Forum Archive Index - September 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

OK this is the last thread I intend to start on RBD for a while, but I think 
the comparison between RBD and a mystery company that I shall 
identify only as XXX makes interesting reading:

1a/  RBD is one of the top three players in its chosen market in New 
Zealand.
1b/  XXX is one of the top three players in its chosen market in New 
Zealand.

2a/  RBD has three general 'sub categories of business' that go to 
make up its business model.
2b/  XXX has three general 'sub categories of business' that go to 
make up its business model.

3a/ RBD is expanding into Australia but, so far, is having trouble 
making it pay
3b/ XXX is expanding into Australia but, so far, is having trouble 
making it pay

4a/ RBD has few large capital requirements going forwards.  
Expansion can be piecewise as and where funds allow.
4b/  XXX has large capital expenditure requirements going forwards

5a/ Debt position of RBD.   If all profits are pushed into paying back 
long term debt it will be paid back in:

$30.377m/$11.014m= 2.75years

5b/ Debt position of XXX.   If all profits are pushed into paying back 
long term debt it will be paid back in:

$4,459m/$704m= 6.33 years

6a/  RBD Yield is 12% (imputed)

6b/ XXX yield is 5.8%(imputed).  The share price of XXX would have to 
drop back to $2.50 to give the same yield as RBD

7a/  RBD have just lost their chief executive.

7b/  XXX have just lost their chief executive.   Oops that is a little 
premature.   She hasn't been given her marching orders quite yet.
( Hell, I hope I haven't given the game away here ;-) )

I put it to you.    Which is the better income investment here?   By my 
reckoning it is RBD by a factor of two.    Yet there appear to be some 
out there who don't think RBD is cheap enough to buy into yet?

Hmmmmm

SNOOPY

discl: hold RBD (and XXX!)














--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Dogs have big tongues, so you can bet they don't 
bite them by accident"


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/