AFG - Allco Finance Group

[tronic72]

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

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.

 

[reece55]

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

 

[michael_selway]

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

 

[tronic72]

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.

 

[DowJones]

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!

 

[runningrugby]

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!

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!!

 

[tronic72]

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!

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

 

[prana]

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. :

 

[tronic72]

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

 

[thevadd]

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

 

[tronic72]

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?"

 

[thevadd]

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 ?

 

[prana]

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....

 

[BraceFace]

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.

 

[Agentm]

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.

heavily shorted and solid management..

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

 

[Julia]

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.

 

[resourceboom]

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!

 

[tronic72]

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.

 

[waz]

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.

 

[tronic72]

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???