Ludowicki and margin lending

[Petros]

Hi all - I'm new to ASF.

I maintain a portfolio geared to 50% via BT Margin Lending and would like to further invest in Ludowicki but BT assign a zero pecentage lending ratio against it.

I've had a good look at this stock over the past year and have come to the conclusion that it is a strong company that should benefit from the current extra spending in the mining industry plant and eqpt.

Can someone tell me why BT consider it a "risky" (I presume) stock? Its been around for 100+ years and to my knowledge has missed paying a dividend only once.

 

[bullmarket]

Hi and welcome Petros

Hi all - I'm new to ASF.

I maintain a portfolio geared to 50% via BT Margin Lending and would like to further invest in Ludowicki but BT assign a zero pecentage lending ratio against it.

I've had a good look at this stock over the past year and have come to the conclusion that it is a strong company that should benefit from the current extra spending in the mining industry plant and eqpt.

Can someone tell me why BT consider it a "risky" (I presume) stock? Its been around for 100+ years and to my knowledge has missed paying a dividend only once.

I don't use margin loans and so I'm not sure what criteria margin loan providers use to allocate lending ratios so I'm just taking a stab in the dark here.

Looking at Commsec research LDW has a market cap of only $119M and is not in any of the major indices down to the ASX300. So assuming the Commsec info is correct then maybe your margin lender doesn't allocate lending ratios to companies below a certain market cap and/or are not within the major market indices.

Hope this helps but hopefully someone who uses margin loans can help you more.

Good luck

bullmarket

 

[rozella]

G'day Petros,

It is not because Ludowicki is risky......it is as bullmarket says....each marginlender has a criteria being the top asx 100 or asx 200 etc. In the case of BT, without checking up, I think it is the top asx300

You can still buy it through your margin account, but you are using 100% of your own cash.

 

[Petros]

Thanks.... I have borrowed against the loan for this stock, its just that I want to buy more, however my buffer against a call falls dramatically at each top-up.