Comments on: Headline Group Limited an Emerging Story

By: Dean Morel

Dean Morel — Fri, 16 Apr 2010 22:26:55 +0000

I have the MMC Contrarian Prospectus sitting on my desk as we speak. I didn’t sell my shares to GPG as I decided that having GPG take effective control increased the likely of something good happening and as I’ve said before I’m to tight to let that much value be “stolen” from me.
I tried to value GPG at the height of the GFC, but it was so complex that I fell back on a KISS approach, IIRC they have increased their book value at 20% for over 20 years, a magnificent record indeed. I did look a GPG again the other day and recall thinking they were historically undervalued.
I will be buying my full allotment in the 1:1 offer and am considering applying for extra shares.

By: Sean

Sean — Fri, 16 Apr 2010 12:26:14 +0000

Off topic but I noticed MMA bought clearview, very interesting. Which made me think about the value of GPG. Now that is an interesting stock to value!

By: Sean

Sean — Fri, 16 Apr 2010 12:10:08 +0000

Hi Dean and West Wind, from my understanding, clime got in when the company was divesting and put Roger on the board. So I think they deserve the return to 20c. The lowest risk time to buy this in retrospect would have been after they aquired the Mothercare license and the announced rollout and before the first store opened. The shares have gone from 20c to 30c since the first store opened so it is not a bargain or cheap anymore. The idea to have a perinatal/early childhood nurse in the stores is a good idea in my opinion and actually would be quite helpful to mothers but I haven’t seen it in action. Unfortuantely I don’t live in Melbourne and haven’t been able to check out the store.

If they do acheive sales of 160M (optomistic) and earnings of 10M then the 5 year PE is 4 which doesn’t sound that much of a bargain either. Which is why I bought 3k of it for a punt rather than say 30k.

It might fall back to 20c or it might go further. Highly speculative.

By: Dean Morel

Dean Morel — Fri, 16 Apr 2010 07:53:22 +0000

Hi West Wind, I did notice that and figured that was why Roger M was on the board. Checking major holders is always high on my DD list, in fact it is often the other way round, i.e. I find companies to investigate by keeping an eye on key players I respect.
I’ve asked my partner to check out the Mothercare at Chadstone and next time I’m out that way will pop in myself. I wonder what Clime saw back when they invested?

By: West Wind

West Wind — Fri, 16 Apr 2010 07:42:47 +0000

Hi Dean

Pleased to hear you have such a high opinion of Mothercare business. Clime Investment Management (CIW) which we discussed briefly a month or so ago hold a just under 10% interest in HLD. Its in their books at $0.13 a share at 30 Dec 2009, so the rise to $0.33 looks positive.

Yes we do hold a few CIW.

Regards West Wind