Forum Archive Index - April 2002

["dsproul" <dsproul@corsairmarine.com>]

Hi Jefley,

 

I haven't looked closely at CLI's result, but discussion on one chat site is there was still lingering uncertainty about how they calculate their profits (recording as revenue before it is actually earned).

 

When I looked at last year's annual report , I was satisfied  ( and so were the auditors) that profit was being correctly recorded, and in line with insurance industry standards.   What confuses people is that some of the profit is not in the form of cash.

 

On the surface , it would seem that more conservative investors may be dumping the share because of the current publicity over accounting methods - the latest being collusion by US company Waste Management and it's auditors to overstate profits by some $20 billion I think was the figure.

 

Another factor to consider: A Packer company holds about 20% of CLI.  I think they would be  double checking all is above board after the embarrassment of the One Tel Affair.

 

To me , the fact that CLI's annuities are backed by concrete and mortar and not stocks, shares and bonds  is in some ways a plus, if the buildings are reasonably modern and have good long term tenants, which I think most have.

 

If CLI continues to be hammered , guess it will offer a chance at re-entering.  Been more into resource stocks over the last few weeks, while keeping an eye on CLI. The past support level seemed to be around $2.90, so I guess that's about where CLI is now. Is their P/E ratio about 4 at this price? What I like about ClI is that they have consistently come in at or above what the say they will earn

 

Most interesting to see that they received their UK licence to operate (announced today) so they are able to operate in a market many times the size of Australia.

 

Never followed CLH closely, would not like to offer an opinion.

 

Probably nothing new in the above, just what I had in the memory bank.

Cheers,

David

  

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