Consolidated Median Holdings in a deal worth over $A3 bln as the credit crunch continues.


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## cinishappy (9 March 2008)

Does any one know what is there mission and vision statement? I cant find them in their website. I am doing a presentation of my school assignment regarding Allco Finance Group whether to invest or not to invest.


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## ghostworld (9 March 2008)

cinishappy said:


> Does any one know what is there mission and vision statement? I cant find them in their website. I am doing a presentation of my school assignment regarding Allco Finance Group whether to invest or not to invest.




Try their annual report. That's where they usually have them. If they have a mission statement, it probably doesn't sound anything to what they actually do.

"Increase revenue by financial engineering through cross ownership of related entities. The company will attain it's target size by attaining debt funding from greedy banks. This debt will then be used to purchase more shares in our company through our related vehicles thereby inflating the company's value" (sarcasm. Don't use this for your school assignment)


I can't see why you would want to purchase AFG now unless you're taking a small punt or your a takeover or arbitrage player.


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## vishalt (9 March 2008)

cinishappy said:


> Does any one know what is there mission and vision statement? I cant find them in their website. I am doing a presentation of my school assignment regarding Allco Finance Group whether to invest or not to invest.



I can give you one right now: 

"To keep afloat."

Otherwise go to http://www.allco.com.au and to the about section has a few statements/history.


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## cinishappy (10 March 2008)

Thank you so much for your help. My assignment is about recommending whether to invest or not to invest in a particular company. Since Allco is in a big mess now(from 2006/07 - $13plus drop til now 0.53) and there are many news about them, I doubt any one would want to invest in them.


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## YELNATS (26 March 2008)

AFG have risen a lot %-wise in the last 2 days, although nowhere near their previous heights.

An announcement today from IMF (Australia) Ltd today indicates that they will fund litigation by AFG shareholders against AFG for AFG's alleged breaches of their disclosure obligations between 21 August 2007 and 25 February 2008.

As one of the hapless bunnies who purchased AFG in this period, I wonder if this will bring any joy to AFG holders and when?

Does anyone know of the activities and track record of IMF?


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## jamieglenda (26 March 2008)

They are talking same deal for  centro and mfs holders. They have done this before but dont know if they can be successful.


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## Pager (26 March 2008)

YELNATS said:


> AFG have risen a lot %-wise in the last 2 days, although nowhere near their previous heights.
> 
> An announcement today from IMF (Australia) Ltd today indicates that they will fund litigation by AFG shareholders against AFG for AFG's alleged breaches of their disclosure obligations between 21 August 2007 and 25 February 2008.
> 
> ...




IMO, its a waste of time, only winner will be the law firms that will charge like wounded bulls no doubt, until government authorities take action to make senior managers and directors more accountable then things wont change.

Note, most AFG senior managers and directors took margin calls around the $3 level, they suffered losses but nothing compared to most shareholders.


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## Lucky_Country (31 March 2008)

Well have been checking out AFG lately and think the worst may be over.
John Kinghorn becoming a substantial holder is a great sign.
AFG can meet its repayments but may have too sell assets to reduce debt just too keep the banks happy.
Seems like the banks are not moving too liquidate but to restructre and focus on core assets.
Banks anyhow are in to deep for there own good so its in their interests to keep AFG ticking over and repaying debt.
Credit crunch maybe easing slightly as confidence resumes somewhat.
If MFS can survive Id hope AFG could.
Well have I missed anything or is anyone not convinced and I wouldnt blame anyone for that !


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## Broadside (1 April 2008)

I hope you're right Lucky_Country but there are just too many unknowns for me to have an opinion.  The notes AFGHA are trading around $15 with a face value of $100, given they have priority over equity this price suggests the company has no chance.  But conflicting with that, one of the directors has outlayed substantial $$$ on the notes as the price has fallen, and if anyone knows the possible outcomes, it would be an insider.  I hold the notes as I see this as the best way to play AFG at the moment (unless you're a day trader) but would see survival as a bonus, not highly likely.


