Hi Peter,
A diverse and interesting question which we’ve broken down into its respective moving parts:
Coast Entertainment Holdings (CEH) – the stocks been languishing ~50c, or lower, for over two years so from a technical perspective we have no interest and as the MM Website shows only two brokers cover CEH although they have Buys on it with an average price target of 64c. This $190mn business is struggling to make a profit and for us it’s in the too hard basket.
Challenger (CFG) – this investment manager has been oscillating between $6 and $7 for over 3-years hence again from a technical perspective we have no interest. This is a complicated business to analyse, and over the years we’ve tended to avoid it for that reason. Last month’s earnings missed despite revenue being solid, and this has often been the case with CGF. At this stage we see far better alternatives in both the market and fund manager space, e.g. year-to-date Magellan (MFG) is up +17% and it’s a far simpler business to understand and value, while CGF is down over -5%, we aren’t considering fighting the tape here.
At this stage we aren’t considering the “exploding pagers and walkie talkies” too closely or it would be hard to get out of bed considering we virtually all own mobile phones. Who knows really, how all this plays out, which is sad, but as flippant as this may sound, worrying too much about things like this from an investment standpoint, has not been the way to go over time.
