GTP - Great Southern Plantations

[Seneca60BC]

I was only half listening to the radio news item, but isn't there currently some political discussion about wiping tax benefits for agribusiness?

Might not affect GTP. Does anyone know?

I haven't been following this company (sold it about three years ago thank goodness) but still curious about why the inexorable downward slide.

How much did you lose on this one Julia?
. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

 

[Julia]

How much did you lose on this one Julia?
. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

I'm not sure why you would assume I lost anything? I said that I sold out about three years ago. If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
My entry was at 48c. So I made a comfortable profit.

 

[bunyip]

I'm not sure why you would assume I lost anything? I said that I sold out about three years ago. If you have a look at the chart for that period you will see that the price at that time was ranging between $3.50 and $4.00.
My entry was at 48c. So I made a comfortable profit.

Crikey Julia........a 'comfortable profit'?? I'd be more inclined to say you made an absolute killing! You rode the uptrend for all it was worth. Best of all, you headed for the exit gate once the party was over. And no doubt you found a profitable home for your former GTP funds by buying another growth stock.
Your modus operandi is a valuable lesson for anyone wanting to extract maximum profits from the market.

 

[numbercruncher]

haha Julia that had me in stitches as well ......

48c to circa $4 is a " comfortable profit " , Id really love to see what cleaning up or even a good profit is

 

[bunyip]

Any advice now they are down below 60c ? (I bought in at $3.15 - ouch !)
Should I buy more and lower average price ?

Hard to see where this company is going (regardless of 'strategic review')
Any thoughts much appreciated.

I notice that you haven't exactly been inundated with advice as to what you should do in the case of GTP.

Should you buy more?
I won't try to advise you.....what I'll do instead is tell you about a disgruntled investor who sat beside me at an Options seminar in Brisbane some years ago.
He told me he lost a six figure sum by investing in Pasminco (PAS). He started off with a modest investment in PAS, but the stock starting going down shortly after he bought. So he bought more. And more. And more. He invested further funds into PAS every time it dropped another 10%
The company went broke and he was wiped out.

Below is an extract from someone whose views I value highly......

Don't ever fall into the seductive trap of thinking that by buying more at lower prices, the stock will only have to rally half as much before you can get out even.
Do as the professionals do....average up, not down.
The pros pile on further when the market action proves them right - not when they've been proven wrong. Instead of sitting on a problem stock, they get out promptly.
Learning how to handle a losing position and keeping losses to a minimum is one of the most important secrets of successful investing.
The averager is thrown off the profitable track when he buys more instead of getting out.
Averaging down can be particularly crippling if you hold a stock that's really being sold off heavily. Every time you average in the hope that you're near the bottom, you simply add more shares and more losses to your portfolio.
The result is that you throw good money after bad. Trying to guess the bottom in a falling stock is like fishing in the ocean with your fingers. Hope is a foolish reason for holding on, but an even worse reason for buying more.

 

[GreatPig]

From July 2006 (post #539):

Maybe Split Enz were wrong, and the history of 2000-2001 will repeat - 50 cents here we come!

50 cents - here we are!

Now who said it couldn't happen?

GP

 

[Julia]

Great Pig, I can remember back about three years or more ago when the GTP SP slipped below $5. I was at that stage naively nursing the belief that any drop was only temporary. Can't now remember what you said, but you picked me up on that suggestion! How right you were, huh!

 

[GreatPig]

Well even my comment was just that, not a prediction.

I have enough share price history though to see that stocks can go up and down that much, and that almost nothing is impossible given the right circumstances (not that charts show anything about circumstances). That's why it sometimes amuses me to see people making statements along the lines of something-or-rather can never happen.

Late last year on another forum, when BHP was over $40, someone was saying they thought it would never get back to $30. While I didn't really expect it to, I mentioned that I could at least see it getting back to that price if the market dropped enough. It didn't quite get there in January, but came very close ($31).

Bottom line: (almost) nothing is impossible!

GP

 

[Jackob]

From July 2006 (post #539):


50 cents - here we are!

Now who said it couldn't happen?

GP

Good on you, GreatPig.

It's indeed interesting to look back at the discussions 2 years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=1284&page=28

At that time I did know GTP would keep falling from $2.50 but I didn't expect it would come to 50c so soon.

Just for fun, may I suggest now that GTP would shrink a further 5 time to 10c in the near future, so that I could also say "Here we are 10c" once it happens? (I reckon this is a REAL possibility).

 

[bunyip]

Good on you, GreatPig.

It's indeed interesting to look back at the discussions 2 years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=1284&page=28

At that time I did know GTP would keep falling from $2.50 but I didn't expect it would come to 50c so soon.

Just for fun, may I suggest now that GTP would shrink a further 5 time to 10c in the near future, so that I could also say "Here we are 10c" once it happens? (I reckon this is a REAL possibility).

Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?

 

[Jackob]

Jackob (or anyone else).....Do you see this company surviving or do you think it's headed for oblivion?

