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RMBH

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Werner_1
Super Contributor
I am interested to discuss this one with you guys, why is the forecasted Earnings and Dividends for RMBH so high, i just saw that this increased today again since yesterday? I know its a consensus from the community as monitored by Profile Data, but this is much higher than that of SBK, ASA... Any ideas why this is so? is it correct or an error? Dividend Yield (%) - 2009: 10.05; 2010: 11.84; 2011: 15.06
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15 REPLIES 15
richardw
Super Contributor
That's a great question. I note it was downgraded on 17 April, but the surface numbers look fantastic.
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Werner_1
Super Contributor
yip, way better than any of its peers, i mean RMH/FSR as a team, i think the earnings of RMH comes down from FSR, but SBK, ASA, NED all have very different forecasts. FSR/RMH did have a decline in earnings at their interims, expects 2009 (what remained in the financial year) to be challenging, so i find it hard to believe such a good gain as indicated for June 2009. am i missing something?
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louisg
Super Contributor
Werner remember that they had a few big "once-off" losses in the recent past. If these "once-offs" do not repeat themselves, they will automatically "increase" earnings by about 20-25%(all else being equal). If they made R10 Billion last year less R2 Billion for "once-off" losses it = R8Billion profit. However if they can again produce R10 Billion this year, BUT without "once-off" losses then profit will = R10 Billion. A 25% "increase" in earnings. That's my understanding anyway.
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Werner_1
Super Contributor
Ah, Louisg, thanks i remember discussing this with you a while ago, i did remember the basics, not details, i think maybe this is the result from that forecasts. what is your view, would it be good entry point at current levels then? as you know i already hold some of these shares, just doing some research into what i have and where i can allocate future capital to in these times.
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louisg
Super Contributor
Werner as long as one is a long term investor, then I guess as long as one is investing in quality companies at fair or better value/prices, then "now" is always an appropriate time. I have RMH in my portfolio and still believe it to be a quality company. Would I buy at these levels, sure. BUT one size does not fit all. Everyone has their own strategies. OMO
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john_1
Super Contributor
Hello you two, do you guys have BATS shares in that crotchety portfolio of yours...also what effect on the share price do you recon if they made 25 to 30% more profit next year and sustauned that growth for the next 5 years... is there a model to calculate this...
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john_1
Super Contributor
As you know this fundamental stuff is not my area od knowlage...this is a serrious possibilty I might add.
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ACEP_
Regular Contributor
85% acq of Indonesian Co. making ciggies from tobacco and CLOVES! ptwew! Wonder what the share price would do if we spiced them up with Dbn poisen?
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Werner_1
Super Contributor
Hi John, Long time no chat... how you been, hows your patent coming along? Currently I dont have BATS shares in my portfolio, have sold off some smaller positions that i dont like, but have been looking at BATS as well. Like you said, excellent business, addictive to its customers, and customers are very brand loyal, among other attractive factors. I would guess if the company can grow by 25% for the next 5 years, its a excellent investment... I guess many people made models to calculate different things, i have a system that i try to calculate estimates for 5 years...
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john_1
Super Contributor
thats interesting because Clove cigs are now illigal in USA. So BAT probally picked up the company for a steal as a huge part of the clove markets has traditionally been the US... it is rumoured that it will cause the colapse in the clove trade, and effect massive numbers of clove farmers.... all part of uncle Sam's protectionistic point of view because menthol (an american idea) is still legal despite it being the largest source of Flavorant in the Cig business.
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john_1
Super Contributor
ya Werner. It has been the most amazing journey, and I have had such fun doing it. I have registered provisionals in SA. As a result I have not traded in almost a month which is amazing considering I was buying 20-30 contracts a day. So I am feeling very out of touch with the market.
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Werner_1
Super Contributor
excellent, when you telling us what its about, i am very interested! well done!
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john_1
Super Contributor
I am hoping to do the deal by the end of July...
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Werner_1
Super Contributor
ok, cool, cant you just give us a tip about what it is?
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john_1
Super Contributor
I already did go re- read the post
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