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dropping like crazy?

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sammi
Occasional Contributor
ok not as bad as ABIL but dropping none the less. Any ideas on the reason for this?
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12 REPLIES 12
Valued Contributor
they struggling to survive
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Not applicable
well, their move into the affordable housing space is to be watched - they have around R3bn in projects there, but how that R3bn is actually calculated (personally I think it is a management thumbsuck) is to be looked at. This is the same space as the highly successful Calgro (R10bn in pipeline) and the highly unsuccessful RBA. Problem is you need cash for these types of projects. Not the highly publicized 'pseudo cash' position of traditional construction companies (you know - the kind that sits in escrow for performance bonds and warrantees' - but the real stuff. The stuff that needs to be drawn down on full turnkey delivery projects, where payment is made 100% on completion when you get to sell the units you developed. And here is the kicker - I don't think ESR has that kind of cash
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Newbie
Contributor
Here is my question. I read an article stating the NAV of Esor is 168 cents a share. To me NAV means assets less liabilities. If this is the case, if the company doesn't survive shareholders should get out more than the curent 30 cents a share it is trading at. I doubt 168 cents is realistic, but surely 25% of this is reasonable? this is about 40 cents. I watched Old Mutual drop to 498 in the crash and their NAV was 955. Luckily they never hit the bricks, but same theory. Am I way off on this one?
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Regular Contributor
As far as i know your right..... but the bigger the gap between the share price and the NAV the less confidence there is kn the shatd. I think they also have some payment of 40 cps in 3 years of the transaction.... i watched the interview with the ceo and he's pretty confident....lol....but they usually are!!!...the further it falls, the better opportunity....my own little humble opinion is that the sell off is overdone.....i dont like the sector but the recent results have not been that bad....and of course the goverment needs to catch a wake up.
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Highlighted
Super Contributor
When they sold their bread and butter geotechnical division to survive, the writing was on the wall. Now s*****ing around for something to lift revenue. IMO, I don't think they will see out this cycle but, if they do,I will buy the CEO a beer.
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Valued Contributor
it'll be worth as much as ABL soon enough
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Not applicable
Newbie - NAV is a blunt instrument, and it is ESR's reported book value of their assets. The problem is to understand what those assets are actually worth. So in ESR's case - they have R150m in goodwill - so that is worthless. They have around R650m in debtors - so you will have to determine if those debtors will pay, and how much you can cede the debt for - in the case of construction companies, those debtors will be hiding behind performance bonds and warrantees, so also not worth much. And fixed assets are at book value - so what can they actually be sold for?
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Gert15
Contributor
Clearance sale ala PHK???
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Newbie
Contributor
I think he is going to make good. I have watched his actions over the years and am pretty impressed. A little bet? A case of beers for you if they go belly-up. A case of beers for me if they trade at over 40 cents a share after the next set of results due in November? I drink Tafel lager!
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Newbie
Contributor
Thank you for that info. Makes more sense now! I still feel they will make it. I like their story and if they put it all togather, the company should go back to 100 cents a share. Let's face it, for the company to be on a 10 PE it needs to have earnings per share of 10 cents! To justify a price of 40 cents, they only need earnings of 4 cents. That means a profit of about 16 million! From making 150 million, I am sure this can be done....hopefully! Watch this space. I have a lot of shares and plan to ride it up or down, teither way!
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Frequent Contributor
Below 30c might just see them surprise to the upside. I am a buyer, as this damn counter owes me a lot of money. lol
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Newbie
Contributor
I feel the same way! I also own Murray and Roberts. So Esor is now at 20 cents and Murray broke below R21 today. I know I am no help to you, just thought you would feel better to know you aren't alone out there. I am just sitting on my hands and hoping for the best. Panic selling now will be, in my humble opinion, a mistake. Good luck!
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