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## Lucky_Country (1 April 2008)

Do you still hold Broadside ?
Personally I think they may get a lifeline if MFS can survive I think AFG will.
Kinghorne may take a leading role in the revival and he has kept buying would nt be suprised too se him up his stake again.
Coe and freinds havent been asked too leave the company just to focus on their key areas while new directors are brought in.
Could be some ugly figures come out but the worst of the credit crunch is over all just overall perspective of the situation.


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## Broadside (1 April 2008)

Lucky_Country said:


> Do you still hold Broadside ?




I hold notes, average price ~ $20.  If the company survives it'll be an outstanding investment, right now it looks like an outright gamble to me.


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## Lucky_Country (1 April 2008)

Definately a risk reward scenario.
I think one of the problems is the Allco brand has been damaged.
Name change and managerial change needed for sure I thinkyou will be doing ok with your notes in a couple of months.


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## YELNATS (1 April 2008)

Lucky_Country said:


> Definately a risk reward scenario.
> I think one of the problems is the Allco brand has been damaged.
> Name change and managerial change needed for sure I thinkyou will be doing ok with your notes in a couple of months.




Agreed, even if they survive the current crisis they won't be able to prosper in the future with the Allco brand. Hopefully something like a merger or buyout, with a name, managerial and culture change can be engineered.


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## Lucky_Country (1 April 2008)

Lets hope Mr Kinghorne brings his own touch too the company.
Im pretty confident they will survive if they are good boys too the banks.
Still each must weigh up there own investment choices and not take my word for it.


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## hsv2001 (9 April 2008)

AFG share price up 10 cents already today, i'd assume it is a result that the DJ Newswires announced that AFG has now until 30 June to refinance it's debt. This could be very good news for the recovery of this company.


Any other thoughts and why AFG themselves haven't made a formal ann of this?


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## hsv2001 (10 April 2008)

Hey further good news for the troubled allco finance company, they have a potential plan in place to restructure the companies financial problems, here is the report from the AFR posted this morning.



> DJ Allco Pitches Rescue Plan To Lenders - Report
> 10/04/2008 08:06AM AEST
> 
> MELBOURNE (Dow Jones)--Embattled leasing and funds management firm Allco Finance Group Ltd. (AFG.AU) has proposed a restructuring plan in a fresh bid to pay down a large part of its A$1.1 billion in outstanding debt, The Australian Financial Review reported Thursday.
> ...


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## hsv2001 (23 April 2008)

anyone have any idea a reason for this outbreak, up 33 percent today and no ann or recent ann???

Marc


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## YELNATS (23 April 2008)

hsv2001 said:


> anyone have any idea a reason for this outbreak, up 33 percent today and no ann or recent ann???
> 
> Marc




Price now up to 85c or 48% today. I've no idea for the sudden improvement, except maybe the market's favourable response to AFG's sober approach to its' predicament, as per their April 17 letter to shareholders,

Quote
.... we have commenced the implementation of an aggressive business restructuring program to deliver a viable business for the future. This restructuring program focuses on the core strengths of our business: Aviation, Shipping, Rail and Real Estate. The program also involves an exit from Financial Assets and Infrastructure, including Allco disposing of certain non-core assets to reduce debt. We are currently in active discussions with a number of parties and expect to be in a position to make further announcements in due course. Asset sales, together with a repositioned
business, will enable Allco to significantly reduce debt by June 2009.
Unquote.

Let's hope the recovery is sustained.


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## cordelia (23 April 2008)

hsv2001 said:


> anyone have any idea a reason for this outbreak, up 33 percent today and no ann or recent ann???
> 
> Marc




Actually it has been increasing in price and volume since last friday--pays to keep an eye on the charts..doesn't really matter why.


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## jaeyon (23 April 2008)

insane price jumps. who here thinks it will keep going up? seems to have taken a dip today. its interesting that the large increase in shareprice has gone relatively unnoticed (from what i can see announcements wise and news wise)


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## jaeyon (24 April 2008)

share price is still fluctuating quite largely today. announcement was made in regards to a share price increase query. afg says they have no reason for the share price increase.


