CSR - CSR Limited

[noirua]

So far, so good and CSR finish up 12 cents at $3.91. Hopefully I've managed to time my re-entry perfectly this time in both shares and options, time will tell.

Is this price movement due to previous rumours of a break-up getting closer? Is there really an interested party about to make a move? Is it just because of the Rinker factor that CSR are gaining ground?

 

[TheRage]

I think Sp rise yesterday mainly due to a company increasing it's holdings from 5-6% forgotten name already. I have been in and out of CSR twice already this year. I bought back in most recently at 3.49 and I think fundamentally there is some steam left in this one although most brokers give it a 12 month price target of 3.70. Discounted cash flow techniques employed have given me a target a bit higher tha nthis but I have als factored in the breakup factor. I hope CSR sell off their buildings and aluminium divisions and focus on Sugar and ethanol. This would make me very happy. Chart wise there seems to be a bit of a side trending pattern happening. If it breaks through $4 we might be in for some good times but unfortunately earnings alone won't do this. We need more takeover rumours or the real thing happening.

 

[noirua]

Interesting as M & G increase their stake in CSR to 10.16%. This would give them a strong position in a takeover situation where the predator requires 90% of the stock.

 

[noirua]

CSR traded at $3.53 at the close. Trading reached nearly 8 million shares and the recent lacklustre results have brought back market thoughts of a break-up or buyout.

 

[TheRage]

I have been holding CSR since they were high $2 hoping that one day another company would see the value in breaking up the three divisions. Personally sugar and aluminium have about as much in common as hitler and mother theresa. For this reason CSR flounders. What started off as a diversification approach by thinking when sugar prices are low aluminium or building products would offset the falls. Personally I like when companies sell one product becaues the cycles present so much more opportunity than the flat earnings effect of diworsification. I still hold CSR purely on the buyout factor and nothing else.

 

[bumble_boo_bum]

I have been holding CSR since they were high $2 hoping that one day another company would see the value in breaking up the three divisions. Personally sugar and aluminium have about as much in common as hitler and mother theresa. For this reason CSR flounders. What started off as a diversification approach by thinking when sugar prices are low aluminium or building products would offset the falls. Personally I like when companies sell one product becaues the cycles present so much more opportunity than the flat earnings effect of diworsification. I still hold CSR purely on the buyout factor and nothing else.

Hitler and Mother Theresa have more in common than you think. Read Christopher Hitchens book about her - The Missionary Position - Mother Theresa in Theory and Practice. Taking money from despot dictators - refusing to clean needles properly when using them on the sick.

The following are some excerpts from an article by Norman Taylor on the book in which he gives some eye-opening details from the book:

"Mother Teresa has been favoured with huge sums of money during the past 30 years, but patient illnesses have been wrongly diagnosed by unqualified sisters and volunteers who are unable to distinguish between the curable and incurable. Mother Teresa prefers providence to planning, and the very strictest economy is always enforced, much to the detriment of the patients' interests. It is interesting to note that despite the enormous sums involved ($ 50 million remains in an account in Bronx) needles are used over and over again and are rinsed under the cold water tap. The nuns answer to "why are you not boiling water and sterilising your needles?" was simple: "There's no point. There's no time." Perhaps, the patients take too long to die, and hastening death saves money. Cynical as that may be, Mother Teresa's global income is more than enough to equip several first class clinics like some of the finest in the West that she herself has checked into. To a person in the last agonies of cancer, and suffering unbearable pain, she said with a smile: "You are suffering like Christ on the cross. So Jesus must be kissing you." A sign on the wall of the morgue of Mother Teresa's Home for the Dying reads "I am going to Heaven today".

 

[TheRage]

While an interesting correction to my anology perhaps not really adding any value to the discussion on CSR.

 

[noirua]

While an interesting correction to my anology perhaps not really adding any value to the discussion on CSR.

Hi, that was the strangest off-topic post I've ever seen in reply to your comments on CSR (post #125).

CSR have paid a 20c capital return and an additional 40 cents dividend in the last few years, however, they have trailed their twin, Rinker Group by a long way.
All the interest in CSR's possible break-up or a consortium bidding should prevent any sharp reversal.

 

[Fab]

Hi, that was the strangest off-topic post I've ever seen in reply to your comments on CSR (post #125).

