ferret report

  1. blt
    164 Posts.
    RWE 07:25:00 6174 24/10/2003 (FE) Around the Traps ... with THE FERRET: (RWE)
    RWE News
    7:25:020 24/10/2003
    ********************************************

    The floats boom hit a new high on the decibel scale yesterday
    when JB HI FI (JBH) came on to the lists at a huge premium.
    The stock went as high as $2.27 and closed at $2.25, a profit of
    70c on the $1.55 retail investors and 1100 staff paid for the shares,
    and 45c on the $1.80 the instos paid.
    No wonder stagging was rampant.
    Almost 29 million of the 102 million shares cashed in.
    At the insto price of $1.80 JB was priced at 14 times this
    year's forecast earnings.
    At yesterday's $2.25 close that was 17 times.
    Investors never learn.

    *****

    With the annual Melbourne Cup flutter on punters' minds again
    it's fitting the sharemarket has been concentrating on betting stocks.
    Such as the merger of UNITAB and the NSW TAB and the attendant
    fund manager angst over who should head the merged company.
    Fund managers are expert at selecting bosses.
    TAB fell 2c to $3.51, down from the post-merger announcement
    price of $3.60 last Thursday, while Unitab fell 1c to $7.02, down from
    $7.14 a week ago.

    *****

    However, punters found a new favourite in BETCORP (BCL).
    It shot up 6c to 57c before settling at 56c after news of
    substantial growth in earnings and customers in the third quarter.
    "The company has reported an excellent quarter's result,
    building on a strong first half and is positioned well moving into the
    fourth quarter.
    The company reiterates its intention to declare a final dividend
    in respect of the 2003 full year result early in 2004,'' chairman John
    Priest said.
    The stock does not seem overpriced on fundamentals.
    Betcorp already has EPS of 10c for nine months in the bag and
    the fourth quarter is usually the best of all.
    On the 10c alone p/e is less than 6 times.

    *****

    Meanwhile, shareholders of IASBET (IAS) continued to lose money
    with the stock down for the fourth day in a row.
    It fell a further 5c to as low as $1.15, a 30c loss since
    Friday.
    As we reported on Tuesday Iasbet shares ``blew'' in the market
    because of a weekend newspaper report of the CBA bank manager who had
    lost $19 million of the bank's money punting on racehorses over five
    years.
    Shareholders in the stock are nervous the betting shop may have
    to pay some of it back.

    *****

    We hit upon a winner by accident this week.
    On Wednesday we decried the fact that the market had seemed to
    have lost interest in gold.
    To wit, GINDALBIE GOLD (GBG), which the previous day had
    reported a strong September quarter's production and a prediction that
    it would be a debt-free, unhedged producer by the end of this year.
    However, the shares promptly fell 0.5c to 17c.
    Bad mistake.
    Yesterday Gindalbie soared 9c to 27c before settling at 24.5c.
    It wasn't a rethink of the quarterly, we hasten to add.
    Rather the emergence of the Mt Mulgine area, 35 kms south of its
    Minjar Gold Project, as a significant new mining centre due to the
    high-grade gold discovery at the Bobby McGee Prospect.
    The first batch of assays returned ``outstanding''
    intersections, and the company cannot be accused of hype.
    They included 7 metres at 171 g/t gold from 37 metres (including
    1 metre at 971 g/t and 1 metre at 195 g/t, 1 metre at 18.1 g/t and 1
    metre at 8.48 g/t).
    Speculators will need to keep their eye on this stock.
    Managing director David McSweeney says Bobby McGee is one of six
    gold prospects within the newly recognised Western Corridor at Mt
    Mulgine.
    "With mining scheduled to commence at the nearby Highland Chief
    deposit (47,000 tonnes at 2.69 g/t) in November, this area has been
    confirmed as an exciting new mining centre.".

    *****

    Gindalbie was not the only gold that we said "missed out" after
    seemingly "good news" in our piece on Wednesday - INVESTIKA (IVK) was
    another.
    After reporting what it described as "outstanding" assays from
    Ghana, the best of which was 13 metres of 17.84 g/t gold, the shares
    fell 0.6c to 4c.
    Things have not picked up.
    The stock was down a further 0.2c to 3.7c yesterday.

    *****

    When you're a market darling like PAPERLINX (PPX)
    disappointments hit shareholders hard.
    Shareholders then hit back - hard.
    PaperlinX dived 40c to as low as $4.95 (it closed at $5.06)
    after the annual meeting was warned September quarter earnings were
    weaker than expected due the higher dollar.
    But what worried us was managing director Ian Wightwick's
    comments ...
    "Even if markets remain flat, PaperlinX Europe [which is the
    renamed Buhrmann takeover] is expected to continue to perform profitably
    and compared more than favourably relative to its competitors."
    It's the "EXPECTED to continue to perform profitably" part that
    jars - for a big new acquisition profit should be a certainty and
    nothing "expected" about it.
    ENDS
 
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