# MMS - McMillan Shakespeare



## absolut-advance (25 November 2005)

Excellent Figures....Profit Margins, Eps Growth, ROE growth, Adjusted Profit Growth, Lowish PE/PEG, Masssive Increases in Sales Revenues.

Rumours they could be a target for Talent 2 to swallow, as they are into Salary Packaging.

EPS growth from previous year moved up massive 620% to 7.55 cps. 

Return on Capital (ROE) moved from: 5% to: 32.5%

Dividend Yield is 2.4 cps.

PE is industry average at 19

PEG is low at .19

Adjusted EBITA Profit moved UP from: $987,200 to: $7,915,000

Share Price has gained relatively modest 28% plus in last 12 months....

Market Cap is currently approx: $127 million.  

Check out the depth today! Volume! Only 2 sellers at the moment.


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## Profitseeker (26 November 2005)

*Re: MMS McMillan Shakespeare*

Who are talent 2?


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## absolut-advance (26 November 2005)

*Re: MMS McMillan Shakespeare*



			
				Profitseeker said:
			
		

> Who are talent 2?




Hi profitseeker here is talent2 homepage, click on the link...

www.talent2.com.au/


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## Profitseeker (28 November 2005)

*Re: MMS McMillan Shakespeare*

Thanks.


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## Profitseeker (28 November 2005)

*Re: MMS McMillan Shakespeare*

Where has the news come from that Talent might be looking at this acquisition?


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## absolut-advance (28 November 2005)

*Re: MMS McMillan Shakespeare*



			
				Profitseeker said:
			
		

> Where has the news come from that Talent might be looking at this acquisition?




Just rumor and general talk within the industry, nothing set in concrete of course.


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## Alien (1 December 2005)

*Re: MMS McMillan Shakespeare*

Hi,

Just wondering your thoughts of the impact of PAYG tax scales next financial year. Top tax scale of 48.5% commencing at $125,000. 42% at $95,000. Would this not make salary sacrifice not as affordable for employees? 

Your views appreciated. 

Regards
Alien


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## Ken (26 September 2007)

MMS

Performed really well over last 3 years, anyone wish to comment on this boring stock which has been a winner since it arrived on the markets.


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## Uncle Festivus (27 September 2007)

All I know is that our company has just ditched them for another mob, due most likely to their sub-standard service. Not one person I have talked to in our comnpany has a good word for them (in fact making many formal complaints), and I personally have found their services extremely lacking.


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## The Trooper (25 January 2010)

*MMS - MacMillan Shakespeare*

Anyone - Macmillan shakespeare dropped by over 17% today (25th Jan 2010) after falling first last friday for no apparent reason - can anyone shed any light on this? This stock has been climbing back to pre-2008 levels over the past six months then this all of a sudden...good time to buy or to get out of a sinking ship?


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## nomore4s (25 January 2010)

lol, I own these and didn't even notice the price drop till I read your post.

I have no idea why they have dropped so hard but I am pretty much free carried so I will watch the price action over the next few days and then decide what to do with them.


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## Sean K (25 January 2010)

Oh dear. 

Critical break of support zone. 

Looks like panic stations / stop losses from tech traders.

Major support at $3.00 - $2.50.

Looks like a great knife catch to me.


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## YELNATS (25 January 2010)

Interesting. I went to an investors seminar in Sydney a little before Christmas and the main speaker was glowing in his praise for this company.

I have been watching them ever since but don't hold.

There doesn't appear ay announcement explaining the price decline.


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## nomore4s (25 January 2010)

kennas said:


> Oh dear.
> 
> Critical break of support zone.
> 
> ...




Only about 67mil shares on issue too so any run on stop-loss triggers could cause a run on it, will see how it bounces back in next few days and whether any news comes out before I do anything with my holdings


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## skyQuake (25 January 2010)

nomore4s said:


> Only about 67mil shares on issue too so any run on stop-loss triggers could cause a run on it, will see how it bounces back in next few days and whether any news comes out before I do anything with my holdings




Caught some of that second knife, just some big guy dropping knives from the roof. Will be interesting to see how it reacts on wed.


