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.
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.
Well, either great minds think alike or fools seldom differ. Either one is fine with me.
So, is it a good thing? Actually why does so many people care about the bonds conversion?
- Vested
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.
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...
They convert and sell? How do you know that the parent is selling?
(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.
(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...
Even if they sell, I think it is alright.
Because the management had already shared that they wanted to improve the float for this counter. Such that it can enhance the value and enable them to raise capital easily.