Forum Archive Index - November 2003

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

The title of this thread is in memory of loyal crew member (and part 
boat owner) 'Bongo', who has just jumped overboard.  Well almost.  I 
think he left a tennis shoe on deck.

Sliding sails (sic), and still no full time captain, since Captain Collier 
took to a lifeboat and mutinied.   Even the crew that are left have 
Salmon-ella.

As I said before, it doesn't look great and the price would have to look 
rather cheap to attract some new part owners to this boat.

Well, guess what?   RBD *is* very cheap.   So cheap in fact that in 
terms of yield RBD is the cheapest share on the market.  Cashflow 
remains very strong.    Sure, KFC quarterly profitability has been hit, 
but it makes little difference to the longer term outlook.  The new man 
at the top of the KFC sub-unit is the man that has just built up the 
Pizza Hutt business.   He hasn't been given the chance to show what 
he can do with KFC yet.

The profit downgrade is $2m.    Let's say that reduces NPAT to $9m in 
FY2004.  That is earnings of 9.5c per year, or an earnings yield of 12% 
based on a share price of $1.20.    There is no way I could think of 
selling a bond like that.   There isn't any 'opportunity cost'  alternative 
that is better.

If you want to 'get rich quick' go elsewhere.   But for the 'income 
investor' RBD still looks a 'must have' for any income share portfolio, 
by my way of thinking.

SNOOPY

discl: hold RBD






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