I currently own Costa group shares. Your opinion on their retail entitlement offer?

Hi Paul
I currently own Costa group shares. Your opinion on their retail entitlement offer?

A: With the market trading at $3.29 and the entitlement issue priced at $3.00, you would be a little crazy not to take up the entitlement. If you didn’t want to increase your exposure, you could always sell some of your existing shares now, and then replace in the entitlement offer. The ratio is 1:6.33, and the offer closes on Monday 19 July.

I can understand any reservations because I have been burnt on Costa before. The variability of fruit and vegetable pricing/production is pretty hard for an investor – and now, it is largely a stock I avoid.

The brokers see upside – the consensus target price is $4.09, 24.3% higher than the last ASX price. Range is a low of $3.80 to a high of $4.60.


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