BNB - Babcock & Brown
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Yes, in my opinion, it is a very exciting chance to grab some more stock if you have the $$$'s. I did this last time it came down to this level and sold as it started climbing again. My method with BNB is to play the dollar movements and buy as it falls. It takes a lot of my capital, but I am confident that any fall is only temporary.
This is just my trading style with this stock and not a recomendation - please do your own research
RichKid
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As a caution, consider the fact that some stocks can wallow far below their perceived 'value' or broker valuation, just as much as they can fall far below apparently strong technical 'support'. Anything can happen.
As someone studying to be a technical trader, I will be observing the nature of the test and response of the market as we travel towards those recent lows- an area, presumably, that is considered to be a 'value' buying zone as evidenced by the strong price rejection at those lows (consider some of motorway's descriptions of Wyckoff style tests in his various posts).
Market participants can and do panic and sell assets at any price when they finally succumb to the weight of their losses, not knowing what else to do they sell in grief and misery. Whether this is rational behaviour or not matters little, but it is common place as many stock charts will show (also see the comments by ASF posters in the major stock threads (with the most participants) here on ASF and compare their sentiments to the price charts- merely anecdotal but useful).
Elliott Wave theorists, especially those at Elliott Wave International, and some of the posters here on ASF use sentiment indices as a guide as well, although I'm unaware of any broadbased surveys or accurate sentiment indicators for the Australian Market. So, IMHO what counts is shown on the stock chart.
It may well be that the powerful buyers who move markets have decided that their buy level is well above the August lows so the nearby price levels are worth watching. OTOH they may believe that although it is below fair value they can get it even cheaper than at the recent lows. This is a highly liquid stock, especially after the release of more shares since listing, and worth studying to learn about how markets trend.
As someone studying to be a technical trader, I will be observing the nature of the test and response of the market as we travel towards those recent lows- an area, presumably, that is considered to be a 'value' buying zone as evidenced by the strong price rejection at those lows (consider some of motorway's descriptions of Wyckoff style tests in his various posts).
Market participants can and do panic and sell assets at any price when they finally succumb to the weight of their losses, not knowing what else to do they sell in grief and misery. Whether this is rational behaviour or not matters little, but it is common place as many stock charts will show (also see the comments by ASF posters in the major stock threads (with the most participants) here on ASF and compare their sentiments to the price charts- merely anecdotal but useful).
Elliott Wave theorists, especially those at Elliott Wave International, and some of the posters here on ASF use sentiment indices as a guide as well, although I'm unaware of any broadbased surveys or accurate sentiment indicators for the Australian Market. So, IMHO what counts is shown on the stock chart.
It may well be that the powerful buyers who move markets have decided that their buy level is well above the August lows so the nearby price levels are worth watching. OTOH they may believe that although it is below fair value they can get it even cheaper than at the recent lows. This is a highly liquid stock, especially after the release of more shares since listing, and worth studying to learn about how markets trend.
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Wow, what a response Richkid, makes me sound very simplistic. I am an emotional trader - wouldn't know the first thing about charts
What I do know is how a stock trades almost every second of the day - since my work allows me to have my eyes glued to the chart - I could almost tell you about every trade that was made with all of my stocks on my watchlist.
This develops into quite an aptitude in picking up what is happening from a trade by trade perspective - totally non technical! Now adding my own research, reading every snippet of news, soaking up all the broker consensus I can find of the stock in question, you start to develop a "feeling". Now if I could combine the technical side with this - wow, I think I would have it all.
In my mind, there is no way known to man, short of war, famine or natural catastrophe that will stop BNB from going above $30 in the not too near distant future. How much I can capitalise on this is determined by how much further it will drop and how much of some other dog stock I am willing to let off it's leash
My opinions only - OK
RichKid
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Wow, what a response Richkid, makes me sound very simplistic. I am an emotional trader - wouldn't know the first thing about charts
What I do know is how a stock trades almost every second of the day - since my work allows me to have my eyes glued to the chart - I could almost tell you about every trade that was made with all of my stocks on my watchlist.
This develops into quite an aptitude in picking up what is happening from a trade by trade perspective - totally non technical! Now adding my own research, reading every snippet of news, soaking up all the broker consensus I can find of the stock in question, you start to develop a "feeling". Now if I could combine the technical side with this - wow, I think I would have it all.
In my mind, there is no way known to man, short of war, famine or natural catastrophe that will stop BNB from going above $30 in the not too near distant future. How much I can capitalise on this is determined by how much further it will drop and how much of some other dog stock I am willing to let off it's leash
My opinions only - OK
Hi roland,
We are actually using different methods to make money from the market (or lose it as I often do!), as long as we come out ahead in the long run and meet our investment goals then all is well! I'm not disparaging your method but merely describing a bit of mine. It's good to avoid another fundamentals vs TA debate as there are many posts on that on ASF already.
There are technical traders watching BNB too so my post might awaken a bit of interest in them. I do look at fundamentals as a filter when looking at the risk profiles of co's so I have an interest in some broker reports. Most long term investors don't use stop losses so the levels I've described above are less relevant to these investors- but very important to technicians who use stops. On a personal note, I'm in no way suggesting that you are prone to buy or sell in an emotional mess or through ignorance; many people in the markets (including exponents of TA) do panic but I can see from you posts that you are likely to make a decision carefully after due consideration and according to your style.