Bunyip,

It’s hard to say, really. But just as people often say, anything can happen on earth under the sun.

My gut feeling is that, frankly, the present GTP’s MIS business model cannot survive. It has to change, but any change could involve even more risks.

Just for new comers: if you read this “GTP” thread from early days, you can find that in the past ~2 years there have been plenty of warnings on GTP's downfall, which were surprisingly enduring and penetrating. The present situation has further deteriorated due to the facts we all know.

 

[bunyip]

Bunyip,

It’s hard to say, really. But just as people often say, anything can happen on earth under the sun.

My gut feeling is that, frankly, the present GTP’s MIS business model cannot survive. It has to change, but any change could involve even more risks.

Just for new comers: if you read this “GTP” thread from early days, you can find that in the past ~2 years there have been plenty of warnings on GTP's downfall, which were surprisingly enduring and penetrating. The present situation has further deteriorated due to the facts we all know.

There were indeed many warnings on GTP's downfall. But at the same time there were folks who were trying to talk the stock up. One of these characters got quite irate with me for telling people not to buy GTP while it was downtrending.

 

[Rainmaker2000]

Wow, GTP, a 50 cent company....I have not looked for a while so its a bit of a shock.....my preferred pick was always TIM but then, that's like saying it's better to go down on the front of the titanic than the back

In this market, even perfectly good companies are getting drilled...so special treatment is reserved for these guys...

I don't reckon they are set for oblivion...unless management is especially negligent....keen to hear otherwise.

My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.

At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow

 

[Jackob]

I heard the rumour that "GTP is in the crosshairs of the world's biggest commodities hedge fund ...", but I am amazed.

 

[Jackob]

...
My understanding is that their net tanglible asset figure is not totally fictitious but not completely legitimate either....most of it is 'land assets' albeit with long leases over it.

At the very, very least.........GTP could shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off......minimal capital outlay, strong cash flow

Could GTP “shut up shop on new projects and just wait for every acre of their land to come available.....more and more each year......and just sell that stuff off”?

I reckon the answer should be “NO”. Because GTP can get enough cash flow to survive in this way.

GTP’s NTA (net tangible assets) is officially about $610m, or say $1.90/s (at 30/3/2008).

Suppose that GTP could sell 1/10 of its assets in the first year, and what it could get would be ($610m*1/10) = $61m. (The 1/10 assumption is lenient, as most of GTP’s lands are for the 11 year woodchip schemes, and the size of them 11 years ago were only a small fraction of the present).

Now, GTP has debts of ~$700m (at 30/3/2008), which needs interest payment about $70m a year. In addition, GTP has about $2.5 billion worth MIS projects under control, which need at least 2% of the total value as the maintenance cost, that is $50 m.

So, the total expenditure needed would be at least $70m+$50m=$120m, which is about twice of the $61m NTA sale results. Plainly, GTP would indeed go oblivion in such a way.

Thus GTP’s $610m ($1.90/s) “NTA” is only a pie in the sky, which you can never get it. The problem in GTP’s NTA valuation is that it has hidden its liability for maintenance of the existing MIS schemes and service of existing debts in the future. I believe if these hidden liabilities were correctly included, the present GTP’s NTA should be negative.

 

[Jackob]

Sorry, but the second paragraph of mine should be read as

I reckon the answer should be “NO”, because GTP canNOT get enough cash flow to survive in this way.

 

[Rainmaker2000]

Yeh, I certainly agree their NTA is not exactly reliable.......

When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....as I understand they are moving to this model for new MIS projects

I still think there is some value there in the enterprise and they should be able to survive but note that I would not be an investor in GTP at any price

 

[Jackob]

....... When I said, "sell it off", I mean sell it with their MIS projects to 'investors'....

Rainmaker,

If GTP “sell off” MIS to the investors only with the land available from rotation (from finished projects) as you suggested, the problem is that the revenue would be too little to let GTP survive.

For example, this year’s total sales were $350m, of which I reckon only a small fraction, about $50m - $100m, might be from re-selling the lands in rotation. Thus, had GTP totally relied on this amount of money, after a deduction of the 20% “commissions and promotion” expenses and servicing $700m of debt, nothing would be left to allow GTP to survive any longer.

 

[Portfolio]

Ouch. This forum has known for a long time that the MIS projects are near worthless but the restructure lets the whole world know.

1. No MIS investors will take this up (if only because of spite);
2. They have just killed off any future MIS investors by effectively telling them what the projects are actually worth;

I can see the value for GTP if MIS investors took it up but the bottom line is that they just wont. Very bad strategy.

 

[Jackob]

Yeh, it’s a bad strategy and it won’t work.

Just 3 months ago when the sp was about $1.60 it might work. But the sp is under $0.60 now – It’s too late.

It’s almost suicidal by showing all MIS projects are rorts and throwing GTP itself into a dead corner … can’t see how it can move next …

It looks like a very final gamble for GTP’s survive, but I can’t see how it can win.