BNB - Babcock & Brown

[dj_420]

A number of brokers have $36 targets on BNB, I personally will be waiting for BNB to break old highs then sell. Still a lot of room to move.

This stock has recovered very well from correction.

 

[roland]

A number of brokers have $36 targets on BNB, I personally will be waiting for BNB to break old highs then sell. Still a lot of room to move.

This stock has recovered very well from correction.

Yes, I agree that it has further to go - but isn't it better to grab a few profits on a good rise, then buy back on a dip. It just can't keep going up 2% per day forever......

 

[dj_420]

Yes, I agree that it has further to go - but isn't it better to grab a few profits on a good rise, then buy back on a dip. It just can't keep going up 2% per day forever......

Lol, yes I agree with that. I have great entry on BNB at 20.40 from correction so I am quite willling to hold for now.

 

[roland]

Yes, I agree that it has further to go - but isn't it better to grab a few profits on a good rise, then buy back on a dip. It just can't keep going up 2% per day forever......

I wonder if this is the dip I was waiting for? Anyone have thoughts on how far BNB will fall? A chart on BNB would be nice with some commnets. Thanks

 

[barnz2k]

nothing in here for a week.
Wondering how well they will hold up today if there is a big fall following the US. They got hit hard last time unfairly, but the US fall isnt a direct blame on the industry this time so maybe not as harsh?

 

[nikkothescorpio]

I would be amazed if BNB isn't one of the most heavily sold off stocks on the ASX today.

Right or wrong it will be clobbered today as its very US sensitive - mayabe less so with the sell off of some of its US exposure that i believe was annouced recently. I'd be looking for it to be back at the $24 mark during this week.

 

[TheAnalyst]

BNB is looking really good....should see some good rise from here.....it is coming into its season now......and its earnings is still growing from the last couple of announcements...its even had its ABC wave hello..

 

[roland]

BNB is looking really good....should see some good rise from here.....it is coming into its season now......and its earnings is still growing from the last couple of announcements...its even had its ABC wave hello..

Yes, it's a pity the dividend return sucks, otherwise I would hold longer. I am happy playing the swings. With the upside potential there is almost no risk. BNB is one hell of a great stock

 

[L plates]

BNB is looking really good....should see some good rise from here.....it is coming into its season now......and its earnings is still growing from the last couple of announcements...its even had its ABC wave hello..

Yeh, I agree. As a new student of EW I actually took this trade believing that the (a) (b) (c) has just completed wave (4) and is now going on to wave (5). I'm thinking that up to about $35 is possible, there may be some resistance at $30. Should be interesting day on Monday as Friday's vol was very high and it closed near its high for the day

748 - 2794 4:10:43 pm 2900 121,237 4 $3,515,873 47
A good strong purchase at $29.00 after the close.

Cheers

 

[michael_selway]

Yeh, I agree. As a new student of EW I actually took this trade believing that the (a) (b) (c) has just completed wave (4) and is now going on to wave (5). I'm thinking that up to about $35 is possible, there may be some resistance at $30. Should be interesting day on Monday as Friday's vol was very high and it closed near its high for the day

748 - 2794 4:10:43 pm 2900 121,237 4 $3,515,873 47
A good strong purchase at $29.00 after the close.

Cheers

Yeah its not bad, maybe getting a bit expensive if u look at short term

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 115.4 163.8 193.9 216.9
DPS 36.0 50.7 59.6 67.8

thx

MS

 

[TheAnalyst]

Well, it broke $30 today, and once again the earnings forecasts are to be ignored on this stock, as they are always out doing something new, so the earnings forecast cant be taken as gospel.....same happens to MacQuarie Bank.

 

[L plates]

Yep, it looks all good to me.
To me the push above $30 confirms a wave (5)
All other indicators that I use are looking strong.
First target (after next resistance of $32.40) around $32.70 Any thoughts?

 

[TheAnalyst]

To me all evidence points to a preAugust price recovery, and then to break its previous share price high.

 

[ehwebba]

good buying BNB now i thinks, 27ish seams like a bargain, looks like 35 in the near future , i know that ill be in there. sounds interesting eh

 

[Mr_T]

What is going on with this share?

It seems to keep dropping.

Most frustrating thing is that we hear very little from this firm, except when they have an announcement to make about an acquisition, etc.

 

[profithunter]

Speculation a major australian bank is about to announce sub prime losses

"Trinh added that currency markets were unsettled Wednesday, with the Australian dollar rallying against the U.S. dollar in early trading before selling off on market talk that a major Australian bank could be about to announce losses related to investment in U.S. sub-prime mortgage securities."

