ELD - Elders Limited
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Does anyone have thoughts on this stock? The recent sales, capital raising & yearly reports have all been announced & in 26 minutes of the trading halt being lifted the share dropped 42% in 26 minutes. 
The company has strong brand loyalty in a tough market segment & forecast for 2010 are positive. So has the market over reacted? Thoughts?
The company has strong brand loyalty in a tough market segment & forecast for 2010 are positive. So has the market over reacted? Thoughts?
skc
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Does anyone have thoughts on this stock? The recent sales, capital raising & yearly reports have all been announced & in 26 minutes of the trading halt being lifted the share dropped 42% in 26 minutes.
The company has strong brand loyalty in a tough market segment & forecast for 2010 are positive. So has the market over reacted? Thoughts?
The magnitude of the fall isn't that much of an over-reaction.
Last trade price $0.39 and market cap ~$180m (820m shares on issue).
Now raising $550m at $0.15, equating to 3666m new shares.
So the theoretical price is something like ($180 + $550) / (820 + 3666) = ~16-17c.
The market is already giving ELD a higher valuation as the company is deemed to be saved from going belly up.
Luckily... I hold a very small position of ELD (47 shares!) and can paritcipate in the SPP for up to $20K. Let's hope there is no scale back based on existing holding!
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The magnitude of the fall isn't that much of an over-reaction.
Last trade price $0.39 and market cap ~$180m (820m shares on issue).
Now raising $550m at $0.15, equating to 3666m new shares.
So the theoretical price is something like ($180 + $550) / (820 + 3666) = ~16-17c.
The market is already giving ELD a higher valuation as the company is deemed to be saved from going belly up.
Luckily... I hold a very small position of ELD (47 shares!) and can paritcipate in the SPP for up to $20K. Let's hope there is no scale back based on existing holding!
0.39*820 = $319M Mkt cap
Think you did a fat finger there
But I'll let you sell them to me for 18c
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They sold their two most profitable interests last financial year. Their entire stake in AAC and another chunk of Elders Bank to BEN. Look elsewhere IMHO!
DYOR
DYOR
skc
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0.39*820 = $319M Mkt cap
Think you did a fat finger there
But I'll let you sell them to me for 18c
Oops.. lucky I wasn't the re-capping ELD. Just took the market cap number from today rather than last week.
Anyway, SPP still looking good
Always a catch 22 isn't it? They said they won't sell the Futuris auto parts before the auto market improves. Why would you want to sell it then if the market is improving?
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Even with Market Cap of 39 cents a share. Its still an ex rights price of 19-20 cents so why is it trading at 25 cents a shares?
Probably because the market likes the capital raising, thinks it has fixed ELD's problem and is valuing the company's future prospects accordingly.
Disc: Not holding.
Chart wise what do you guys think? Significant gap down but a strong close (in respect of the daily low) on good volume. Seems like there could be either a quick bounce trade for a full or partial gap fill or the alternative scenario of an island top reversal and a resumption of the down trend.
I bought some on close in the hope of the former.
I bought some on close in the hope of the former.
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I read a commentary from Lincoln Stock Doctor about ELD which is interesting
Disclaimer : DNH
" Analyst's summary
http://client.lincolnindicators.com.au/sg_current/index.html
ELD is classic case that highlights the importance of applying Lincoln’s Golden Rule No. 1 and reviewing a company’s Financial Health prior to making any investment decision. On 1 September 2009, ELD was suspended from the ASX official quotation for failure to lodge their FY09 annual results and only began trading again on 7 September 2009 following late lodgement. The company has performed dismally in the previous three reporting periods, with EPS declining since 1 July 2007. Most significantly, ELD’s Financial Health has deteriorated from Strong to Marginal in this time. The company has high gearing levels and continues to exhibit weakness across its Profit and Loss and Cash Flow statements. Although, ELD is yet to have their FY09 annual results analysed within Stock Doctor, it is evident that the company’s Financial Health will not improve.
Since ELD’s Financial Health was re-classified from Strong to Early Warning in April 2008, the company’s share price has declined by 81.52 per cent. The negative sentiment on the stock is expected to persist with the company announcing another net loss for the full-year FY09 due to a 20 per cent drop in revenues for the period, as a result of lower contributions from all operating divisions except financial services. On 4 September 2009, ELD announced a comprehensive recapitalisation and refinancing strategy involving an equity raising of up to $550 million and asset sales worth $700 million. While this may be a short-term solution, the company displays an unacceptable level of Financial Health. Investors may be wise to seek alternate investment opportunities."
