BBI - Babcock & Brown Infrastructure

[Mitsimonsta]

The office loves me.

A mate got wind that I bought BBI a few weeks back and spread the news to another colleague who threw a bit on it.

Don't share your secrets any more. They pushed up the price for the rest of us

Also, I don't know who said it but the theory about BEPPA being weaker in the afternoon got blown out of the water this week. Really guys, trying to short term trade and predict short term price movements is fair dinkum guess work.

That was me BB.

It was simply an observation that BEPPA opened with strength then died in the afternoon, closing a near-opening price. It did this for a while (about a week and a half), enough to show a trend.

But yes you are deadset correct about trying to predict the SP on a stock like this. You can only observe and extrapolate based on what you have seen.

Mitsi,

Me too, entire portfolio up appro $8k. Big for me.

I must thank you again for encouraging me to hold HFA, it has done well thus far! So THANKS!!!!

Congrats mate. You just need to have patience, yet know when to jump as things turn sour but that is easier said than done. You bought in at the bottom of the market, so all you needed to do is chill out and wait a while.

You wouldn't buy into a stock that you thought was going to fall. Wait for the rise, and then execute a sell when you see the gains made. Or, buy into a bigger, more stable company with good long-term dividends and take a longer-term view. It's much less stressful, trust me.

I always say "Never trust anyone that says 'Trust me'" by the way

There is one thing that I think we will all be agreed upon.

I would like to thank BB for drawing our attention to this stock and also for providing research commentary of a superb quality.

Very simply a superb job BB and a heartfelt thanks.

Cheers and at the survivors party there is a bottle of 2004 Grange waiting for you from me.

x2.

Except the Grange. While I have had a nice rise, I am not rich enough to afford Grange (yet). There will be something though. I don't think BB will need to pull out his wallet that night AT ALL.

I am going to leave BEPPA accumulation now, as there is simply too great a Delta between the cost average of my shares and buying in for more. If I was able to get more for 13c, then I would.

I am going to look at consolidating some of my smaller holdings, and diversify into a couple of new market sectors. I am seriously overweight on BEPPA now and need to invest 'against' it in order to follow my investment strategy. While the SP rise is appreciated, there are issues and problems created by it.

Cheers all, just cracked a beer.

 

[Tysonboss1]

I would like to thank BB for drawing our attention to this stock and also for providing research commentary of a superb quality.

Yes, thanks BB.

While I hope we have all conducted our own research, It was definatly your original comments that pointed me in the direction of beepa, So far so good.

Even if this current rise is just a flash in the pan and we do drop back on monday (which I hope we do) I feel very confident holding onto this stock, I am on board for the big win on this one.

 

[investorpaul]

From my perspective BBI/BEPPA is at the moment just being swept along with the tide. I think a lot of sidelined money is going back in. Many other unloved infrastructure and high debt companies of the last year are going up at the same time, it's not just BBI, check out BBP, MMG etc. Even INF is well up when it didn't hit the lows of the rest of the BB stable.

Good point you make there, If i get some time later I might do a table of all REIT and similar infrastructure funds with the lowest price they hit, current price and percentage gain.

It will be interesting to see where BBI stands in relation to others.

 

[Largesse]

Good point you make there, If i get some time later I might do a table of all REIT and similar infrastructure funds with the lowest price they hit, current price and percentage gain.

It will be interesting to see where BBI stands in relation to others.

I think you'll find that BBI is moving on news that Asciano potentially has multiple takeover bidders. Asciano hold some substantial infrastructure assets, particularly some PORTS.

If we see a good valuation on their ports, then geewillackers, we may be in for a ride....

i'm looking to margin into Asciano on monday provided it doesnt gap up too much....

 

[investorpaul]

I think you'll find that BBI is moving on news that Asciano potentially has multiple takeover bidders. Asciano hold some substantial infrastructure assets, particularly some PORTS.

If we see a good valuation on their ports, then geewillackers, we may be in for a ride....

i'm looking to margin into Asciano on monday provided it doesnt gap up too much....

I hold the same view. Even though the entire market has moved ahead and alot of property/infrastructure funds have seen strong gains, BBI has outperformed because of Ascianos situation, the impending annoucement of the sale of assets and the fact that it is perhaps one of the most oversold stocks

 

[investorpaul]

Please see the attachment for an excel spreadsheet showing current market price, 52 week low and percentage gain.