All the best with BNB guys, whichever way you trade it, always enjoyable to discuss stoxxxxx!!!
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RichKid, I didn't consider myself disparaged in any way and hope you could summarise your thoughts in a less technical way. I've now got $90K tied up in BNB, so I am all ears (or eyes in this case)
RichKid
PlanYourTrade > TradeYourPlan
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RichKid, I didn't consider myself disparaged in any way and hope you could summarise your thoughts in a less technical way. I've now got $90K tied up in BNB, so I am all ears (or eyes in this case)
glad that's ok....guess it's hard for a technician to be less technical, I do tend to rant a bit. I'm basically looking for this counter-trend on the weeklies and monthlies to end so that I can go long, currently looking for evidence that the ct had ended. All the best with your position!
michael_selway
Coal & Phosphate, thats it!
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Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 115.4 165.0 195.8 221.8
DPS 36.0 50.7 59.6 67.8
Not too bad actually
It's very good.
Only problem with forececasts are that they are just that: forecasts. In reality the future is never that predictable. Yes, the near future is fairly predictable, but the further away something is in time, the less predictable it becomes.
It's incredible. The rest of the market goes down, BNB goes down with it. The market goes up, BNB hardly moves.
I wonder if there's something they are hiding. The official forecast figures are all sugar and spice, yet the downward trend of the share price indicates that some people might know something we don't (I am suggesting this as a possibiliy, not a certainty).
I wonder if there's something they are hiding. The official forecast figures are all sugar and spice, yet the downward trend of the share price indicates that some people might know something we don't (I am suggesting this as a possibiliy, not a certainty).
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Hang in there Mr T, there are knowns that are known, some uknowns that are known and some unknowns that remain unknown or something like that.
Roland,
Are you trying to tell us something that you know that we don't? If so, could you give us a hint?
Yeah, disappointing performance today.. It usually follows the market, or at least does what MQG does..
There was some negative news on one of their investment arms, and the bailout of their environmental fund.. that's probably what is holding them back at the moment unfortunately.
There was some negative news on one of their investment arms, and the bailout of their environmental fund.. that's probably what is holding them back at the moment unfortunately.
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Mr T, if you read back a page where I posted the Aegis report, you will notice that there is an expected weakness right now - even down to a low of $24.60. Until the SP consolidates around this level (or even lower) then you would expect some weakness and volatility.
I would agree with the Aegis research that we are sitting in a good opportunity for accumulation for longer term growth. Right now is probably not the time for short term trading.
Just my opinion OK
Yes, you are right. Just that I still have bitter memories of investing in ION a few years back, where the directors kept coming out with "everything's great" when it clearly wasn't.
Anyway, it's way up now compared to earlier on today, so that is a relief.
BTW, i'm not a short term investor, but short term downward fluctuations still hurt like hell.
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I'm a short term investor as well and sold some BNB at $26.00. If the stocks I hold go backwards - then I become a long term investor
According to this article (by the great Alan Kohler) some of the shareholders of BNB's spin offs are unhappy with the amount those spin offs pay BNB in management fees.
This raises a few issues:
a) What portion of BNB's profit is from management fees from companies it has a minority interest in (ie spin offs)?
b) To what extent is that portion of the profit in jeapordy from other shareholders of those spin offs taking actions like these ones are?
These are very important issues.
Here is the article
http://www.businessspectator.com.au...cash-cow-9EVWV?OpenDocument&alerts&loc=center
Kicked by a cash cow
The attack by London hedge fund Pendvest Capital on Babcock & Brown Capital (BBC) is a wake up call for both Babcock and Macquarie Bank about the fees they pull out of their infrastructure funds.
Not that hedge funds like Pendvest and is parent Capvest don’t usually have some pretty ritzy fees themselves, of course.
Pendvest was founded by County Cavan-born Seamus Fitzpatrick, and has now bought 5.21 per cent of BBC.
Yesterday Pendvest called an extraordinary general meeting of shareholders to vote on a return of capital, the sale of its major assets and/or the winding up of the fund, as well as the renegotiation of its management agreement with Babcock & Brown.
It’s all rather shocking and inconvenient for the happy fee-merchants at Babcock. If vulture hedge funds start spoiling the party by demanding wind-ups, where will it end?
Seamus Fitzpatrick claims that shareholders in BBC have had a minus 10 per cent return from their investment since the fund went public in 2005, while the ASX/S&P 200 index has grown by 69 per cent.
At the same time Babcock & Brown has apparently pulled $122 million in management fees out of the fund, having put in $200 million at the beginning – a return on investment of 61 per cent over two years.
In a scathing letter to Babcock & Brown management, Fitzpatrick points out that BBC shares are trading at less than half analyst valuations of the business based on a break-up. The stock was trading this week at $4.45, while Credit Suisse recently valued the assets at $11.50 per share.
