Noosa Waters Share Investing

The above is an interesting investment opportunity for lateral thinkin g investors. CYA is an LIC that has a below average investment performance. Normally I would not be intersted, however following some activism by Wilson Asset Management (WAM) their are significant changes afoot, which may present a good investment opportunity. The potted version is;  The old investment manager has been sacked  The new investment manager (WAM), has a very good record of sustained out-performance. LIC's managed by WAM typically sell at a significant premium to NTA.  They are re-capitalising the business through a capital raising ( Taylor Collison / Bell). Details of the prospectus are not out yet, but expect the price to be near NTA. I have done  review of CYA in my LIC blog. If you are interested let me know and I will send you an invite to the blog. Depending on the content of the prospectus, I will probably invest in the recap.

The following article appeared in the AFR 1 April 2017 by Tony Featherstone. (Please excuse the formatting, AFR make if difficult to cut n paste. Never the less, a good read The recent takeover bid for Spotless Group Holdings highlights the volatility of some sharemarket floats – and the opportunities for investors who avoid the hype around new listings and watch and wait for better value down the track. Spotless raised $994 million in an initial public offering (IPO) in May 2014. Shares in the private equity-backed firm tumbled from a $1.60 issue price to 70¢ earlier this month as the market lost confidence after earnings downgrades. Downer EDI's takeover bid drove Spotless shares 50 per cent higher in a day. Investors who bought Spotless earlier this year got the company for less than half its IPO price. Spotless is an extreme example of IPO volatility. Many floats rally in their first year as a listed company, then slump as reality sets when earnings forecasts...

IPO is short for initial public offering. It is an offer to buy shares just before the stock is listed on the stock exchange. They can be a profitable way of investing but they also carry more risk that the share price could fall, quickly. This type of investment requires more due diligence than normal to determine if the IPO is for the next stage of growth or whether the vendor has extracted everything out of it and is passing on ownership so that they can move onto the next"project". Historically, the following types of IPO's have done better than most; a1) Where the Government is privatising a Government owned business. Eg CSL, CBA, TLS, ARZ, MPL a2) Where a large corporation is divesting a division to it's shareholders. Usually referred to as a spin off, Eg BHP - S32, NAB - CBYG, MQG - SYD a3) Where the vendor wishes to retain most of their shareholding in the business. The following type of IPO's often carry an elevated risk of poor performance; b1) W...

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