Intelligent Investor

Sunland Group

By · 26 Sep 2012
By ·
26 Sep 2012 · 2 min read
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Recommendation

Sunland Group Limited - SDG
Buy
below 0.75
Hold
up to 1.20
Sell
above 1.20
Buy Hold Sell Meter
HOLD at $0.94
Current price
$0.07 at 16:41 (31 October 2023)

Price at review
$0.94 at (26 September 2012)

Max Portfolio Weighting
3%

Business Risk
Very High

Share Price Risk
Very High
All Prices are in AUD ($)

Sunland Group recently sold the Palazzo Versace Hotel on the Gold Coast for $68.5m, just below book value. Once the debt over the hotel is repaid Sunland will bank $41.1m. This is a favourable development that results in Sunland once again boasting net cash on its balance sheet. This change reduces the risk in the business and will help fund its aggressive share buyback program.

This cash will also help Sunland easily foot a likely legal bill, of approximately $10m, relating to a recently lost case regarding its Dubai operations. Sunland’s share price has risen 7% since Sunland Group: Result 2012 from 29 Aug 12 (Hold – $0.88) and remains a HOLD.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.
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