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## Sean K (25 January 2010)

skyQuake said:


> Caught some of that second knife, just some big guy dropping knives from the roof. Will be interesting to see how it reacts on wed.



Looks like some general panic selling across the board to me. Could keep going, but more likely to be some bouncing about. For MMS, 3.00 might have been a tech bottom. Very strange reaction to....nothing....


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## skc (27 January 2010)

kennas said:


> Looks like some general panic selling across the board to me. Could keep going, but more likely to be some bouncing about. For MMS, 3.00 might have been a tech bottom. Very strange reaction to....nothing....




It's not nothing anymore... it's just rumours however.

http://www.asx.com.au/asxpdf/20100127/pdf/31nbbzz1zy7b0n.pdf

Amazing how government reviews can leak like this.

Reminds me of IMF which went on a government-induced dumping and has yet to bounce back.

Longer term this is probably an opportunity. There will always be salary packaging. Having some new rules simply means that employers will have to pay MMS again to come up with new ways to package salaries around the new rules...


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## skc (28 January 2010)

Still falling... $3 was defended for a bit today before buyers gave up.

Fundamentally, this stock is now pretty cheap.

EPS last year ~30c and dividends at 19c. This year probably at least 15% growth for an EPS of 34.5c. At $2.8 that's PE of 8.

This reminded me of Cabcharge's fall last year... and that was with a confirmed ACCC investigation. Yet CAB managed to regain most lost ground despite that.

Discl. I hold from today...


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## condog (28 January 2010)

Fundamentally this stock is a steal....

Even with the Henry review its hard to see their earnings affected by 50%....

Stupid lemmings.....stupid....stupid.....stupid....

Disc - i did own, now i do not own, but probably soon will


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## skc (28 January 2010)

condog said:


> Fundamentally this stock is a steal....
> 
> Even with the Henry review its hard to see their earnings affected by 50%....
> 
> ...




Well apparently the impact could very well be 50%...



> Valuations of McMillan Shakespeare are highly dependent on maintenance of the present FBT regime. Analysts covering the stock see value above $5 a share in the event of minimal change, which compares with Monday's close of $3.26.
> 
> However, one analyst noted that a worst-case result would see McMillan Shakespeare ''lose half, if not more'' of its business.




http://www.smh.com.au/business/mcmillan-shakespeare-frays-at-the-fringes-20100125-mulj.html


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## craft (23 February 2012)

MMS is one of my long term holdings.

Its half yearly looks good to me. No market reaction – probably because a solid report was already priced in.

The key point to me from the results was 







> Extension of credit lines on better terms reinforces MMS business model’s “bankability”.




The stock does have legislative risk – that aside it ticks most other boxes for me. The combination of the cash cow remuneration division coupled with the cash hungry asset leasing business makes a pretty formidable business. Heaps of cross sell opportunities and scale efficiencies still to come from this company over time.

The remuneration business is the jewel in the crown. Because of their scale and established systems they are far more efficient than any “in house” processing of the payroll implications arising from novated leasing. Switching cost means they don’t lose too many customers once they have them. Providing operational leases and lease funding gives them package deal and cross sell opportunities that competitors don’t have, plus something to do with all the free cash flow from remuneration services.

Historic share price appreciation since listing ~26%. current dividend yield around 6% grossed up.


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## GG999 (19 March 2012)

craft said:


> MMS is one of my long term holdings.
> 
> snip
> 
> Historic share price appreciation since listing ~26%. current dividend yield around 6% grossed up.




MMS has increased its dividend every year whilst increasing its Book Value per share every year.

I've been looking for other companies that can achieve this, as a preliminary screen before studying further. 

Do you think that this is a reasonable first screen?


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## craft (10 December 2012)

MMS pops into the ASX200 in the latest S&P rebalance.


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## skc (10 December 2012)

craft said:


> MMS pops into the ASX200 in the latest S&P rebalance.




These seem to ahve fairly minimum impact these days. The big IB's have forecast a quarter ahead of new inclusions (and they are usually right). In fact, if I was S&P I will just let the IB's do the work on who should be included!


