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I currently own Capitol Health shares and they are offering a share purchase plan. It says $0.766/share with a minimum purchase of $1000.
Do you think this is a good idea?
A: Thanks for the question.
Capitol Health (ASX Code CAJ) is not a company that I am particularly with.
I note that the share purchase plan, where you can subscribe for between $1,000 and $15,000 worth of shares is at a price of $0.766, is at a discount to the current price of $0.81. Provided the discount remains, then on that basis, you would probably subscribe for the issue.
CAJ’s price has risen quickly – and they completed an institutional placement to fund an acquisition only last month (December) at $0.52 – so my inclination is to be a little wary.
Only one of the major brokers rates the stock – Morgans. Their analyst currently has an ‘add’ recommendation on the stock, with a target price of $0.90.
Hope this helps.
