By David Press on
3/31/2011 5:27 PM
It would appear that for the second time in recent years, institutional investors are looking to make board changes at RHG (previously Rams Home Loans-pre GFC). Steve Johnson and members of the Intelligent Investor group failed in a similar attempt 18 months ago, only to have a group of institutional investors (holding 8.4% of the company) led by Karl Siegling and Geoff Wilson make a second attempt as announced today.
Today's announcement (attached to a substantial holding disclosure) stated that the group intends to requisition the removal of two existing directors (Greg Jones and John McGuigan) and replace them with three new directors (Malcolm McComas, Gabriel Radzyminski and Paul Jensen). Additionally, the announcement details the group's intent to ensure the company remains a listed entity and to distribute surplus cash as dividends (franked wherever possible). The existing share buy-back proposal...
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By David Press on
3/16/2011 12:25 PM
Australia's dividend imputation system is in place to prevent double taxation of company earnings and has been applauded by Australian investors since it's implementation in the 1980's. However it does mean that investor's need to perform a simple calculation in order to obtain the real return of their dividends when considering the franking credits applied. My recent blog on BHP's share buy back has resulted in a number of questions from fellow investors on how to calculate the real return from dividend payments, so I thought I'd post up a quick blog explaining it in simple terms.
The reasoning behind calculating the 'grossed' or 'franked' up returns (I actually prefer these terms given 'real return' actually requires inflation to be...
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By David Press on
3/11/2011 11:33 AM
In coming days, Australian investors in BHP ( BHP-ASX) will be receiving paperwork detailing the company's recently announced, off-market share buy back. With so many 'Mum and Dad' investors holding BHP, and the technical nature of the buy back being a little difficult to understand, I thought it might be helpful to outline the details as simply as possible for anyone struggling to get their head around it and make their decision a little easier.
In short, investors can opt to sell their shares (or a portion of them) back to BHP. The offer will be at a discount to the trading price of shares on the market, which begs the question, why would you sell? Quite simply, it is in the make up of the payment that you find the answer. A very small proportion of the payment will...
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By David Press on
12/12/2010 1:10 AM
Treasurer Wayne Swan, along with a number of Australian politicians have been waging war with Australia's big four banks over interest rates, and interest rate rises by the banks, above that of the Reserve Bank of Australia. First Westpac Banking Corporation ( WBC-ASX) took the bold move late in 2009 and was recently followed by Commonwealth Bank of Australia ( CBA-ASX). Each instance saw the majority of competing banks follow suit with varying additional increases. The banking industry has been citing tightening margins due to higher costs of funds as reasoning for their additional rate hikes (Australian banks source a large percentage of funding for lending from overseas wholesale markets,...
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By David Press on
6/15/2010 10:10 PM
With the end of financial year upon us, many will be looking to make tax loss effective sales of their under performing holdings. This is often an opportunity for the value investor to find some real bargains. Clarius Group (CND-ASX) may very well be one such play to consider given the stock has dropped around 25% from its early 2010 prices.
Clarius Group, like other cyclical stocks, were always going to get a beating when the market crashed in late 2008 and early 2009. They have again been hurt by the uncertainty Europe's debt issues have created and are now offering great value to the investor who believes in the overall world economic recovery.
On a financial basis they continue to look cheap. Based on average earnings from the last five years, their Price Earnings Ratio is an average of 8.38 (this takes into account recent raisings and complete dilution). I prefer the use of at least a 5 year average for earnings based indicators in order to smooth...
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