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Hi folks,
CWT ..... off its lows, with a recent morning star .....
..... looking for some news this week ..... ???
For CWT chart, just go to:
CWT chart ..... click here.
happy days
yogi
CWT - Challenger Wine Trust
- Thread starter yogi-in-oz
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- challenger wine trust cwt
Hi folks,
CWT ..... off its lows, with a recent morning star .....
..... looking for some news this week ..... ???
For CWT chart, just go to:
CWT chart ..... click here.
happy days
yogi
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Re: CWT - Challenger Wines
Challenger Wine Trust trades for the last month like it is heading straight into a liquidity crisis. Does anyone know where I can get a list of all of its debt due through 2010? Is there any rumor to justify the crash of share prices? The effective dividend would be somewhere around 30% at the current trade, which obviously implies a dividend cut is coming or something worse.
Challenger Wine Trust trades for the last month like it is heading straight into a liquidity crisis. Does anyone know where I can get a list of all of its debt due through 2010? Is there any rumor to justify the crash of share prices? The effective dividend would be somewhere around 30% at the current trade, which obviously implies a dividend cut is coming or something worse.
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Re: CWT - Challenger Wines
Maybe the Challenger group has problems, but it's not being reported by the Wine Trust:
...................................................................................................
Maybe the Challenger group has problems, but it's not being reported by the Wine Trust:
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Re: CWT - Challenger Wines
I did see that release, but I did not see the line that no loans are due until 2011. Thanks for that. I checked other Challenger trusts and I did not see any overall down pattern common to all of them.
So you believe they are going to pay out a 30% effective yield? In every case I have invested in yields that high in the past I have always been left a bag holder as some bad news hits before the distribution.
I did see that release, but I did not see the line that no loans are due until 2011. Thanks for that. I checked other Challenger trusts and I did not see any overall down pattern common to all of them.
So you believe they are going to pay out a 30% effective yield? In every case I have invested in yields that high in the past I have always been left a bag holder as some bad news hits before the distribution.
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There doesn't seem to be a thread on this stock. It is very small (mkt cap $57 million) but it owns 22 vineyards and I believe two wineries. Very strong cashflows and return on assets but trading at around half of the NTA backing (66c). I believe this is due to two factors:
a) Debt levels are hovering around 54% versus covenant limits of 57 and 60% for the two facilities.
b) 1/3 of their portfolio by carrying value is leased to Australian Vintage who have looked to be circling the drainhole. And if AVG go bust, it is likely lower yields would be obtained which would potentially add to pressure to revalue the assets further down causing covenant breaches.
I think that the covenants are the main issue, as well as refinancing the half of the debt that expires in 2011 in the longer term. The business itself would be fine if AVG went under were it not for these restrictions as net profit margins have been slightly over 50% for the last two years.
Management has cut distributions in the last few quarters and moved to a half-yearly distribution. I like this move as creating a bit of breathing room with respect to those limits could unlock far more value than an extra handful of cash for unitholders. They are also pursuing asset sales, I am less keen on this as it seems to be pretty close to the bottom of the market and some of the prices they've been getting look pretty disappointing relative to carrying values and previous yields. Fortunately its only been a few very small vineyards sold so far.
Their NZ assets (25% of the portfolio) are high quality, leased to Delegats Group who make Oyster Bay (fantastic Merlot and Sav Blanc) and there is room for rents to rise when the contracts expire. The Australian assets are on the whole rented for more than they are worth as contracts were signed in better days for the wine industry, but not catastrophically so, 20% was the estimation in the last report I read.
The water rights are carried at cost, I think they are a nice little bonus particularly with their warm climate properties around the Murray River.
I bought a small amount today, as AVG announced some very positive results yesterday. I don't care if they make a profit just as long as they pay their rents for a few more years
Also the CWT tends to be influenced by changes in AVG's price from reviewing the two on a graph in percentage terms over the last year. And AVG went up 67% yesterday while CWT sat. Today CWT was up 9.6% but I missed a third of that. Also the general optimism in the media and market bodes well for wine sales and more importantly asset valuations. I will be looking to accumulate more over time unless I see any reason not too.
a) Debt levels are hovering around 54% versus covenant limits of 57 and 60% for the two facilities.
b) 1/3 of their portfolio by carrying value is leased to Australian Vintage who have looked to be circling the drainhole. And if AVG go bust, it is likely lower yields would be obtained which would potentially add to pressure to revalue the assets further down causing covenant breaches.
I think that the covenants are the main issue, as well as refinancing the half of the debt that expires in 2011 in the longer term. The business itself would be fine if AVG went under were it not for these restrictions as net profit margins have been slightly over 50% for the last two years.
Management has cut distributions in the last few quarters and moved to a half-yearly distribution. I like this move as creating a bit of breathing room with respect to those limits could unlock far more value than an extra handful of cash for unitholders. They are also pursuing asset sales, I am less keen on this as it seems to be pretty close to the bottom of the market and some of the prices they've been getting look pretty disappointing relative to carrying values and previous yields. Fortunately its only been a few very small vineyards sold so far.
Their NZ assets (25% of the portfolio) are high quality, leased to Delegats Group who make Oyster Bay (fantastic Merlot and Sav Blanc) and there is room for rents to rise when the contracts expire. The Australian assets are on the whole rented for more than they are worth as contracts were signed in better days for the wine industry, but not catastrophically so, 20% was the estimation in the last report I read.
The water rights are carried at cost, I think they are a nice little bonus particularly with their warm climate properties around the Murray River.
I bought a small amount today, as AVG announced some very positive results yesterday. I don't care if they make a profit just as long as they pay their rents for a few more years
Also the CWT tends to be influenced by changes in AVG's price from reviewing the two on a graph in percentage terms over the last year. And AVG went up 67% yesterday while CWT sat. Today CWT was up 9.6% but I missed a third of that. Also the general optimism in the media and market bodes well for wine sales and more importantly asset valuations. I will be looking to accumulate more over time unless I see any reason not too.
So_Cynical
The Contrarian Averager
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I bought a small amount today, as AVG announced some very positive results yesterday. I don't care if they make a profit just as long as they pay their rents for a few more years
Your probably right, re the AVG positives flowing on to CWT...maybe the whole sector is ready for, or in fact has started to turn :dunno: anyway the chart says that value buying in CWT has been at 27 cents and under, wouldn't be keen to pay more than that.
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