..........just like cnp


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## YELNATS (24 April 2008)

Up substantially again today on increased volume (on a per hour basis), even compared to yesterday's volume. Maybe the market's assessment is that this stock has been oversold.


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## coates776 (25 April 2008)

Hi im new to this forum. Thought I would tell you what i found.  If you go to google and type   news on allco finance and then go to the plugger link.   If you look down you will see that james Lang the estate agent in Sydney has sold the sydney complex and another for 540 million dollars.  Guess their is no announcement as not yet properlly signed..   Tenders closed on these properties two week ago so i believe this is why the price is trending up for the past two weeks.    540 mill will help them well.

Also if you type wind farm sale in google ffor allco you will see that they have 50 offers for the wing farm the one in california for 1 bill.


This sort of news once confirmed and announced should see some confidence bank in the shares.


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## rottodiver (29 April 2008)

am starting to think it may be a good one to jump back into!!!good way to make some lost money in the near future


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## coates776 (29 April 2008)

I started buying down at 25 cents having to average down from buying around 9.

Very effeective averaging when you are all the way down there!

I think they will survive, I hope RJT trading halt is good news as this one had 3 loans to sort out. 

They have to advise bank loan details before friday.


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## njc.corp (3 May 2008)

As a general view on afg-

could i get some ideas on why their won't last vs why they will and why-

whats the general view on these loans they have-

Thanks

Nick--


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## cordelia (31 May 2008)

did anyone see the course of sales on afg on Friday. When it closed is was at .46c but the close was recorded as .44c. When I looked at the course of sales several trades at .44c went through all at exactly the same time. What exactly does xtsp mean. I know this denotes the sale as cross trade but what exactly is that. Is this someone selling shares to themselves so they can manipulate the share price down?


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## dannow (1 June 2008)

:DLet us give thanks.....Allco max(AXQ) Pays dividend of 0.0145 taking my 40,000 shares to 43,119!! Not bad 4 a much maligned stock.I can't wait till August 4 nxt div.

Ciao
Dan


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## propergeez (5 June 2008)

Cordelia, I would suggest that it is a movement from one company/ person to another company/ person. Its tax time of year in OZ so companies/ people are taking loss/ profit by moving stocks around.


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## wuyi2006 (12 June 2008)

*AFG - Allco Finance Group: a good opportunity to buy the shares*

Today, the share price dropped to $0.34. I think it is a good time to buy some shares. During the review period, AFG is trying to restructure its debts to meet the banks' requirement. However, I still believe it is worth buying. It will probably have three situations in the near future. 1) All the banks will be satisfied with its payment plan and will continue to support its business. As a result, the payment date of the senior loans ($800m) will be extended to next year and the bridge loan ($250m) will be renewed. This is an ideal situation. According to the latest announcement, the total amount of bank loans will reduce to $400m by the end of September of 2009. AFG will achieve the target by selling its non-core assets and maintaining its profit. 2) AFG has become the best takeover target in Australia based on the analysis of the Australian Financial Review. Up to now, It has been keeping good capacity of profit earning and good assets base. In the past seven years, the yearly net profit was increasing sharply (growth rate: about 100%!). If some companies are willing to take over AFG, the shareholders who bought the shares at the lower prices will obtain benefit from it. 3) The worst situation will be bankruptcy. If AFG goes to bankruptcy, the shareholders who bought the cheaper shares can also get back their investments. In the latest interim financial report, AFG's net asset (excluding intangible assets and goodwill) was around $2.3 per share. Thus, if considering the loss of selling non-core assets, I think the residual value should be more than $1.5 per share. The loss from intangible assets and goodwill written off ($1.47b)will not affect the benefit of shareholders. For example, I bought 10000 shares at $0.34, it is not doubtful that I will get back my investment if the residual value is $1.5. So, I believe it is a good decision to buy some shares at a low price. Good luck!