I dont know about this - BNB said they dont have exposure

 

[Mr_T]

Speculation a major australian bank is about to announce sub prime losses

"Trinh added that currency markets were unsettled Wednesday, with the Australian dollar rallying against the U.S. dollar in early trading before selling off on market talk that a major Australian bank could be about to announce losses related to investment in U.S. sub-prime mortgage securities."

I dont know about this - BNB said they dont have exposure

What? Are you saying there's a risk BNB has material sub-prime exposure, despite their denials to the contrary?

 

[roland]

No matter where you look, which broker you reference or which report you read - BNB is an absolute bargain.

Even last night when I received my Comsec report, they are suggesting that BNB is an extremely rare chance not to be missed. The target 12 month target now stands at $35 with an expected 12 month SP earnings forecast exceeding 30%

In my opinion, and fall now is an opportunity to grab some more stock. If necessary, I'll be selling other non performing stocks to follow BNB down. It's a pity that the dividend return is not so good

BNB is tied to the bad taste of sub prime and is put into the same box as others in the financial tagged stocks and suffers accordingly. Funny thing is, BNB is relatively un-exposed to sub prime lending and probably shouldn't be punished as badly as it has been.

The BEI satellite is being seen as a peripheral failure and got punished. Coinmach seemed like a pretty good investment to me - but got punished again today, I guess share holders don't like seeing money being spent which is pretty odd when you hold shares in a company where this is their core business.

The market responded a little better with the Melbourne Children's Hospital deal.

I didn't check, but was told by a trader friend of mine that Macquarrie is being treated similarly.

IMO BNB is a buy, buy, buy - there is no need to take a loss on this baby.

 

[Mr_T]

No matter where you look, which broker you reference or which report you read - BNB is an absolute bargain.

Even last night when I received my Comsec report, they are suggesting that BNB is an extremely rare chance not to be missed. The target 12 month target now stands at $35 with an expected 12 month SP earnings forecast exceeding 30%

Any chance of cutting and pasting an important paragraph or two of this report? Would be much appreciated if you could.

 

[roland]

Any chance of cutting and pasting an important paragraph or two of this report? Would be much appreciated if you could.

Here you go:

Opportunity to profit from fear

Australian investment banks have underperformed the market since the onset of the subprime turmoil. Sentiment has been dragged down by record losses in US and European banks. This is an extraordinary buying opportunity for some stocks in this sector.

Investment banks around the world have been hit by a crisis of confidence. US banks have so far written off over US$50B worth of mortgage-related losses in 3Q, and the market is expecting further write-downs over the coming quarters, up to a possible tune of US$200B if not more. The
trouble is no one, including the banks themselves, can quantify the full extent of their losses with any certainty, as the market for these investments has all but dried up.

With so much uncertainty hanging over the market, investors appear to have lumped all investment banks into the same boat, and we believe this is an opportunity to profit from fear. Most Australian investment banks, particularly Allco Finance (AFG) and Macquarie Group (MQG), have been
oversold even though they have little or no direct exposure investments that are primarily responsible for the massive write-downs in Europe and the US.

If anything, most in the sector have issued relatively positive outlooks, although these were laced with caution. The reason why AFG, MQG and Babcock & Brown (BNB) are relatively insulated from the sub-prime mess is because they mostly deal with physical assets. For instance, a large part of
BNB and MQG’s business is based on buying and “repackaging” infrastructure assets, while AFG is predominantly into leasing aircrafts and ships.
This is not to say their businesses are without controversies. BNB and MQG have received criticisms over underperforming satellite funds. This has prompted BNB to propose buying over Babcock & Brown Environmental Investments (BEI). The offer is valued at $0.508 per BEI share, but this is
unlikely to please all, since some paid $1.75 or more at its IPO.

The perception of the potential lack of acquisition opportunities has also weighed on the investment banks. However, we would not be surprised to see a pick up in acquisition activity, as there are still plenty of good infrastructure assets globally that are there for the taking.

Since all three investment banks rely heavily on overseas credit markets to fund activities, investors have been worried that the credit turmoil would impact their bottom lines. Although the cost of debt has risen worldwide, the banks do not seem to have much trouble raising funds. Last week, MQG
successfully closed a loan syndication healthily oversubscribed.

Meanwhile, MQG faces other challenges. A large portion of its revenues comes from share marketrelated activities, such as brokerage and M&A advisory and underwriting. In revealing its record $1B 1H08 profit, MQG said that its profit was boosted by unsustainably strong equity markets.

While we have factored this into our model, we note that MQG is well placed to profit from the booming Asian economies and there is likely to be continued strong demand for its M&A advisory services. BHP Billiton’s bid for Rio Tinto could spark more consolidation in the industry, while the Utilities sector is another that could experience a pick up in merger activity in the months ahead.