I included both Property Trusts because they have been hit hard over their debt levels and utilities, the sector which BBI is included in.

As of yesterdays close BBI has had a 700% increase from its 52 week low, the next biggest mover is 305% for VGP and the average for all the stocks is 118%. Even if we remove yesterdays gains BBI still performed stronger than others.

As per the discussion above, it was mentioned that BBI may just be running along with the rest of the market and those stocks that had been oversold.

While I believe some of the gains would have occured to general market sentiment the current percentage gain on BBI is far greater than any of its peers. I believe this highlights what we have been discussing for the last couple of months. I.E that BBI has been massively oversold (along with BEPPA) and that the sale of assets should ensure the security of the company.

Although we are not out of the woods yet, such strong gains in comparison to the rest of the property trusts/utilities indicates to me that the market is starting to see the long term potential for BBI/BEPPA (if a sale of assets occurs). This in my opinion is also evident by the market depth/transactions over the last couple of weeks where it appears to have moved from a stock that people were buying for short term gains/trades to one where there is a buy/accumulate/hold strategy.

 

[Largesse]

Please see the attachment for an excel spreadsheet showing current market price, 52 week low and percentage gain.

I included both Property Trusts because they have been hit hard over their debt levels and utilities, the sector which BBI is included in.

As of yesterdays close BBI has had a 700% increase from its 52 week low, the next biggest mover is 305% for VGP and the average for all the stocks is 118%. Even if we remove yesterdays gains BBI still performed stronger than others.

As per the discussion above, it was mentioned that BBI may just be running along with the rest of the market and those stocks that had been oversold.

While I believe some of the gains would have occured to general market sentiment the current percentage gain on BBI is far greater than any of its peers. I believe this highlights what we have been discussing for the last couple of months. I.E that BBI has been massively oversold (along with BEPPA) and that the sale of assets should ensure the security of the company.

Although we are not out of the woods yet, such strong gains in comparison to the rest of the property trusts/utilities indicates to me that the market is starting to see the long term potential for BBI/BEPPA (if a sale of assets occurs). This in my opinion is also evident by the market depth/transactions over the last couple of weeks where it appears to have moved from a stock that people were buying for short term gains/trades to one where there is a buy/accumulate/hold strategy.

You're average worked out to be 118% on what many would have called high risk securities.

For comparisons sake lets look at the market movers

RIO - 52w low: $29.91, Current: $71.60, %Gain 139%
BHP - 52w low: $20.00, Current: $35.31, %Gain 77%
CBA - 52w low: $24.03, Current: $36.74, %Gain 53%
NAB - 52w low: $15.85, Current: $22.78, %Gain 44%

average - 78.25%

a sizeable difference, but not that big when considering the difference in risk.


pretty much what im saying is we still got legs in this

 

[banska bystrica]

Please see the attachment for an excel spreadsheet showing current market price, 52 week low and percentage gain.

I included both Property Trusts because they have been hit hard over their debt levels and utilities, the sector which BBI is included in.

As of yesterdays close BBI has had a 700% increase from its 52 week low, the next biggest mover is 305% for VGP and the average for all the stocks is 118%. Even if we remove yesterdays gains BBI still performed stronger than others.

As per the discussion above, it was mentioned that BBI may just be running along with the rest of the market and those stocks that had been oversold.

While I believe some of the gains would have occured to general market sentiment the current percentage gain on BBI is far greater than any of its peers. I believe this highlights what we have been discussing for the last couple of months. I.E that BBI has been massively oversold (along with BEPPA) and that the sale of assets should ensure the security of the company.

Although we are not out of the woods yet, such strong gains in comparison to the rest of the property trusts/utilities indicates to me that the market is starting to see the long term potential for BBI/BEPPA (if a sale of assets occurs). This in my opinion is also evident by the market depth/transactions over the last couple of weeks where it appears to have moved from a stock that people were buying for short term gains/trades to one where there is a buy/accumulate/hold strategy.

I agree wholeheartedly with you comments. I note you haven't included BBP in your table. I also own a few of them and am pleased with their performance. My average is a tick over 5.2c. I see them as higher risk than BBI and not necessarily higher reward, hence my smaller position in BBP.

