Author Topic: Companies I didnt buy  (Read 2377 times)

galumay

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Re: Companies I didnt buy
« Reply #15 on: March 31, 2019, 06:45:31 PM »
HSN is another company I have looked at in the past, thought they were over valued in 2015 at around $1.80 and bought DWS instead, looked at them again this week, very rough range of value around $2.60 currently $2.90.

The biggest issue is that they dont seem to be creating any organic growth, so totally reliant on roll ups to create growth. CROIC is quite high at 15% but you would expect that with a capital light software business.

A pass for me.

galumay

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Re: Companies I didnt buy
« Reply #16 on: March 31, 2019, 06:52:53 PM »
GLB & HIT are 2 i had on watch list.

galumay

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Re: Companies I didnt buy
« Reply #17 on: March 31, 2019, 07:55:16 PM »
As at March 2019, 14 businesses I analysed and researched to the point of considering taking a position, and chose not to. Of them 3 would have made me money, 1 of which was taken over, only 2 would have made meaningful returns. 10 would have made a loss. 1 break even.
« Last Edit: March 31, 2019, 07:57:06 PM by galumay »

galumay

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Re: Companies I didnt buy
« Reply #18 on: April 14, 2019, 03:15:38 PM »
SKT Sky NZ, $1.16. I think it is worth nearer $2.50 on current earnings and cash flow at a quick glance, but a fair bit of debt and consistently falling earnings put me off. A definite potential contrarian turn around play.

CROIC is not bad either, above 10%.

What would earnings have to drop to for $1 something to be fair value? My guess is under 10c EPS, thats a significant amount less than current earnings, in fact its half the guidance for 2019.

Its hard to see a near future where SKT isnt a viable business in NZ, they have 40% penatration and while the Netflixs of the world will eat away at their margins and revenue with a high quality and real NBN, as long as they have the rights for sports they will survive. So what are the odds of sport going to streaming? Well I dont think its happened on a national scale anywhere in the world so far, but it could happen.

The Rugby world cup should give them a bump in revenue for first half 2020, NZ is such a rugby mad country and the World cup is in Japan in October.

The market hated the impairment writedown last year, and I would imagine there are more of them to come, so that is a potential negative,

On the upside a price of $2.50 is not a stretch if they meet guidance, so probalistically, maybe a 10% chance of sport moving totally to streaming seeing a collapse of the business , 10% * 0 =0 plus a 20% chance they meet guidance & impair again, 20% * $1 = 20c plus a 60% chance they meet guidance, no impairment and market rerates - 60% * $2 = $1.20 and 10% chance they exceed and market rewards 10% * $2.50 = 25c for a total expectancy of $1.65
- which is a reasonable return.

Trouble is this sort of calculation is so wooly, I could easily modify, 10% * 0, 50% * $1.20 (no change) , 20% * $2, 10% * $2.50 for a total of $1.25 - about where it is now.
« Last Edit: April 14, 2019, 04:14:06 PM by galumay »

galumay

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Re: Companies I didnt buy
« Reply #19 on: May 03, 2019, 03:31:19 PM »
EOS

Makes military hardware and also positioned for space expansion. Biggest negative was discovvering Fred Bart was Chairman, I saw his work at Audio Pixels and thats enough to put me off! Also huge gap between reported NPAT & FCF, book a profit, no sign of cash flow.

3/5/19 $3.30

galumay

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Re: Companies I didnt buy
« Reply #20 on: May 06, 2019, 12:03:05 PM »
EAS an accounting services business that I had my attention drawn to by Matt Brazier, https://www.mattbrazierinvestmentdiary.com/2019/05/easton-investments-limited-asxeas.html#more and his linking to DX Capital report, https://www.dmxam.com.au/10_04_2019_easton_investments_limited_asx_eas_.html

Its currently trading at about 97c and in a quick look I couldn't see that it was at any discount to value even allowing for some pretty good growth, I can see them making about 6c EPS this full year, which would give them a value round 80c, even if they manage to double the EPS to 12c in the next couple of years I only see a value of around $1-60 so I couldn't get much enthusiasm for the business.

I also could only see single digit ROIC, which is a bit low for my liking.



galumay

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Re: Companies I didnt buy
« Reply #21 on: May 10, 2019, 03:42:00 PM »
PNV, the spinoff from CSIRO with the burns and wound mesh platform, great product, just about breakeven, but with 600m shares on issue I reckon it would need NPAT of over $50m to be anywhere near fair value at the $1 something price it is now. Thats a big ask.

galumay

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Re: Companies I didnt buy
« Reply #22 on: October 30, 2019, 12:34:38 PM »
VOR, KPG PPK & SIT all go on the list, PPK & SIT because i hold indirectly thru EPG fund and I dont want to be too corelated, VOR  I just couldnt find conviction to buy & KPG has too much debt.

PPK $4.50 VOR 0.012c KPG $1.03 & SIT 0.069 oct 30 19
« Last Edit: October 30, 2019, 12:39:50 PM by galumay »

galumay

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Re: Companies I didnt buy
« Reply #23 on: July 22, 2020, 07:10:38 PM »
VHT, following a write up from Owen on Rask Invest, https://invest.rask.com.au/2020/07/22/buy-volpara-health-technologies-asxvht/ i decided to have a look.

For me the article is filled with narrative, but no realistic outline of how the business would ever get to justifying its current price, let alone any higher. I just through in a reverse engineering on the DCF, assuming its scales up, becomes a mature business with steady slow growth potential after it reaches that sort of scale. That would require the business to generate FCF of around 8c per share, or getting close to $20m FCF, on a business that has revenue around $12m now, thats a huge ask, even if it managed to multiply that revenue by say 1000% to $120m, it would be a great business that had sufficient FCF margin to generate $20m FCF. As an example CSL generates 8x or 12% FCF yield.

It just seems to me to be a massive speculative bet in a sector that most bets fail.

I will watch from the sidelines, its $1.46 in July 2020