Star (SGR) turnaround
What are your thoughts on an investment in star for a turnaround; perhaps a short 6-12 month play?
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Answer
Hi Scott,
We wouldn’t call it an “investment” it’s more of a punt which is ironic considering its business model. Wilson Asset Management (WAM) has long been touting value in SGR based on the value ascribed to their hotel assets, which was the reason why they owned 143m shares, or 5% of the company, however, with uncertainties around fines and whether or not the operating model will actually survive, there are too many question marks on how the value of the accommodation component could be realised, with the debt holders in a much better position that equity holders right now.
- From our perspective, there are simply too many variables with a trade in SGR over the next 6-12 months.