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## craft (10 December 2012)

skc said:


> These seem to ahve fairly minimum impact these days. The big IB's have forecast a quarter ahead of new inclusions (and they are usually right). In fact, if I was S&P I will just let the IB's do the work on who should be included!




Not suggesting in MMS' case that this should cause a price reaction - just throwing a little light on a rarely discussed company that has grown into the ASX200.

It does seem the lumpiness around changes that used to exist is mainly sorted but I think inclusion in the indexes and hence in more peoples universe of selectable stocks has an effect on valuation multiples over time.


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## skc (10 December 2012)

craft said:


> Not suggesting in MMS' case that this should cause a price reaction - just throwing a little light on a rarely discussed company that has grown into the ASX200.
> 
> It does seem the lumpiness around changes that used to exist is mainly sorted but I think inclusion in the indexes and hence in more peoples universe of selectable stocks has an effect on valuation multiples over time.




That's true. Inclusion in an index cant' hurt.

MMS is a very unique company and it's a great business if not for it's fat tail risk in regulation changes...kind of similar to CAB in my mind. One needs to be able to price the tail risk appropriately (rather than totally avoid it) to make these kind of plays work (or just lucky and ignorant).

I sold these back at ~$6 so I am not very good at pricing that risk (or the market is wrong)...


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## craft (11 December 2012)

skc said:


> That's true. Inclusion in an index cant' hurt.
> 
> MMS is a very unique company and it's a great business if not for it's fat tail risk in regulation changes...kind of similar to CAB in my mind. One needs to be able to price the tail risk appropriately (rather than totally avoid it) to make these kind of plays work (or just lucky and ignorant).





Risk is the possibility of different outcomes – the poorer business outcomes haven’t come to pass. Happy to take that whether it is luck, ignorance or reasoned probability.








skc said:


> I sold these back at ~$6 so I am not very good at pricing that risk (or the market is wrong)...





I’m not sure that actual outcome is really the best measure to judge a risk probability decision.




The Henry review and response of eliminating the stupid KM travelled difference but reconfirming novated leases de-risked these guys a lot in my view.  Gov’t reducing FBT benefits for itself and tax exempt charities is low probability in my book because they would be creating themselves extra expense to offset the change.


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## Ves (16 July 2013)

The tail-risk that has plagued this stock for years looks like it is popping up again with Kevin Rudd's announcements this morning.

The company has also announced that this will have a material earnings impact. We will find out how much in due course.

Whilst the changes still pend an election result - is Abbott likely to look at the same areas to fill the gaps as well?  

I agree with skc and haven't been able to buy into this as while the company has a great business model, there is the dark side of government intervention looming over it and the price hasn't compensated for it since I have found the company  (I wasn't investing during the GFC or when it got slapped last time "FBT changes" were mentioned).  

Certainly a long-term wealth winner if you get it at the right price, however.


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## catfish (16 July 2013)

I have a company car and hold mms. Yay


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## Ves (17 July 2013)

Do you own research and take what analysts say with a grain of salt, but this might be interesting reading for those interested in the stock:

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=279CBEF9-AA85-EF4C-70CF0164A1A31186

This has a slight resemblance to Cabcharge's situation.  A highly profitable company, with entrenched market leadership is affected by regulatory change.


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## skc (17 July 2013)

Ves said:


> Do you own research and take what analysts say with a grain of salt, but this might be interesting reading for those interested in the stock:
> 
> http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=279CBEF9-AA85-EF4C-70CF0164A1A31186
> 
> This has a slight resemblance to Cabcharge's situation.  A highly profitable company, with entrenched market leadership is affected by regulatory change.




Very true. Although MMS is a company built on the regulation in the first place - so regulation change was always in the shadow. While companies like CAB and Cash Converters are operating in sensitive areas where regulations enter their domain for better or worse.

