Join our investing community

AFR - Allco Finance Group

Discussion in 'Shares' started by Billv, 24th Jun, 2008.

  1. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    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
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Have you done a Google search? Allco has been in the news for all the wrong reasons:

    Sep 2006: Sprung: Allco Finance fiddles the numbers and makes them fit - Business

    Jan 2008: Investors may be spooked, but Allco Finance's problems look manageable | theage.com.au

    Mar 2008: Allco Finance starts to unwind | The Australian

    Mar 2008: Three Allco Finance directors resign | The Australian

    Mar 2008: National Australia Bank appoints agents to take possession of Allco Finance Group shares | The Australian

    June 2008: Allco to ease debt, US wind farm first asset to go | The Australian

    ... proceed with caution!

    Is that yield based on current price and previous dividends? Have you looked into forecasts for dividends going forward given the trouble the company has been in?

    I'm not saying it is a good or bad opportunity - I haven't researched it ... I just remember hearing about it regularly in the news in relation to credit problems. It may well be fundamentally sound and oversold - dunno.
     
  3. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    They are 5 letters i would be staying away for a long time..... Allco isnt called investing at the moment, its called gambling...
     
  4. ilori

    ilori Well-Known Member

    Joined:
    27th May, 2007
    Posts:
    75
    Location:
    Mt Macedon, Vic
    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
     
  5. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    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
     
  6. Mark Laszczuk

    Mark Laszczuk Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    793
    Location:
    Brisbane
    Google, annual reports, their customer relations department.

    Mark
     
  7. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Mark
    Thanks, do you know if any any investment company collects such info
    and make it available to their clients?
    Cheers
     
  8. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    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.

    Auto Login Error

    Cheers
    N.
     
  9. Mark Laszczuk

    Mark Laszczuk Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    793
    Location:
    Brisbane
    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
     
  10. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Cheers guys
     
  11. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    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
     
  12. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    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*
     
  13. tropic

    tropic Well-Known Member

    Joined:
    13th Sep, 2006
    Posts:
    131
    Location:
    WA
    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?
     
  14. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Then they can curl up together with annual reports!!! :)

    Boom-tish!

    *just kidding*...again

     
  15. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    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
     
  16. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    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
     
  17. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    "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...:confused:
     
  18. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Actually it is quite simple ... the numbers quoted are annual averages.

    If you have 2 years of 27.5% average growth and 1 year of -29.4% average annual loss, you are still ahead.

    The key is that the number of bull years needs to be greater than the number of bear years (which it generally is - otherwise the market indicies would still be where they started - or lower!)
     
  19. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW

    Sure... gains must be greater than losses, but annual averages alone may give a wrong impression.:p
     
  20. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I agree - stats can always be used for good or evil (sometimes at the same time - depending on your point of view!) :eek:

    I personally have a huge problem with the rolling averages quoted by the funds management industry and the lack of actual historical annual performance data made available to the public. Hence my Compare Funds website.

    Now if I can just get the data I need :rolleyes:

    (PS. working on it still - if things go to plan, I'll have the data I need later this year).