Tails, my observations are that the recent share price for Commander has reflected the high risk and even the fact that it could go under and all assets sold off.
The drastic measures taken by the new management are necessary if there is to be a significant turnaround in the companies fortunes. Simply continuing with the same strategy as before was clearly not the answer as that was the reason the company went into crisis mode. Clearly ,if some non core assets(non core) were not sold off a recovery would be less possible in terms of meeting financial committments. The idea is to diminish debt and be left with a structure that is sustainable and able to generate good returns in the future. further, under such a structure, a re-energised Commander could become an attractive takeover or merger prospect.
My observations are also that Hunter Hall specialises in identifying underperforming companies to invest in and through a revitalised Board and Management assist in turning them around to create significant value. In these circumstance I expect that CDR will now have well and truly started the road to recovery and will hopefully become a powerhouse in its field of operation.
Cheers, Actuary
(The content above are my opinions only. You should do your own research when making investment decisions)
CDR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
