Question of the Week

Questions of the Week

Co-founder of the Switzer Report
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Question 1: Has the price for the Westpac Share Purchase Plan been announced? Is it too late to withdraw my application?

Answer (by Paul Rickard): Yes, the application price will be $24.20. This is based on the trading of Westpac shares on the ASX over the period 26 November to 2 December, less a 2% discount. If you do want to withdraw your application, you must lodge a request by 5pm (Sydney time) on Friday 6 December. Next week, Westpac will announce details of the allotments, and any scale back.

Question 2: What is your view on Longtable (LON). I have held shares for a year. Do you think it will bounce back in the near term?

Answer (by Paul Rickard): I think it might be a long wait. Longtable, which is the owner of three premium lifestyle food and beverage brands – Maggie Beer, Saint David Dairy and Paris Creek Farm – has had a very difficult year, culminating in the resignations of the CEO and CFO and the retirement of the Chairman. They have just confirmed the appointment of Chantale Millard as CEO. She previously ran the business in South Australia, including the Maggie Beer business. With all this upheaval and missed goals, the market will want to see some demonstrable progress before it rerates.

Question 3: Why is REA Group’s stock price over $100 when few have achieved that threshold?

Answer (by Paul Rickard): It is a great company, with a track record of top-line and bottom-line growth, and it is number 1 in its market. It is so much better than Domain (DOM). But the price of $100 is just one variable. The other variable is the number of shares on issue. Just because a share is over $100 doesn’t mean it is a great company, or better than a share that is trading at $1.00.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.

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