 

[investorpaul]

I agree wholeheartedly with you comments. I note you haven't included BBP in your table. I also own a few of them and am pleased with their performance. My average is a tick over 5.2c. I see them as higher risk than BBI and not necessarily higher reward, hence my smaller position in BBP.

I typed it up pretty quick, so I may have missed a few. I will add/update later, so if anyone knows of any other stocks that should be included, let us know?

 

[Luciano]

Hi There,

Thoroughly enjoyed reading this fantastic thread over the last few months. I've bought some BEPPA, but have been trying to pick up some BBI at a good price over the last few days and the shares have just missed my buy mark a few days running... and now they appear to be running over the hill with me desperately trying to catch up with them! Of course, what happens on Monday will be anyone's guess, but I am hoping BBI gets a speeding ticket and replies in the standard way. Fingers crossed this leads to a few people taking profit and then some traders jumping on the bandwagon with some short trades, so temporarily forcing the price down so they can then long it later in the day... Do you guys reckon I might be hoping in vain? Leaks from Macquarie dudes involved in the DBCT sale, Long term holders jumping in, even funds? another green day in the US will snatch this baby from my grasp again? I worry that if I wait too long what with the impending sale of DBCT, I'll never get a good price!

 

[my03]

The discussion on this thread also got my initial attention of this stock, and I must thank all involved in here for their input.

I bought in at .108 and have been rewarded by this spike in sp, I would of bought more but i was a bit cautious as it was my first trade in a few months. I guess for now, I'll just sit on it and see what it does, I would like to add more to my portfolio at a higher price but it's currently my only holidng so I might not want to skew my portfolio heavily towards one stock.

It seems like stocks such as bbi, have a massive gap between the NAV of the stock and what the market is pricing them at. Have you guys got your eyes on other stocks that have been heavily discounted by the market? Perhaps some REITs, don't mean to go off topic, but I thought I'd ask the question after the spreadsheet by Paul was brought up.

Cheers

 

[cbrendan]

The discussion on this thread also got my initial attention of this stock, and I must thank all involved in here for their input.

I bought in at .108 and have been rewarded by this spike in sp, I would of bought more but i was a bit cautious as it was my first trade in a few months. I guess for now, I'll just sit on it and see what it does, I would like to add more to my portfolio at a higher price but it's currently my only holidng so I might not want to skew my portfolio heavily towards one stock.

It seems like stocks such as bbi, have a massive gap between the NAV of the stock and what the market is pricing them at. Have you guys got your eyes on other stocks that have been heavily discounted by the market? Perhaps some REITs, don't mean to go off topic, but I thought I'd ask the question after the spreadsheet by Paul was brought up.

Cheers

Also interested in what the bbi/ beppa faithful are diversifying their portfolios with currently.

Cheers to all holders

 

[Tysonboss1]

Also interested in what the bbi/ beppa faithful are diversifying their portfolios with currently.

Cheers to all holders

MCW is my largest holding just ahead of Beppa, But it has already recovered off it's lows of 10c to 36.5c. Still alot of upside in this stock though and it's still paying a good div.

my holdings as of friday are, from largest to smallest.

MCW
BEPPA
Sims Metal
APA
BHP
Australian automotive holdings
TOL
CBA
BBI
arrow energy
Beach petroleum
Villiage roadshow
fkp property

the first 2 make up 50% of my holding.

 

[ricee007]

have been trying to pick up some BBI at a good price over the last few days and the shares have just missed my buy mark a few days running... and now they appear to be running over the hill with me desperately trying to catch up with them! Of course, what happens on Monday will be anyone's guess, but I am hoping BBI gets a speeding ticket and replies in the standard way. Fingers crossed this leads to a few people taking profit and then some traders jumping on the bandwagon with some short trades, so temporarily forcing the price down. Do you guys reckon I might be hoping in vain?

At the moment, all markets shown on Commsec are Green.
BBI has 385 buyers buying 31.1M BBI and 42 sellers selling 2.6M BBI
BEPPA has 72 buyers buying 4.4M BEPPA and 18 sellers selling 1.5M BEPPA.

BEPPA lowest sell is above the last close, and BEPPAs highest buy is yesterdays close.


MacqCap can leak more over the weekend.

Closer to DBCT release.

Time for people to research BEPPA/BBI more over the weekend

Whilst anything could happen, I think you are being overly optimistic.

 

[jeffTH]

Also interested in what the bbi/ beppa faithful are diversifying their portfolios with currently.

