SGR - The Star Entertainment Group

[MatttSAU2XR8]

New poster here but have been lurking for a while. Can't help wondering if SGR might not be a bad buy at/around $3.20 if held for a year or two given:
- Previously spent a lot of time at/over $4.00 which presumably represented a reasonable rate of return
- Market capital now around $3.1B
- Going back to pre-COVID, i.e. 2019, yearly profit after tax around $200 million which if regained would suggest ROI of 6.5 % on current valuation, and dividends for 2019 were 20 cents per share also, so would be 6.5 % on current price...
- For 2021 year total assets (not including intangible) seem to be around $3.5 B, and liabilities around $1.7 B, so actual assets of at least $1.8 B, and 60 % asset backing, if this is the correct term, seems higher than most companies
- Morningstar had recently suggested a fair price would be around $4.57
- So, assuming they aren't put out of business be one or other government department, with the job losses that would also result, they could maybe be up around $4.00 again within a few years...?

 

[MatttSAU2XR8]

Feeling pretty pleased about stocking up on these at $3.23.

And have been reviewing company announcements since doing so and discovered:
- Directors have as recently as August been buying up small parcels of shares on market which I think means paying full price?
- IOOF bought up 5 % of the company in August and L1 financial group bought up 5 % on October 14, the latter at or around $3.50 per charts... Presumably not without expecting a significant gain from there
- Response to media reports on 12/10/2021 has SGR sounding fairly confident that they made and can demonstrate at least some effort to act on KPMGs recommendations as regards money laundering, in which case an investigation by regulators might not end up having such a significant outcome?

So now thinking to hold onto them at least until they get back into the 2019 trading range which seems likely within another year or so.

Interested if anyone has any thoughts on any downside risks in the pipeline though?

 

[Miner]

Feeling pretty pleased about stocking up on these at $3.23.

And have been reviewing company announcements since doing so and discovered:
- Directors have as recently as August been buying up small parcels of shares on market which I think means paying full price?
- IOOF bought up 5 % of the company in August and L1 financial group bought up 5 % on October 14, the latter at or around $3.50 per charts... Presumably not without expecting a significant gain from there
- Response to media reports on 12/10/2021 has SGR sounding fairly confident that they made and can demonstrate at least some effort to act on KPMGs recommendations as regards money laundering, in which case an investigation by regulators might not end up having such a significant outcome?

So now thinking to hold onto them at least until they get back into the 2019 trading range which seems likely within another year or so.

Interested if anyone has any thoughts on any downside risks in the pipeline though?

matt
Certainly you have been brave.
Unfortunately I was not so sold out at minor loss by taking a cautious move.
In stock market fortune shines for brave people. so enjoy the sunshine

 

[aus_trader]

When you successfully catch a couple of these falling knives you start to feel invincible. Do it over a 100 trades and hold over the long term to see your performance. You may come up with a brand new system that we old buggers in the trenches don't know about. Please share once you come up with it, we are happy to learn new gizmos to the arsenal.

I am only talking from a long term performance point of view. There are some short term traders who may be able to scalp a few points or pips out of falling knives and do it consistently.

 

[MatttSAU2XR8]

When you successfully catch a couple of these falling knives you start to feel invincible. Do it over a 100 trades and hold over the long term to see your performance. You may come up with a brand new system that we old buggers in the trenches don't know about. Please share once you come up with it, we are happy to learn new gizmos to the arsenal.

I am only talking from a long term performance point of view. There are some short term traders who may be able to scalp a few points or pips out of falling knives and do it consistently.

Thanks for the warning, will take this on board.

Did occur to me that I may have been taking a bit of a risk and hence why asking about people's thoughts.

I might just sit back and practice some 'virtual trades' for a while and see what happens.

 

[MatttSAU2XR8]

And sold up the SGR. Probably about time anyway, tnx for the cautionary advice above

 

[aus_trader]

And sold up the SGR. Probably about time anyway, tnx for the cautionary advice above

Well done on grabbing some short term profits.

Don't get me wrong some well run companies can provide "buy the dip" opportunities when there is a price fall in a bullish overall market.

But if you ask around here, most seasoned ASF'ers would agree that most falling knife setups should be viewed with danger and I've had countless experiences thinking I am getting a bargain only to realise the bargain kept getting cheaper and cheaper shrinking the value of that purchase until it gets to a point I can't look at that stock again.

There is lots of ASF members who buy into strength on the other hand. Various members have written their methodologies using a stock's momentum to buy into it or when the market is bullish breakout trades can work out well in your favour, see some of the breakout threads for examples of these stocks in the past:

​

Outstanding Breakout Alerts!​

Potential Breakout Alerts!​

etc...

 

[Miner]

And sold up the SGR. Probably about time anyway, tnx for the cautionary advice above

Please share 10 pc of profit with @aus_trader and @peter2 .

This ASF is full of gems.

 

[aus_trader]

Please share 10 pc of profit with @aus_trader and @peter2 .

This ASF is full of gems.

