Hi Guys, Shoprite issued 5% new shares, share price at one point fell over 7%, and closed 5.5% down. Whould one be correct in thinking that SHP had been over sold? and thus perhaps a small long possition may be made? Sasol over the past month has been on a steady downward trend. And has fell over 7%, perhaps a retrace back to R350. And if such a potential shorting opertunity? Any thoughts guys, or have I lost the plot?
Shares issued at R127.50. Par for convertibles R168 odd in 5 yrs time. So they are factoring in 5% growth p.a. Dilution is 5% now with another possible 4% conversion of bonds in 5 yrs. Therefore total dilution +/- 9%. Add financing costs of bonds at 6.5% p.a = dent in earnings. Therefore shares look too expensive at R130. More importantly, what will they be doing with the boodle. Me thinks forage into hardware - Cashbuild perhaps and/or buy property?