CSR have paid a 20c capital return and an additional 40 cents dividend in the last few years, however, they have trailed their twin, Rinker Group by a long way.
All the interest in CSR's possible break-up or a consortium bidding should prevent any sharp reversal.

I am seriously comteplating at getting rid of this one as it has gone nowhere in the last year. I only kept it for the dividend and even that is not enough anymore. Is there anyone out there thinking the same as me.

 

[TheRage]

All the interest in CSR's possible break-up or a consortium bidding should prevent any sharp reversal.

I completely agree.

Fab holding CSR as Noirua pointed out might give you a little insurance against a falling sharemarket but perhaps not spectacular growth.

 

[ROE]

I completely agree.

Fab holding CSR as Noirua pointed out might give you a little insurance against a falling sharemarket but perhaps not spectacular growth.

a few directors top up their CSR holding recently...maybe they know something we dont or they just doing it to hold the stock steady

 

[noirua]

M&G, have once again increased their holding in CSR, this time from 10.16% to 10.64%. A 10% holding is a good block or strong position to force a larger bid.

 

[TheRage]

Seems one institutional investor is selling to the other. M&G buying PPT selling which could explain large volumes lately like 13 million today.

 

[noirua]

I've taken the opportunity to add a few CSR shares this morning with the continued strong trading. Profits were down this year on increased turnover, though a large one off sum arrived from a legal settlement. Debt has been reduced. The ethanol expenditure should start to bear fruit quite shortly. I therefore remain confident at this price and there is the added a spice of a possible break-up or remote possibility of a bid.

 

[TheRage]

I've taken the opportunity to add a few CSR shares this morning with the continued strong trading. Profits were down this year on increased turnover, though a large one off sum arrived from a legal settlement. Debt has been reduced. The ethanol expenditure should start to bear fruit quite shortly. I therefore remain confident at this price and there is the added a spice of a possible break-up or remote possibility of a bid.

Big volume today of 16 million and last few days big volume. Most techies would tell us buying on such big volume with a falling share price is confirmation of a downward trend and to be honest I probably wouldn't argue with them. CSR is in for some rough times but like you I am accumulating in the lows when you view the bigger picture. CSR recently talked with pilkinton glass about the possibility of an aquistion. Pilkington's Free cash flows are quite inpressive. But I get uneasy when new management start thinking aquasitions instead of cutting the fat from current operations. I would love it if CSR dumped the aluminium business. Cost of Sales on aluminum smeltering seems to be increasing despite spot price of aluminum increasing. Imagine what would happen to the aluminum division if spot price tumbled. I am still holding.

 

[Kauri]

The volume and nature of the daily bars over the last couple of weeks or so have brought CSR firmly back onto my radar. The bottom may have been scratched???
...Cheers
........Kauri

 

[TheRage]

Plenty of volume still not much Sp movement. Barclays are out despite some interesting developments some of which I am still unsure about. CSR is building a new insulation plant as part of organic growth and cost efficiencies, they have also just bought Pilkington Glass for almost 700 million which apparently will be earnings accretive in 2009. They are funding acquisition from debt but will be reintroducing DRP to pay debt off. Either way if they issue it now or latter we will still own less of the company.
There are also supposed cost efficiencies being driven by the current building products with addition of the new pilkington division. While I applaud the new CEO for trying I can't help but think this little number has a number of hurdles to overcome. 1) spot price of Sugar is too dependant on Brazil's supply to the market. 2) Aluminum despite great spot price compared to history seems to be costing more to turn from ingots to usable product 3) Building industry uncertainty put the building division at risk. In summary I still hold purely because the combined value of all of CSR's businesses adds up to about $3.90a share and for this reason it may still appear cheap to a buyer who could integrate some or all of the divisions into their business.

 

[noirua]

This CSR Address to Shareholders, does seem to put the company on increasingly solid ground. Added just a few more on this information via our new MD: http://www.asx.com.au/asxpdf/20070705/pdf/3139fttx45107.pdf

 

[TheRage]

The new CEO certainly talks the talk. While not fully convinced I think he is making some good changes. Personally I am more excited by the fact Guiness Peat Group just bought 6%. They also recently bought nearly 30% in Marloborough Sugar. Maybe some strategic buying.

 

[noirua]

CSR have completed their buy-back of 37,374,815 shares at between $2.79 and $3.43.

CSR stand at $3.60.