AFR - Allco Finance Group

Hi

I was looking through the ASX companies and 1 company stands out
(Allco finance (AFG))

Has anyone been following this stock and how safe is it to hold?

it's low buy price @39c, the high yield 70% and low P/E ratio 0.6% make me think that it could be worth buying.

Is it better to wait till they disclose their financial position in the end of the financial year?

Cheers

 

They are 5 letters i would be staying away for a long time..... Allco isnt called investing at the moment, its called gambling...

 

Hi Bill,

Sim and Dave make good points... Allco certainly in news for wrong reasons. Hard to see how companies such as Allco, Centro, BNB etc. would fit into a general investment strategy (designed for long-term survival).

If you're taking an opportunistic viewpoint, taking a punt on companies that are hit hard, but might recover, then that's a strategy... but would need to check as much info as possible. All these companies are down because of finance problems - and general economic conditions are working against them.

Taking Centro as an example, I've heard vastly different opinions doing the rounds... some say they may get their refinancing and balance sheet back in order and be OK long term, others say they will be history by end of the year... hard for average Joe to really know what is being discussed behind boardroom doors.

I've heard of some people investing in these companies, but with very small percentages of their capital, if it works out, they make a nice little gain, if not, it's money they are prepared to lose (the old risk vs. reward thing).

Certaily a case of buyer beware.

Not making a suggestion one way or the other, just throwing couple of thoughts in to think about...

Regards,
Ilori

 

Thanks guys

In times like this I wouldn't mind spending some money on oversold companies and getting in on the cheap. I wouldn't put hundreds of thousands just maybe $20K or so on each 1.

How can I find detailed information on particular companies?
I can find price and historical data but I am interested in their asset holdings.

Cheers

 

Google, annual reports, their customer relations department.

Mark

 

Mark
Thanks, do you know if any any investment company collects such info
and make it available to their clients?
Cheers

 

Yes lots! but you have to pay for it. Try Aegis, Aspect Huntley, van Eyk.
Alternatively, if you have a discount broker e.g. commsec, e*trade etc they will often have access to some of this data.

Here's some free data from news.com.au which is supplied by Aegis by the looks of it.

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Cheers
N.

 

Bill,

What Nigel said. But the reports can be expensive and you can get access to the information yourself, it's just up to you to decide whether you are willing to invest the time to do the research yourself to save the money.

Van Eyk and Lonsec have pretty good reputations in the industry, if you're keen on buying reports, follow up with them. Personally, I'd much rather do the research myself, it sharpens the mind and you tend to get a more far ranging view, from highly optimistic (directly from the co. itself) to highly pessimistic (news reports, depending on the writer).

But keep in mind I don't have a gf/wife/family, so I have a lot more time than most people to dedicate to this sort of thing. Also, working in the industry helps *wink*.

Mark

 

Cheers guys

 

Dave,

I agree, but it's gambling with good odds I think.

I am thinking of buying Centro as well
How unsafe can it be investing in shopping centres?

I was going to wait for a bit longer but it's the end of the financial year and as soon as their financial situation is released prices could take off
or could fall so I should be ready to move quickly.

If the price takes off I buy,
if it falls I evaluate the situation and also buy.

Cheers

 

Mark

If you'd rather curl up with an annual report than a significant other...can I suggest you get out more and find a significant other!!!! *just kidding*

 

Typically toward the end of June the market is up (window dressing by managed funds). I wonder how the market will be in July?

Do you guys feel the subprime crisis is easing?

 

Then they can curl up together with annual reports!!!

Boom-tish!

*just kidding*...again

 

Tropic

I believe the sub prime crisis will ease, the US media are still making a lot of noise and seeing it as a problem for house prices falling but IMHO it won't be long before things settle down.

IMO it's the credit crisis we will have to watch and this problem will be around for a while perhaps for another 12 months or longer because the banks are afraid to lend to each other.

Cheers

 

Hi Tropic,

Perpetual were saying a while ago that most sub-prime resets would reset before September this year (that was back in February).

Advance Funds Management believe that since 1970, in Australia the average bear market duration is 14 months and the longest has been 21 months. (http://www.advance.com.au/resources/afm/downloads/advisers/Bull_and_Bear(5).pdf) Personally I think this is a great chart!!!

From October 2007, 14 months would bring us right into December 2008 and 21 months would take us into July 2009.

Cheers,

Dan

 

"Personally I think this is a great chart!!!"

Interesting info Dan.

Average Annual Bull Market Return: 27.5%
Average Annual Bear Market Loss: -29.4%

Based on average bull/bear market return (above) it makes you wonder, how passive investors are able to make any money in the market...

 

Sure... gains must be greater than losses, but annual averages alone may give a wrong impression.