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Grupo Casa Saba, S.A. de C.V. C Message Board

  • lallalie lallalie Nov 26, 2012 3:02 PM Flag

    Exceptional opportunity

    When Saba introduced its North American shares program (ADR) it was with the ratio 1 NYSE share = 10 Mexican shares. The history of both instruments shows that this parity has been preserved, up to the delisting decision.

    Then, as the company is legit, sound and without any financial concerns, its clear that the shares either have to converge back to this ratio or, if not traded anymore, should be swapped with this ratio for Mexican ones.

    That means 200% profit FOR SURE!!!
    You just have to wait for the company to announce this conversion and VOILA.

    Buy ALL YOU CAN, I did :-)

    Sentiment: Strong Buy

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    • Last quarter reported a loss. Debt is still quite high.
      Publications unit is in decline.
      Margins are thin. There's considerable currency-risk.
      Has SAB fired the advisor responsible for grossly over-priced acquisitions?

      On the other hand, de-listing will save some costs.
      TEA sale could help somewhat.
      The current quarter should be the strongest in the year.

      Individual investors can do better elsewhere in China stocks at the present quotes.

      Sentiment: Sell

    • Yes and no. the ratio is 1 for 10, that doesn't change. the problem is that doesn't trade much in Mexico. while the last print was 10.98 it was 2 weeks ago and for 98 shares. there is no telling where the market will be for an influx of shares. is it higher than SAB adr is predicting? i think so. so for every 1000 shares of the adr equates into 10,000 of the Mexican stock. we will have to see where starts printing. if u don't choose to convert your stock, u will receive cash IF a market can be found to sell your shares. I spoke with Bank of New York and they said it has happened where holders received 0 b/c they could not find a market. this process to receive cash take at least 6 months, i was told. there is clearly a concern here.

    • I suspect lack of clarification is a game for some easy money if shares are converted on Mexican exchange. Im not brave enough to play the game.