Thursday, August 17, 2006

AUN - Quick Analysis

Austar United Communications Ltd (ASX:AUN) has had a steady climb recently. This fits our new trend rules.

It has recently produced a report which shows it is finally making money as subscriber levels lift. This has been a good share since they cut out pirated cards which has been shown by the 48% increase in first half profits.

A quick look at the numbers shows :

P/E ratio : 25.60
P/B ratio : -22.43
P/E Growth ratio :1.02
P/S ratio : 3.74
Current ratio : 0.60
Quick ratio : 0.56
Interest Cover : 2.53

This numbers don't show a very good story as they have poor interest cover and a very high PE ratio.

They are looking at a 16c capital return to shareholders if they get a favourable tax ruling. This could be useful in that it would drop your purchase price significantly. The current price is 1.30. With the capital return it would only be $1.14. Earnings increased 40% this half year so if we expect the same for full year results the current earnings should increase to 6.4c. This brings our new p/e ratio at 0.064/1.14 which is 17 times earnings. Still a bit high.

This is a share worth watching as they will continue to grow. If we can get a good price for it where it is at least 12-15 times earnings it would be a good buy for the longer term.

Keep an eye on it .

Good Luck Trading.

At these levels the

1 comment:

Anonymous said...


Austar have a promising future.

They will be one of the first to benefit from the "Triple Play," convergence of voice, internet, and pay television.

Kind Regards.