Great to see market cap has doubled to 12M however if you bought TAG a year ago....
-TAG Pacific is overvalued based on assets compared to the AU Diversified Financial industry average.
-Nil Return on Equity (3 Years)
-Earning growth -216% (-23.5% for 5 years)
For 1 YEAR
-46.4% Return on Equity
-11.7% Return on Assets
-40.7% Return on Capital
-TAG Pacific's level of debt (73%) compared to net worth is high (greater than 40%).
-The level of debt compared to net worth has increased over the past 5 years (14.9% vs 73% today).
-Debt is well covered by operating cash flow (25.6%, greater than 20% of total debt).
-TAG Pacific is making a loss, therefore interest payments are not well covered by earnings.
-No dividends likely for years.
-As a positive, CEO is remunerated appropriately, unlike Mr Ottaviano exceedingly generous salary.
MPower are going to have a tough time in the coming years as an independent entity, more so now with the burden of EMC. Two combined businesses that are long term loss makers doesn’t make for a good story.
I would anticipate more instability.
CCE Price at posting:
2.3¢ Sentiment: Sell Disclosure: Held