Cheers to all holders

Hi Brendan

I also wonder what other BBI/BEPPA followers invest in. I am only into BEPPA but not BBI and only by virtue of this thread and my thanks to BB for his insight and favouring us with his depth of knowledge. I have a two portfolios - my 'personal' and my SMSF. My stocks in the 'personal' are virtually all resources and my SMSF more diversified. The stocks are -
Personal
AXM Apex Minerals
BAU Bauxite Minerals
BEPPA
CCG Citadel Resources
EQN Equinox Minerals
JML Jabiru Minerals
MAH Macmahon Group
MGX Mt Gibson Iron
PLA Platinum Aust
UMC United Minerals
SMSF
APZ Aspen Group
BEPPA
HST Hastie Group
LEI Leighton Holdings
MCP McPhersons
MGX Mt Gibson Iron
RIO
SKI Spark Infrastructure
UGL United Group
WOW Woolworths

Good luck to all holders and I am hoping to hold for the long term and eagerly await resumption of dividend payments - 4.35 cents/share accrued by end June 2009.

 

[Tiles]

Yes, thanks BB.

While I hope we have all conducted our own research, It was definatly your original comments that pointed me in the direction of beepa, So far so good.

Even if this current rise is just a flash in the pan and we do drop back on monday (which I hope we do) I feel very confident holding onto this stock, I am on board for the big win on this one.

I would like to add my thanks to BB. His analysis and commitment to BBI caused me to reverse my pessimism. I had given up on the company. After reviewing the assets and prospects for the company I decided to buy more to reduce my overall average price. I'm now less poor (on paper), thanks to this thread.

 

[Mitsimonsta]

I am going to diversify into REITs now for the time being. My portfolio is massivley overweight on BEPPA and I need to get more equity in other market sectors.

I have posted this elsewhere, Ricee007 has probably seen it already. It's more of my own thoughts and concerns about my holdings, and my plan to improve it in line with my personal goals and my own 'rules' of investing. It is not to be construed as financial advice.

I was asked:

Are you saying you think BEPPA isn't a good investment anymore at this price? or did I read that wrong?

I am most certainly not saying that. It's still less than 20% of redemption value, and it still has legs to run quite a long way yet.

I am saying that for me, my portfolio, my investment strategy and thus my financial goals, it does not make sense for me to continue investing in BEPPA at this time. I will explain this further below.

For anyone ENTERING into BEPPA, I believe it is still a good time. The stock is massively undervalued in my opinion, so buying in now is still not a bad option. Would have been better 2 weeks ago though. It still has the potential to run a long way and make excellent profits.

Why am I ceasing to buy BEPPA? As far as my investment is concerned, the train has left the station. I didn't quite expect it yet, I had figured I had until early June to get my money in. Yesterday's jump was a little unexpected. Investing more in BEPPA now is akin to throwing money at a train leaving the station - you won't get much inside the carriages. It's flown the coop already.

My average buy on these is 8.36c, it's now WELL past 100% over that level, and buy buying in at that price for the value I get from it is about half of previous buys. All it will do is raise my average buy price, and take money away from other investments. It's also over 65% higher than my last buy price (10.5c) and at that level, further buying does not represent value to my portfolio.

Here's my portfolio at market close (post-auction) on the last 2 days:

Thursday 07/05/2009

Friday 08/05/2009

As you can see, I have so many units of BEPPA now that a small increase in SP has a massive effect on my portfolio equity mix. As you can see on the pie charts, BEPPA is massively overweight on the equity mix.

I have had problems where I have purchased more FXJ and then the stock went down, however it impacted on my portfolio in a very negative way because of the percentage that FXJ makes up of my portfolio.

Whereas earlier this week my strategy was to continue accumulating BEPPA, now it's not really in the best interests of my portfolio. I have to buy against it (and FXJ) in order to bring their percentages down. And BEPPA is only going to go higher overall now, so I am going to have a real problem when it hits 25-30c. It will represent about 60% of my portfolio, and I will be at the mercy of it's SP. Mind you, I cannot see it falling into red anytime soon.

Once again, investment strategy has to be fluid and change in order to respond to market conditions, or you will have your heart on buying a stock when you really shouldn't.

Right now, I see myself with 3 main investment choices.

