CNP 0.00% 4.0¢ cnpr group

cnp and cer

  1. 1,190 Posts.

    It's quite funny how the market has smacked CNP around more than CER. I'm not sure if it's based on fundamentals or the fact that CNP has the word 'property' in its name where as CER has 'retail'. CER seems a bit like the poor cousin.

    At its peak, CNP had market cap of around $8.5bn and CER $4.5bn. CNP was almost twice the size of CER by market cap.

    Today, the situation is approaching the reverse. At close tonight, CNP is valued at a paltry $397m and CER at almost $732m.

    Here's some interesting, yet totally useless trivia which completely ignore common sense, market forces and the current debt and reputational problems facing the company. They do illustrate a very good point though:

    1. If you believe the CNP announcement on 17/12, you would be getting around a 40c dividend on CNP this coming year. That's an 85% dividend yield.

    2. CNP also owe shareholders the 20c dividend withheld from December. If CNP actually paid both dividends, we'd get a whopping 128% dividend yield this year.

    3. Following on from this, if you borrowed $397m to buy all of CNP today, you would have your entire loan paid back in full from the dividends alone by this time next year.

    4. BHP could currently buy all of CNP from the profit it makes in the next 11 days. That's right, 11 days profit. (BHP: $13.16bn profit = $36m per day). Westfield could do it in the next 26 days.

    5. If you believe the CER announcement on 17/12/07, you'd be getting a 13.5c dividend on CER this year. A 43.5% dividend yield.

    6. If you borrowed $732m to buy CER today, you'd have your loan paid back in full from dividends alone by Christmas 2010.

    7. Based on the 2007 CNP balance sheet, you could currently buy $3.6bn of shareholder equity for $397m dollars. As Warren Buffett would say, that's like buying a dollar for around 9c.

    8. CNP has $191m of cool, hard cash sitting in the bank which you would get included in the $397m price tag. Once you net this out, the once blue-chip, ASX200 listed, second largest retail property owner in Australia, fifth largest in the US, company is going for just over $200m.

    9. Based on the same 2007 data for CER, you could currently buy $2.2bn of shareholder equity for $732m. That's like buying a dollar for around 33c.

    10. If you had a really strong balance sheet, a great reputation and the ability to borrow large sums of money at a decent rate, you could pick up both CNP and CER up for a couple of billion and have the whole lot paid for out of cashflow within 2 years. To be honest, no one is going to realise their local Centro shopping centre has changed its name to (insert buyer name) anyway.

    Do you really think these two are going under?
 
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