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## hsv2001 (17 June 2008)

damn, wish i had of listened to you guys when share price was 34 - 29c, jumped up 86 percent after the sale of assets today, and buying was quite strong too. Their debt reduction facility methods seem to already be working quite well and the market now seems to think so too. By July 08 they plan to have 675m debt to pay off, good reduction in such a short time from approx 1billion.

What are your thoughts for this company in the mid to long term, can we see a few dollars per share in the near future?

Marc


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## coates776 (28 June 2008)

On Monday you will see their annaouncement that they should have reach a agreement with their banks. I would think that as their aim is 400mill debt by sept 09 they only have 225mill to go and over a year to get their. I think we shall see a revision in the amount of time it will take them to reach the 400 mill level to say xmas. Then they should get re rated and hopefully the market will see how quick they have worked to reduce their debt.

The only problem l see is that all stocks are now on a serious decline!!!


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## Largesse (1 July 2008)

Any holders of the debt notes AFGHA on here?
Was the last coupon payment recieved?
How much debt do we rank behind before we get paid out in the event of a liquidation?

kind regards


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## subaru69 (23 July 2008)

AFG has gone to hell, but if they're looked at fresh they may be worth something.  Selling off assets, recently price is up over 50% (fair enough 50% of nothing is not much if you're still holding).

I'm not an analyst, so is there anyone out therre willing to make a call?


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## tlai888 (1 September 2008)

Any comments on where AFG and AFGHA is going to ?

The net tangible asset now down below $1 ?

Can it sell more non core assets within timeframe and not lost much ?

Who can tell ? Thanks


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## prana (12 September 2008)

Big jump today from intraday lows. Volume is very low though, anyone know what's up in the backgroun ?


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## cordelia (12 September 2008)

prana said:


> Big jump today from intraday lows. Volume is very low though, anyone know what's up in the backgroun ?





It would seem as if a reversal is in sight.....Volume was pretty good today with a nice close near the high.....

I have traded this stock a few times...it tends to take off quickly once it gets going...

Have to see what happens on Monday...


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## peterh (16 September 2008)

Floating Rate Notes - AFGHA

The price of these notes has fallen to $13.10 and I'm wondering whether it might be worth a speculative trade. The current coupon rate is 10.04% pa which I assume is on $100. So that would be a payment of $5.02/share in November. If I purchased $5000 worth of shares now I would buy 381 shares. So in November I would receive $1912.62 which is an extremely high yield.

Have I missed something in my calculations, and do you think Allco will still be trading in November and able to pay Notes holders? Theoretically it could drop by the price of the payment, but really, how much lower can it go (famous last words!).


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## dubiousinfo (23 September 2008)

AFGHA

These are unsecured floating notes with a maturity date of Nov 2017 and currently trading at around $12.50 on very small volume. The company historically has made 2 payments a year in Nov and May. Nov 07 payment was $4.33 and May 08 was 463.97.

The next payment is $5.11 (40% yield) with an ex date of 31 Oct 08 and a payment date of 17 Nov 08.

There are 3.5mil outstanding currently, so the total payable by the company is approx $18 mil.

Given the state of the Allco, the 2 biggest risks to these notes are:
1) the company goes broke, in which case the notes will most likely be worthless.
2) The company announces that it is not going to make the next interest payment. In which case the price of the notes will fall heavily.

Obviously, if the company stays afloat and continues to make payments, buyers will get 80% of their money back by May next year and from Nov 09, will be free carried for further payments until 2017.

Alternatively, some may look to buy now and sell into any increase in price just before the ex date.

It would be prudent to read up on the terms of issue prior to buying in.


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## hsv2001 (23 September 2008)

Hasn't Allco put provisions away for these note interest? and how do you work out the interest rate for them? It is based on face value right? that means interest on $100, so an interest rate of 5.11% would be way below average i thought?

