Forum Archive Index - November 2000

["P Maiden" <pmaiden@xtra.co.nz>]

Ben - thanks to Sharechat for the investor interview with Jim Collier of RBD. The questions were of a high quality and there was a good response from RBD. Overall it added significant value to this forum and an initiative I hope you continue with. Overtime maybe companies see this type of activity as a good means to communicate with ordinary investors.

When the recent market offer for RBD shares at 125 came out  I reluctantly sold mine.

Whereas AMP obviiously think they have made a good purchase many sellers thought the deal was too good to miss.

In my case it was an opportunity to turn a small 'paper loss' into a real gain. I had somehow managed to have too much exposure to RBD - because it had not made much sense to sell at prices below 110 they had been
trading consistently at.

 

Patience did pay of in this case - and the overall portfolio performance really changes when you eliminate a poor performing investment and the red turns into green.

Fundamentally nothing has changed in RBD. They are trading as they were and future prospects of the company are the same as they were. How investors valued the company should be unchanged. However the higher PE and lower dividend yield (at the 125 price) might deter some new investors. I still have a lot of time
for RBD.

So it will be interesting to see what happens to the share price in the future.

This actually is a good time to assess whether a major institutional shareholder does have an influence on how the market values a smallish company.

Will driving the price of RBD up to 125 take away some of the bad market sentiment that has kept the price down for so long?

Will AMP be an active investor if the price does not rise? There has been plenty of talk about how active fund managers should be  on this forum recently.

If things go to RBDs plans the price potentially can rise, maybe even to 200. This years results might be affected by the cost of the Eagle Boys integration. When this settles down the full benefits will flow through in subsequent years - improving profitability ratios significantly.

I will be watching with interest.. If the bad market sentiment goes away there is no reason why the price might not head north.

In the meantime I'll wait on the sidelines but might join in later - if RBD does take off there will be  future opportunities to cash in.

Still haven't found anything new I am happy with to reinvest in - most likely top up current portfolio.

Peter