Amused, I tend to agree that caution is required for this one. I've held this one for about 2 years now after buying in at 48 cents. It's brilliantly placed in terms of market positioning. All the well-known brokers are each 100% owned by a single bank (RAMS, Aussie) so they're not independent anymore, regardless of what their advertisements say. So YBR's stated goal of becoming the largest independent financial advisor and broker is achievable (possibly already has been).
BUT you have to keep in mind that this is a joint venture between two parties with a notable history of nest-feathering! Macquarie and Bouris both have ensured that they benefitted mightily from their enterprises, and there are examples where the other investors have done nowhere near as well. Factors to be wary of, and probably also go a long way toward explaining the flatness of the share price include:
1) History of nest-feathering from the principal backers.
2) No time-line to profitability or dividend yet.
3) Extremely favourable remuneration package for Bouris in addition to his shareholdings.
In favour of the company, and among the reasons I bought and continue to hold include:
1) Said extremely favourable remuneration does include quite a weighty component of incentives that are contingent on share value growth to the benefit of all investors.
2) Macquarie's shares are on an equal footing to all investors.
3) Very strong track record of delivering the business plan. The maiden positive cash flow this year is a prime example.
4) Bouris' commitment to other enterprises is constrained by his employment contract, so this is his main game (for the moment).
It's a balancing act. But then... it's a stock!
YBR Price at posting:
57.0¢ Sentiment: Buy Disclosure: Held