Disclaimer : DNH
" Analyst's summary
http://client.lincolnindicators.com.au/sg_current/index.html
ELD is classic case that highlights the importance of applying Lincoln’s Golden Rule No. 1 and reviewing a company’s Financial Health prior to making any investment decision. On 1 September 2009, ELD was suspended from the ASX official quotation for failure to lodge their FY09 annual results and only began trading again on 7 September 2009 following late lodgement. The company has performed dismally in the previous three reporting periods, with EPS declining since 1 July 2007. Most significantly, ELD’s Financial Health has deteriorated from Strong to Marginal in this time. The company has high gearing levels and continues to exhibit weakness across its Profit and Loss and Cash Flow statements. Although, ELD is yet to have their FY09 annual results analysed within Stock Doctor, it is evident that the company’s Financial Health will not improve.
Since ELD’s Financial Health was re-classified from Strong to Early Warning in April 2008, the company’s share price has declined by 81.52 per cent. The negative sentiment on the stock is expected to persist with the company announcing another net loss for the full-year FY09 due to a 20 per cent drop in revenues for the period, as a result of lower contributions from all operating divisions except financial services. On 4 September 2009, ELD announced a comprehensive recapitalisation and refinancing strategy involving an equity raising of up to $550 million and asset sales worth $700 million. While this may be a short-term solution, the company displays an unacceptable level of Financial Health. Investors may be wise to seek alternate investment opportunities."
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This must have come horribly close to the administrators desk.
Even with the recapitalisation it's lenders are still calling the shots as to when dividends can start to flow to shareholders.
Even with the recapitalisation it's lenders are still calling the shots as to when dividends can start to flow to shareholders.
Luckily... I hold a very small position of ELD (47 shares!) and can paritcipate in the SPP for up to $20K. Let's hope there is no scale back based on existing holding!
How do you know that there going to have SPP for this share? I bought the share, but didn't receive any notice on SPP.
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How do you know that there going to have SPP for this share? I bought the share, but didn't receive any notice on SPP.
Check out the Elder's Offer website: www(dot)elders-offer(dot)com(dot)au/keydates/
Apparently I need to have several posts before embedding a link.
Pete.
Here's the announcement about Elder's capital raising.
Includes an SPP of up to $20,000 which is at the upper end of such issues these days.
http://www.asx.com.au/asxpdf/20090904/pdf/31kkhdx52hbpv0.pdf
Includes an SPP of up to $20,000 which is at the upper end of such issues these days.
http://www.asx.com.au/asxpdf/20090904/pdf/31kkhdx52hbpv0.pdf
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How do you know that there going to have SPP for this share? I bought the share, but didn't receive any notice on SPP.
I believe the record date for being eligible for SPP rights was 4th Sept. The trading was halted and then the share price dived by 37% or so. It rose slightly up today but all are XR status.
Please double check with ASX and / or company website.
DNH
I'm taking up the offer for all I can get....considering the share price today is still around 0.23 then why would you expect it to be less when the new shares are placed...?
Edit: I probably should elaborate a bit...consider this: 24600 shares purchased a month ago for 0.405
Take up the offer of $20k of shares @ 0.15 = 133,333 new shares
giving and average buy price of just under 0.19.
At todays price this amounts to a profit of $6300 aprox
A bit better than the original - $4300 loss currently....!
It's now trading all the latest news and announcements re: the refinance so it's trading at a premium to the offer...lucky you who has the chance to make a decent profit for your troubles of being a ELD shareholder...you should think long term too....
Also, unloading now you need to consider what loss or profit you have made thus far and don't count on being able to get the full $20k of new shares as I feel it will be scaled back as people realise they stand to make a motza.
The first few days of trading the new shares will be hectic as short term thinkers will bail out but the sensible ones will stick around and make the big profits.
Just my opinion and you need to consider your circumstances by yourself and not rely on my thoughts as part of your investing plans.
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I have already applied for my $20000 entitlement, just in case the issue closes earlier than the closing date. One point I noticed from the propectus was the entire $150 million under the SPP would be taken up if only 20% of shareholders take up their quota of $20000. I would expect a bigger percentage to take up their entitlement, although many smaller shareholders will only take up a proportion, and American shareholders aren't allowed to participate. In other words, more than likely, applications will be scaled back on the basis of oversubscriptions received. You are entitled to apply for additional shares, but will that give you the possibility of a bigger allocation? It all depends on how the company sorts it out which hasn't been spelt out in the propectus. All in all though the issue is worthwhile taking up, it's money for jam! Regards Kooka
The closing date of the SPP is locked in and the raising has to be voted in at the EGM on 15 Oct before anything will go ahead.
It's my undrstanding that if you apply for more than $20K and the SPP is NOT oversubscribed then you would receive shares on a pro rata basis. if it is oversubscribed then you wiull be scaled back in a relative manner.
I will be subscribing for more than $20k.....but not until after the EGM. They cannot close it early.
It's my undrstanding that if you apply for more than $20K and the SPP is NOT oversubscribed then you would receive shares on a pro rata basis. if it is oversubscribed then you wiull be scaled back in a relative manner.
I will be subscribing for more than $20k.....but not until after the EGM. They cannot close it early.
