Challenger (CGF) & Lendlease (LLC)
Hi Team, Thank you for the excellent work. Without seeking personal advice your views on LLC & CGF please. Kind regards, Shabbir.
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Answer
Hi Shabbir,
Two interesting stocks here:
Challenger Ltd (CGF) – Last month Dai-Chi Life bought an additional 4.8% stake in CGF, taking its voting power to 19.9% lifting speculation of a bid by Dai-ichi who have a history of initiating with minority stakes before pursuing full acquisitions. The stocks not carrying any premium around a potential takeover when we feel like it should, i.e. its good value trading on 12.9x. Also, likely regulatory changes to the capital settings around Australian longevity products should be positive for CGF, helping to improve their capital position.
- With like this retirement income solutions company seeing good risk/reward between $7.50 and $7.75.
Lendlease Corp (LLC) – we discussed LLC about a month ago and not a great deal has changed. Hopes are high around capital initiatives as assets are sold to pay down debt. We don’t mind as an aggressive play around $5 but this has been a stock and business in decline for many years hence its high risk nature must not be ignored.
