i am trying to get my head around the true motivation for the deal, the different scenarios on existing shareholders, effect on share price etc. what is everyones thoughts on this ? and why would i want to buy the share in the proportinate offering @ R15 when the share is currently trading at a value lower than that ?
thanks skaaptjop - i have read it and while i agree with the fundamental analysis.... it is not difficult, but obvious that grindrod shareprice profited from spiked earnings on their IVS and other biz in the boom time a few years ago and that prior to that the share price mirrored their NAV, as it does now. the remgro offer does not change this very much. yes, EPS is adversely affected because earnings have not changed with the injection of capital and resultant increase of shares in circulation (yet?) but NAV per share increases somewhat as a result also. it comes down to exactly why they want the capital and if their rationale and ultimate utilisation of the cash is sound and that the funds are not a veiled bailout of a troubled gearing scenario. confidence and forecast thusfar has consistently been buy/hold. shipping in general is a troubled affair right now, everywhere. this is nothing new and cycles will by definition re[eat themselves. but gnd is no venture cap company. surely longterm the view must be hold. else one may want to divest altogether from the markets.
As an investor, I like to buy extreme price or extreme momentum (with fundamental support). For GND, I would want to be buying on those days when the price drops by 5 or 6%. Right now, I would pick up GND on anything below R12 per share. My problem with GND is that their diversification strategy is great and all - but the margins on their new industries are dwindling - which is not a great sign. So it falls right back to shipping again - whether they like it or not