Thanks
Marc


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## dubiousinfo (23 September 2008)

hsv2001 said:


> Hasn't Allco put provisions away for these note interest? and how do you work out the interest rate for them? It is based on face value right? that means interest on $100, so an interest rate of 5.11% would be way below average i thought?
> 
> Thanks
> Marc




Marc,

The interest rate is currently around 10% p.a. on a face value of $100.00, the $5.11 is the amount to be paid for this interest payment. Given that current buyers are only paying $12.50 for each note, that is a yeild of 40% on this payment and 80% for the year.

As for provisions, they may well make the payment, however in the current environment and given their current state, nothing is certain.

As I said before, IF all goes well, for an outlay of $12.50 you get yearly payments of around $10.00 and the $100.00 face value back in 2017. Though if all goes badly you may get nothing. Depends on your risk tolerance.

Obviously, for anyone who paid the original face value of $100.00 its not a good investment. However for those buying now at $12.50 (with a very high risk profile) it could be very profitable.

Not Holding.


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## hsv2001 (23 September 2008)

Thanks for that Dubious, I missed out the fact that there is two payment per year sorry. let's just hope Allco can repay their debt, it seemed quite good for them a little while ago but now i'm not sure what may happen.


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## peterh (23 September 2008)

dubiousinfo said:


> AFGHA
> 
> These are unsecured floating notes with a maturity date of Nov 2017 and currently trading at around $12.50 on very small volume. The company historically has made 2 payments a year in Nov and May. Nov 07 payment was $4.33 and May 08 was 463.97.
> 
> ...




Thanks for your comments. I'll need to think this one through before proceeding as there are certainly quite a few risks associated with it.


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## hsv2001 (25 September 2008)

anybody know of any reason the share price would jump by 80% today on no news?

This is such a strange time in the market, look at BNB :S


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## prana (25 September 2008)

covering shorts is my bets guess 

Although BNB is in a different boat, the fate of this is tied to liquidating assets, unlike BNB.


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## prawn_86 (5 November 2008)

Voluntary Administrators appointed today.

I read an interesting article last week (cant find it now), predicting this would happen soon, because it has now been X months since the bank re-negotiated the debt with them so that the bank debt ranks higher than note holders, whereas before this week it didn't.

Dodgy...


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## cbacamden (19 November 2008)

The above is incorrect - please refer to the allco website to confirm. Note holders still rank with the banks

NOTE TO ANY OTHER NOTE HOLDERS - YOU MUST LODGE YOUR NOTE HOLDING WITH THE ADMINISTRATOR WITHIN THE NEXT WEEK TO BE IN LINE FOR ANY POSSIBLE MONEY. DONT DELAY


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## alphaman (20 November 2008)

cbacamden said:


> The above is incorrect - please refer to the allco website to confirm. Note holders still rank with the banks



You mean this?

"As the terms of the Allco Notes themselves state, the Allco Notes are subordinated in right of payment of interest and principal to any debts of Allco (including the debt owed to Allco's banks)."


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## cutz (7 January 2009)

Hi Guys,

So is this stock officially buried? Now that the cleaners have taken over i was just wondering if i can confidently add it to my spreadshead as a total loss, although it still showing up against my comsec holdings and of course i can't get rid of it.

I'm just in the process of transferring holdings to another brokerage therefore i'm matching +/- as i go.


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## basilio (22 January 2013)

Resurrecting the dead here - in memory of the death of Allco founder David Coe.  He died of a heart attack in Aspen.

Out of curiosity I goggled David to refresh my memory of him and Allco.  It was after all one of the biggest busts of the GFC and caused much pain.

Paul Barry wrote a very searching analysis of Coe and Co. I think its worth a read.



> *Coe & Co.*
> Paul Barry
> 
> The Monthly | The Monthly Essays | May 2010 | Add a Comment
> ...




http://www.themonthly.com.au/monthly-essays-paul-barry-coe-co--2429


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## AUSG (28 September 2014)

Maurice and Blackburn is initiating a class action for AFG

Details can be found at this link


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