That's all good, I won't accept any profits. Not in a rude way but I am more than happy if people become more informed and educated with their decision making when it comes to stock purchases.

That's why posted some of the comments above to help people in the right direction.

 

[MatttSAU2XR8]

Thanks again!

Funny story. Just after I sold them I noticed on Motley Fool that the SGR shareholders have engaged Maurice Blackburn lawyers to sue SGR for the recent price fall on the basis that poor control/surveillance of money laundering led to bad press and so on.

BUT given that they are they are all part owners of SGR I think this means they plan to sue themselves

Unless they sold up at a loss I suppose and are now suing the current shareholders :-(

 

[dyna]

Yes, following on from the money laundering allegations and then The Star's cagey response ( quote: "misleading" ) , the class action buzzards , I mean lawyers, are circling.
With a 1/3 rd of it's value wiped off the market cap of $ 3.5 Billion , SGR is now trading below its book value of $ 3.80.

 

[So_Cynical]

Public money laundering hearings to be held from March to June 2022, so another 7 or 8 months of negative news flow to come, SP could very well bounce around for a while, still the assets are tier 1 as far as Aussie casino assets go, one for the income and long term holders i would think.

 

[peter2]

The revelations from this inquiry have been disgusting.

Resignations aren't enough IMO. Mis-directors (liars) should be barred from being senior execs for life. There should be criminal prosecutions for those breaking the law. This company doesn't deserve to hold a casino license and the regulators should lose their jobs also. It'll be white washed and a new group will take over the casino license under "closer" supervision by a new regulatory team.

Luckily the shareholders haven't lost much yet.

 

[Miner]

The revelations from this inquiry have been disgusting.

Resignations aren't enough IMO. Mis-directors (liars) should be barred from being senior execs for life. There should be criminal prosecutions for those breaking the law. This company doesn't deserve to hold a casino license and the regulators should lose their jobs also. It'll be white washed and a new group will take over the casino license under "closer" supervision by a new regulatory team.

Luckily the shareholders haven't lost much yet.

would you extend the same rules with politicians or make the disgraced CEO of Star, a politician ?

 

[Dona Ferentes]

These outfits are the biggest "wink, wink, nudge nudge" outfits around

Former Star CEO Matt Bekier also said he was “personally let down” by a slew of his colleagues in the VIP division and denied he or the board should have known the extent of the wrongdoing.

Really, dudes, what do you want? Centralised monitoring or a return to suburban dens that were totally unregulated/ open to shake-downs

This way, at least the sociopathically-inclined can gather, get photographed on CCTV so Special Branch can work out the relationships, pay a bit of CGT on the booze and have a meaningful time, and recycle the ill-gotten gains (- again a clip for the taxman). I mean, in Sydney, the "identities known to police" seemed to gather in the restaurants at Crown even though the casino had not even opened. Sort of claiming turf, I guess.

............
just not an investible business for the retail mug, however.

 

[peter2]

How much of the $100M fine are the former CEO and executive team plus the Directors going to pay?

 

[Tyler Durden]

lol SGR went up 8 cents today

I'm done. Will never try to understand the market ever again

 

[sptrawler]

Closed at $1.48 today.

Star Entertainment fights for financial future after dire outlook

The group’s shares dropped to their lowest level in history on Monday, and it warned proposed tax changes would force it to “undertake an urgent review” of Sydney operations.

www.smh.com.au

Sydney’s Star casino is in a fight for its financial future after flagging a hit of up to $1.6 billion if the NSW government executes planned tax increases and the organisation grapples with the fallout from two devastating inquiries into its operations.

The price of Star Entertainment Group’s shares dropped to their lowest level in history on Monday, shedding 20 per cent after it released a dire market outlook in which it warned the NSW government’s proposed tax changes would force it to “undertake an urgent review” of the Sydney operations and assets.

 

[dyna]

From this weekend's AFR :

94% take-up by the Insto's and largest shareholders in SGR's hastened $ 595 Mill. placement ( at $ 1.20 )

Trading resumed yesterday . S.P. at $ 1.54 by midday ( low of $ 1.40 for the day , a bit earlier )

The remaining $ 205 Mill. of stock will be offered to the mums and dads at the same price in a 3: 5 ( non renounceable ) issue

I got the cash and am silly enough for a punt....so, here I go .

Pub Baron , what's his name, has been building a stake in SGR in recent weeks, too.

 

[Knobby22]

From this weekend's AFR :

94% take-up by the Insto's and largest shareholders in SGR's hastened $ 595 Mill. placement ( at $ 1.20 )

Trading resumed yesterday . S.P. at $ 1.54 by midday ( low of $ 1.40 for the day , a bit earlier )

The remaining $ 205 Mill. of stock will be offered to the mums and dads at the same price in a 3: 5 ( non renounceable ) issue

I got the cash and am silly enough for a punt....so, here I go .

Pub Baron , what's his name, has been building a stake in SGR in recent weeks, too.

After a raising there is usually a consolidation period so though I think you are on a winner I reckon it will take at least a few months to get going.