1. Continue investing into the market
2. Start investing into a different area - managed fund, term deposit, buy into a business or my own home
3. Save cash and/or pay down debt

Right now, with sharemarkets still at a point where I call them undervalued and a heap of excellent 'Capital Gain potential' stocks out there, I am going for investing more into the market. Interest rates are low and I can service my debts easily. I also do not have enough cash to dump into a managed fund or term deposit - typically $5K for an opening investment.

So, now I have 4 choices:

1. Invest in BEPPA (still a great option) or even FXJ/CBA
2. Consolidate position in my smaller holdings (buy more of them, cost average. ORG, MAP & SHL is what I am talking about here)
3. Diversify at market sector level and buy other companies in sectors I already own (spread risk within a sector)
4. Diversify against companies and sectors I already hold by buying into new market sectors (spread risk within the market)

Option 1 is not really an option, except for maybe CBA. I do not like holding more than 25% of my entire portfolio in one stock. At 6 holdings I should be 30% on one stock at a maximum. Even though I was over 25% on BEPPA and willing to invest more, now the price has gone up a very significant amount it is alot less attractive. Basically, at my buys previously, the SP was way to attractive to NOT buy in.

Option 2 is a good one, except that I will be missing out on a seed buy on a couple of really decent yet underpriced stocks that I can dollar-cost-average later. It also slows exposure to other market sectors.

Option 3 is worthwhile, except that market sectors tend to follow each other. Not such a bad idea in a bigger portfolio in that once you have a number of stocks you can spread the risk within the sector. But with sectors outstanding (property and mining - big ones) and a small holding, it's better to hedge against any one sector. So option 4, at this time, is what I am going to do.

VPG (for CG) is more than likely my next target. Low price, very large growth potential. Had some decent rises in SP but it really has not fired up yet like I expect it to. WDC (for divs) and MOF (balanced CG/Div) are another two REITs that I am thinking about. Which one I buy will more than likely be deceinded by SP movements when I am ready to open a position in one of them.

Mining is another sector I do not have in my portfolio right now, although previously had BHP, RIO & FMG. LGL is probably my first target. I also like FLX, and would be almost remiss of me not too get some BHP and RIO back into my portfolio at one stage.

Energy is my final target. Anything wind and/or gas is on my hitlist. I hold ORG and wish to consolidate my holding there. There are a few other stocks that I am researching now that look attractive on the surface but I am unsure regarding the real value of them yet.

Sorry, it's a long post, I will shut up now.

 

[banska bystrica]

I have never been one for the diversification theory however I acknowledge it is possibly a "safer" option for investors.
If you are looking for some mining stocks, two that I own that are massively undervalued in my opinion are:
Indophil (IRN)
Intrepid (IAU)

Please, as always, do your own research.

Disc. BBI/BEPPA represents 88% of my current portfolio. I will not sell either until they are fair value according to my analysis.

 

[w.m.buch@bigpond]

Mitsimonsta; Ive had my own businesses for the past 30 years, and rarely make more than 30% on capital invested after everything paid (inc wages to me),sometimes you make a loss. I look at BBI as another business that I own, and if it does manage to succeed in staying afloat to the dividend paying stage, I expect to get far more than 30% on initial capital invested ,every year, from my investment. Obviously there are substantial risks in this strategy but owning your own business comes with substantial risks and a lot of headaches and heartache. BBi to me represents an opportunity to have a passive business with an exceptional return on initial capital invested.
If BBI can hold 50% of DBCT and continue to hold NGPL,they alone should contribute FCF of approx $200m per year this equates to dividends of more than 8cents per share. Thats before everything else is taken into consideration. Large asset sales are the key and if 50% of DBCT and 100% of PD Ports goes for reasonable prices I reckon its in the clear.
All I am really saying is that the dream of owning your own business is not as great as it may seem.
I hold BBI for long term and BEPPA for shorter term.These are 100% of my portfolio. P.S. I dont mind a bit of risk!!!

 

[investorpaul]

Disc. BBI/BEPPA represents 88% of my current portfolio. I will not sell either until they are fair value according to my analysis.

Wow thats a huge percentage of your portfolio.

However i do see your logic, why would you invest in anything else (at this point in time) if your research and opinion suggests there is potential for a 1000% gain (based on your purchase price of sub 10c). Since the market bottomed the only stock I have bought is BBI and BEPPA.

On another note, any predictions on where BBI and BEPPA open today? it will definately be interesting