Posts: 190
Threads: 0
Joined: Mar 2014
Reputation:
3
Fully concur with your assessment about its high cash generation ability. The market didn't seem to have any negative views about the stock after release of the results, as the price is still about the same as before news release. I struggled whether to put my money into this stock or Straco (another money spinner), in the end I decided on CMHP because in the last 12 months, Straco's share price rose 111% whereas this one rose just 17%. The P/B is also in CMHP's favour (0.9) as compared to Straco's 3.2. I'm still keen on Straco, but not at 60 cents.
Posts: 42
Threads: 5
Joined: Mar 2014
Reputation:
1
25-04-2014, 10:49 PM
(This post was last modified: 25-04-2014, 10:50 PM by D.L.)
Same here. Haha, i missed on the boat for straco due CMHP on the november ( not to influence you in any manners). Pertaining to this, i would not wish to say anything as i am scared of confirmation bias.
Posts: 42
Threads: 5
Joined: Mar 2014
Reputation:
1
So, is it a good thing? Actually why does so many people care about the bonds conversion?
- Vested
Posts: 785
Threads: 9
Joined: Aug 2013
Reputation:
12
It actually dilute the existing shareholders' value in some way as the conversion price is at 84c quite significantly lower than the market price. The company was suppose to pay 1% to these bonds, but with the conversion the ex-bond holders would get 6/7% instead. In short, theoretically you and me would expect a smaller dividend though assume that profits remain unchanged.
Posts: 42
Threads: 5
Joined: Mar 2014
Reputation:
1
They convert and sell? How do you know that the parent is selling?
Posts: 2,278
Threads: 78
Joined: Oct 2010
Reputation:
34
10-05-2014, 11:33 AM
(This post was last modified: 10-05-2014, 04:03 PM by Nick.)
(10-05-2014, 10:34 AM)HitandRun Wrote: IMHO, it appears that the parent company is exercising and selling at the same time. The transactions are managed to avoid having to make any announcement relating to change in shareholdings...
The parent SOE do not own any of the Convertible Bonds. It is likely to be owned by numerous bond funds.
The CB was a great deal for minority investors - priced at a premium to the share price then and had a very low interest rate of 1.25%. Naturally, I hope it doesn't get converted but it is unlikely judging by the high share price currently. Personally, I expect the bulk of the conversion to occur in late 2015 when DBS guarantee expires.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Homepage
PR Newswire
