Australian (ASX) Stock Market Forum

RFG - Retail Food Group

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1.60 was the last support level. Maybe that becomes resistance in the future. Definitely a 'don't argue' from the market ;).
 
Wysiwyg said:
1.60 was the last support level. Maybe that becomes resistance in the future but lower from. Definitely a 'don't argue' from the market ;).
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Here's the RFG story in one 10 year chart. $1 to $8 and then back to $1 again. The market can be just as ruthless as it can be kind.

big.chart.RFG.gif
 
What to buy, when to buy and when to sell. The other side of an uptrend is consistently undesirable for taking long (hold) positions. Been black swan burnt more than a few times from extremely similar charts.
 
The problem for me now is the debt, and the attached convenants, I have drilled down fairly hard in trying to decide whether to sell out or hold on, or accumulate.

First decision was easy, I cant accumulate with the debt the way it is and the covenants. I did a very dirty and quick baysian, back of the envelope exercise in calculating an expected value and came out with about $1.25, which would imply selling is the correct option.

I also projected an IV based on what I think might happen with the cash flows and earnings going forward as well as allowing for a CR (I think it needs that just to survive.), that gives me a range of around the $2 mark. So depending on my conviction with that outcome, could be a wait and hold!

Still thinking.
 
It's lost all credibility.
It's going to suffer, before becoming viable, if it's not taken over by someone who can run the thing.
 
galumay said:
The problem for me now is the debt, and the attached convenants, I have drilled down fairly hard in trying to decide whether to sell out or hold on, or accumulate.
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To me it just looks like a stretched balance sheet (they're on the hook for franchisee leases too), with mediocre brands, some of which are well passed their use-by date, and a very unhappy group of franchisees. Their business is busted, who would be dumb enough with all the negative media they've received to go and buy an RFG franchise? I wouldn't hold through this because it will take a long time to turn this business around, if they ever manage to. If there comes a time to buy there will be plenty of opportunity.

galumay said:
First decision was easy, I cant accumulate with the debt the way it is and the covenants.
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If you acknowledge the debt is a serious issue why hold the shares? It seems to me to be taking unnecessary risk with your money. The first rule of finance is past decisions don't affect future decisions. You wouldn't buy shares today, but you'll continue to risk your capital...
 
McLovin said:
The first rule of finance is past decisions don't affect future decisions. You wouldn't buy shares today, but you'll continue to risk your capital...
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I just dont think its as binary as that, past decisions do influence subsequent decisions. If I hadnt bought in the first place then the decision would simply be "is RFG trading at a price that makes it a compelling buy?" - and with the debt, I dont think its there yet.

But thats not where I am at, I do hold a significant number of RFG, I have no need of the capital for at least 10 years, if I sell I realise a loss that is not insignificant. Of course there is some risk that in not selling I will lose more capital, but there is also a significant potential for the business to recover and increase it's value again.

I havent made my mind up either way, but for me its a multi facetted decision with a lot of moving parts and not a simple, binary one.
 
I can't believe the buyers today pushing the price above $1.20 when it had sunk to nearly a dollar.
Why would you buy? As McLovin said there will be plenty of chances in the future. It's bad enough that they will have to turn the business around when there would be few potential franchisees wanting them at the moment. There is the upcoming court cases, sure to be more bad news from the franchisees, also the underpaying of staff that has yet to bite them. My prediction is sub 50c.
 
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galumay said:
I just dont think its as binary as that, past decisions do influence subsequent decisions. If I hadnt bought in the first place then the decision would simply be "is RFG trading at a price that makes it a compelling buy?" - and with the debt, I dont think its there yet.

But thats not where I am at, I do hold a significant number of RFG, I have no need of the capital for at least 10 years, if I sell I realise a loss that is not insignificant. Of course there is some risk that in not selling I will lose more capital, but there is also a significant potential for the business to recover and increase it's value again.

I havent made my mind up either way, but for me its a multi facetted decision with a lot of moving parts and not a simple, binary one.
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No need for capital for at least 10 years? Not a good outcome
 
who were the smart traders who bought at $1.1 at least and bailed out. Needed lots of gutts however.
Lucky to sell at average $2 between 22 to 26 February.
 
Knobby22 said:
I can't believe the buyers today pushing the price above $1.20 when it had sunk to nearly a dollar.
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Answer : I was a bit late to the table, cause I was tied up with other stuff. But I still bought at 1.25 and sold at 1.45 and 1.435:D:xyxthumbs
 
Think of it this way Galumay. Rather than wait, go with the market and sell. You can then buy back the shares at a cheaper price and buy additional if you want. I used to be like you but have learnt to be nimble. That is the big advantage of being a small investor.
 
Knobby22 said:
Think of it this way Galumay.
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I do think about it that way, Knobby22, thing is I also think about it other ways as well!!
Its still unresolved for me. I used to be like me too, but now I take much longer to make decisions.
 
many sides to choices........when thinking capital i also think overall tax position (and maybe what/when a 'forced' tax loss does - liquidation)
 
Here u go. RFG is out of index . So watch this Monday to see the price probably goes below $1 without support from financial institutions and fund managers.
Sorry - no joke but going to be tougher for RFG believer at least next 12 months for sure. MF (Share Advisor) has at last showed white flag calling RFG is a SALE. You do not need an expert to tell that when priced dived and dived down. No more holding
 
Miner said:
Here u go. RFG is out of index . So watch this Monday to see the price probably goes below $1 without support from financial institutions and fund managers.
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Retail Food Group at $1.03 and flirting with $1 this morning. Hard to believe RFG is back at late 2006 levels.

big.chart.RFG.10yr.gif
 
Knobby22 said:
Think of it this way Galumay. Rather than wait, go with the market and sell. You can then buy back the shares at a cheaper price and buy additional if you want. I used to be like you but have learnt to be nimble. That is the big advantage of being a small investor.
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Additionally, the value of the capital loss for tax purposes is not to be overlooked.
At worst it gives you some time to form a clear unbiased opinion of the stock while your flat. If the price goes up a little - no big deal as the tax asset should more than cover it.

However, the bigger position you have the more complicated the decision becomes with more factors involved.
 

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