I think you'll find the reason Roger's calculation method doesn't work well on those companies is their debt. I've created my own valuation spreadsheet/equation and I know that debt is definately the reason those stocks don't pass through my valuation method with any decent intrinsic values.
Rogers Equation is for the opportunity to identify and value stocks that are of the low debt and high ROE nature. Hence his equation basically excludes companies that have some form of debt because it drives his IV's lower and hence no margin of safety.
Haven't taken a look at this company personally as it didn't pass through my intial value screener, however theres some discussion about it on Roger's blog as well recently.
Thanks for your reply Kermit.
On RM's blog 24/8/2010, he rates FRI as an A1 having moved up from A4 after the financial year results. According to Commsec website, FRI has neither short term or long term debt. Not being an accountant, can't check that out, so I may be missing something.
Book value is 69c, ROE 21.1%, P/O 47% which gives a value around the $2 mark, depending on which R/R is used.
Interested in your comments.
Finbar is a property developer and I would say I've never seen or heard of a property developer who doesn't use debt.
Finbar's debt howerer rests in the project level. This allows them to keep a clean balance sheet at the corporate/group entity, as none of the debt has a charge of the parent company assets.
The other good conservative aspect of FRI is that all development facilities are covered by pre-sales that exceed 100% of the project debt. This means they won't build unless someone's buying the finish product.
Source from Dec 2010 company presentation.
Finbar is a property developer and I would say I've never seen or heard of a property developer who doesn't use debt.
Finbar's debt howerer rests in the project level. This allows them to keep a clean balance sheet at the corporate/group entity, as none of the debt has a charge of the parent company assets.
The other good conservative aspect of FRI is that all development facilities are covered by pre-sales that exceed 100% of the project debt. This means they won't build unless someone's buying the finish product.
Source from Dec 2010 company presentation.
Do you get to see the financial standing of these projects.
this is a gold mine for mis-representation ..company has no debt what about
the project it has its hand in? any of these projects is in trouble, it cause earning problems for its parents....
Sound like Macquaries Banks arrangement ...when those satellite funds blow up kiss goodbye those earnings....
Not saying anything wrong with FRI but this sort of arrangement I dislike
Not saying anything wrong with FRI but this sort of arrangement I dislike
The only thing I can do is look at the short term debt and cash flow in the consolidated accounts.
FRI does have a solid 21 year history of operating with this sort of arrangement, but as Buffett said
"If past history was all there was to the game, the richest people would be librarians"
FRI is one of those company's that you sort of have to believe in, trust that they wont make a mess of a big project and make good decisions in project selection and in awarding contracts, assembling a project team etc.
Its not that unusual to need belief in, and have a bit of trust in management.
Having trouble seeing the gremlins in FRI half hear report that caused the sp to fall 3.9% in a rising market.
Looks to me like capital raised will be put to work fairly quickly and the rewards will come fy 2012 and fy 2013. Is this too long term for the market?
Anyway for me I will hold and watch........
Having trouble seeing the gremlins in FRI half hear report that caused the sp to fall 3.9% in a rising market.
Looks to me like capital raised will be put to work fairly quickly and the rewards will come fy 2012 and fy 2013. Is this too long term for the market?
Anyway for me I will hold and watch........
Have to agree. Thought announcement was reasonable, and surprised that FRI dropped on a rising market today.
Has been a motivated seller/s for some time in this stock , and appears they are going on with it.
Will hang on for a while and see where it goes.
Think the fundamentals for the company are OK.
My attempt to take advantage of arbitrage situation (sell @ $1.195 and top up holding @ $1.15) during spp does not look so smart to me now.
Think I have found my answer.
The resent spp issued 3,423,654 shared to existing shareholders, 11,302,433 shares were issued to the underwriters (BellPotter).
Looks like BellPotter are reducing their exposure to FRI.
Does this mean less than 30% of the people take up SPP?
man bell potter if they cant sell them at 1.15 a pop on the market, that was a dud deal for them...
now i see why they try to prop up the price not to go below 1.15before SPP
something to keep in mind when you see price manipulation
Does this mean less than 30% of the people take up SPP?
man bell potter if they cant sell them at 1.15 a pop on the market, that was a dud deal for them...
now i see why they try to prop up the price not to go below 1.15before SPP
something to keep in mind when you see price manipulation
You would think Bell Potter would have seen it coming if they were scraping the bottom of the barrel to find investors.
They just $28.67 mil shares to their own customers prior to the underwritten spp
http://www.asx.com.au/asxpdf/20101208/pdf/31vgcvlhywcwg7.pdf
hindsight sell at 1.19 buy back today
I think the market didn't like this comments
"In this respect, a slow property market such as that being experienced in Western Australia presents us with a significant number of opportunities. In the past three months, three new joint ventures have been secured. These new projects will yield approximately 360 new apartment lots and provide a reward in earnings growth for shareholders by as early as FY2013."
How can a slow property market be good for developer? they need it to be red hot for the people to get interested and hopefully buy those apartments.
Anyway that how I would think, something I am missing?
Have they pre-sold these 360 Apartments? if not a comment like a 360 apartments and slowing market doesn't goes together well...
Unless pre-sold and all they do is build (even then it may have execution risk)
otherwise they counting a bird in the bush...
my 2 cents
Anyone know why this stock has been traveling down for so long? Inside information?
Anyone know why this stock has been traveling down for so long? Inside information?
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