2012 half year result, page-16

Dont you love it when financial networks do the work quickly and make mistakes.

Nine news finance did this article:

http://finance.ninemsn.com.au/newsbusiness/motley/8454775/api-shares-up-over-16-per-cent-but-one-to-skip

This was by:
Motley Fool contributor Mike King doesn’t own shares in API. The Motley Fool’s purpose is to educate, amuse and enrich investors.

I am glad he wants to amuse us because:

1. He correctly gets the EPS correct at 3.8c and the dividend of 1.5c correct but then promptly forgets its the half year so equates this to a PE of 10.8 and a dividend yield of 7.5%. OOPS What is wrong is that actually its only for half a year. so its half of the PE and the yield is also wrong.

2. He equates the debt to the Market Cap - Very good idea that that way under-performing capital is not accounted for but often in a rebuilding or turnaround phase that will always look sick as the market is waiting for results to rerate. So its simplistic given where API has come from.

3. He claims to have read the detail but does not in his commentary on poor cash flow reflect the $17 million received from the Insurance claim or the fact that there is still a substantial amount outstanding re the claim and there is also Loss of Profits to come. Yes the cashflow is not flash but it is improving.

4. The going concern qualification is a concern but it is as a direct result of past events that are being put to right so this has to be measured against improvements. No credit is given for a very substantial and large cornerstone investor in SOL who has the readies to help and no the company would not have to run to bankers but probably approach its cornerstone investor.

5 Motley Fool : " As I mentioned in this article, sometimes you have to dig a little deeper to find out the true nature of a company’s actual profitability and value. Investing is as much as about avoiding the dogs as selecting good companies. API is one stock to give a miss." Thanks for that I am willing to wait and see who is correct and take out an add about your in-depth digging. What out to lunch when you needed to put this article together.

This is a high risk high reward investment but its not a basket case and nor do I want your 3 top dividend stocks based on your in depth research.

Really irritating at times - wish they did not get my email from somewhere I cannot locate as well.