Yesterday’s notice of meeting from BBC contains three key resolutions: a capital reduction of $2.13 a share and capital return of the same amount, or $425 million; the “sale, IPO or spin-off of the company’s investments in Eircom (the Irish telco) and Golden Pages (the main Israeli directories business) and/or the winding up of the company”; the renegotiation of the terms of the “preferred adviser agreement” with Babcock & Brown.
BBC owns 57.1 per cent of Eircom, in the books at $448 million, and other “associates of Babcock & Brown own another 7.9 per cent. The rest of the company is owned by former employees through a share ownership trust.
By the way, yesterday Eircom put a proposal to the Irish Government to split itself into two divisions – retail and wholesale. It’s a bit ironic because Australia’s telco, Telstra, is fiercely resisting the same thing.
Anyway, the appearance of Seamus Fitzpatrick’s fund on the BBC register demanding the sale of Eircom and/or the winding up of the company is a fascinating development for all infrastructure funds.
There would be many of them, especially those owned by both Babcock and Macquarie, where the fees paid to the manager ensure that the net asset value of the fund is less than the market value of the assets inside it.
This raises a few issues:
a) What portion of BNB's profit is from management fees from companies it has a minority interest in (ie spin offs)?
b) To what extent is that portion of the profit in jeapordy from other shareholders of those spin offs taking actions like these ones are?
These are very important issues.
Here is the article
http://www.businessspectator.com.au...cash-cow-9EVWV?OpenDocument&alerts&loc=center
Kicked by a cash cow
The attack by London hedge fund Pendvest Capital on Babcock & Brown Capital (BBC) is a wake up call for both Babcock and Macquarie Bank about the fees they pull out of their infrastructure funds.
Not that hedge funds like Pendvest and is parent Capvest don’t usually have some pretty ritzy fees themselves, of course.
Pendvest was founded by County Cavan-born Seamus Fitzpatrick, and has now bought 5.21 per cent of BBC.
Yesterday Pendvest called an extraordinary general meeting of shareholders to vote on a return of capital, the sale of its major assets and/or the winding up of the fund, as well as the renegotiation of its management agreement with Babcock & Brown.
It’s all rather shocking and inconvenient for the happy fee-merchants at Babcock. If vulture hedge funds start spoiling the party by demanding wind-ups, where will it end?
Seamus Fitzpatrick claims that shareholders in BBC have had a minus 10 per cent return from their investment since the fund went public in 2005, while the ASX/S&P 200 index has grown by 69 per cent.
At the same time Babcock & Brown has apparently pulled $122 million in management fees out of the fund, having put in $200 million at the beginning – a return on investment of 61 per cent over two years.
In a scathing letter to Babcock & Brown management, Fitzpatrick points out that BBC shares are trading at less than half analyst valuations of the business based on a break-up. The stock was trading this week at $4.45, while Credit Suisse recently valued the assets at $11.50 per share.
Yesterday’s notice of meeting from BBC contains three key resolutions: a capital reduction of $2.13 a share and capital return of the same amount, or $425 million; the “sale, IPO or spin-off of the company’s investments in Eircom (the Irish telco) and Golden Pages (the main Israeli directories business) and/or the winding up of the company”; the renegotiation of the terms of the “preferred adviser agreement” with Babcock & Brown.
BBC owns 57.1 per cent of Eircom, in the books at $448 million, and other “associates of Babcock & Brown own another 7.9 per cent. The rest of the company is owned by former employees through a share ownership trust.
By the way, yesterday Eircom put a proposal to the Irish Government to split itself into two divisions – retail and wholesale. It’s a bit ironic because Australia’s telco, Telstra, is fiercely resisting the same thing.
Anyway, the appearance of Seamus Fitzpatrick’s fund on the BBC register demanding the sale of Eircom and/or the winding up of the company is a fascinating development for all infrastructure funds.
There would be many of them, especially those owned by both Babcock and Macquarie, where the fees paid to the manager ensure that the net asset value of the fund is less than the market value of the assets inside it.
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Valid point Mr T, but you name one "service" provider where the customers are happy about the fees charged.
Both Macquarrie and Babcock & Brown, amongst others, are in the business of making money. BNB have been in the investment bussiness for over 30 years and I am sure that this is not the first time that complaints have been raised.
I am sure that the comments are valid and the management of BNB and others are always treading a fine line between maximising profits for themselves and their shareholders alike. On the other hand they have to price their services accordingly to maintain competiveness and to attract the investors for their satellites.
Being a shareholder, I am not unhappy that they charge a premium and of course from a long list of investment fund managers there will be always some who complain.
I am confident the management of BNB have the expertise to handle this kind of criticism.
Both Macquarrie and Babcock & Brown, amongst others, are in the business of making money. BNB have been in the investment bussiness for over 30 years and I am sure that this is not the first time that complaints have been raised.
I am sure that the comments are valid and the management of BNB and others are always treading a fine line between maximising profits for themselves and their shareholders alike. On the other hand they have to price their services accordingly to maintain competiveness and to attract the investors for their satellites.
Being a shareholder, I am not unhappy that they charge a premium and of course from a long list of investment fund managers there will be always some who complain.
I am confident the management of BNB have the expertise to handle this kind of criticism.
