I got Tower shares in the IPO several years ago. I also got shares in Westpac at the same time. It is amazing to compare and contrast the fortunes of these two shares. I am so disappointed with Tower's performance but each year I hold onto the shares upon belief that the fundamentals of the company are good and that it should be regarded as a growth stock. With it's low P/E it should be a good buy but looking at it historically it has been at best a dud. It's recent slide has been on the back of the news that it has picked up a number of customers from Southern Cross. One would think that this was positive.
These days I look at a company that from the outside, appears to be a good takeover target. There have been unsuccessful approaches on them before which suggested that Tower placed a much greater value on the company. I think that there is some problems with the share in this regard and this was further shown up with the bond issue.
If one were to rank all the financial services shares and look at the fundamentals I am sure that Tower would be one, if not the cheapest.
Can someone please explain this dichotomy, good fundamentals, poor performance? Are people waiting for positive news on the restructure or is the company just poor and I have read it totally wrong?
I too am a fundamentalist but believe that TA does offer some interesting insights into the short to medium term buy/sell behaviour.
See IRG research reports