Would be interesting to see what happens on open. It's a stock priced for growth and definitely has a market darling status. My guess is that it will fall a fair bit (say 20%+, but really depends on the updated guidance by management) on re-open but that may be close to the low of the day... a bit like BRG and ORL when they lost a large chunk of their revenue.


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## FxTrader (18 July 2013)

skc said:


> VMy guess is that it will fall a fair bit (say 20%+, but really depends on the updated guidance by management) on re-open but that may be close to the low of the day... a bit like BRG and ORL when they lost a large chunk of their revenue.




MMS could be an interesting speculative play if it does tank at the open.  I suspect the government may give ground on this issue soon and MMS could rebound strongly as a result.


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## craft (18 July 2013)

The potential for regulation change has always been there and was almost certain to occur sometime in my holding time frame. It has now come to pass. What has surprised me is how poorly it has been done. Rudd 2.0 – MRT all over again.

Arguably good policy in removing subsidy for personal use vehicles but implementation is a balls up. MMS is best positioned in an industry that will be devastated more by the implementation then the actually policy change.  

MMS business is much more than just Novated Leases for personal only use.  Balance sheet is in shape to take the hit – The non-diversified competition is toast as of yesterday because of how this has been handled.  A lot of the jobs in the industry will be lost – probably even before the fate of the election outcome and whether these changes actually get implemented, is known. 

Looking forward to some volatility.  As I’ve seen so much misinformation and confusion over the last few days I’m not sure if the price will dictate I’m buying or selling.  The company guidance before trading may result in a more informed market in which case I might just be doing what I do best – Nothing.

The growth premium and market darling status should arguably have more impact on the price then the revenue stream hit. The business is mainly labour – once the uncertainty is clarified the business can resize(code for sack people – the real losers of the schizophrenic tax policy approach).




> Paul King, managing director of Selectus, says he will be forced to lay off 100 staff on Friday and predicts there will be 2000 redundancies across the salary packaging sector by the end of July






> *Business stopped immediately*
> 
> Peter Moore from Melbourne group Leasexpress, says that while the changes do not apply until April 2014, all contracts entered into from the day of the announcement and run into that period are covered by the changes.
> 
> ...






> ‘*No consultation whatsoever’*
> 
> 
> “I know Kevin Rudd said yesterday that there have been weeks of consultation. But that’s frankly contemptuous given he’s only been back as PM a few weeks. There was no consultation whatsoever.”
> ...




http://www.brw.com.au/p/business/mid-market/cause_salary_looking_packaging_redundancies_kYWCEYRtMCUHlijM3RLWuK


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## FxTrader (18 July 2013)

MMS has been granted a trading suspension until 25/7 so MMS shareholders will be holding their breath for another week.  The language of the release seems ominous in that they are indicating an inability to originate novated leases.


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## craft (18 July 2013)

FxTrader said:


> MMS has been granted a trading suspension until 25/7 so MMS shareholders will be holding their breath for another week.  The language of the release seems ominous in that they are indicating an inability to originate novated leases.




Management are spoil sports.

Was looking forward to playing in an uninformed market.

- - - Updated - - -



Ves said:


> http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=279CBEF9-AA85-EF4C-70CF0164A1A31186





The linked fnarena article is incorrect on the Novated Lease facts – seem to be making the same mistake that the pollies have also been sprouting in the media – I guess this is what happens when people don’t understand and don’t consult.



> And thus receive an assumed deduction of 80%




Firstly FBT is payable when a car is provided for personal use – there was no rorting by pretending business use when none existed the very reason FBT was levied is because the usage was private.

FBT liability is calculated at 20%* multiplied *by the car value. So if a 35K car is leased and provided as part of the salary package to an employee for personal use then the FBT liability is 35Kx20% = $7000.
The potential tax saving is the difference between actual cost – say 10K to run the car and the $7K calculated under the statutory method. FBT though is levied at the top marginal rate of 46.5%. 

The majority who take novated leases are actually on the 34% marginal tax rate so the PAYE saving is 10K x 34% = $3400. The FBT liability is 7K * 46.5% = $3255. Total tax saving in this example $145.

A lot of novated leases actually had to include employee contributions from after tax earnings to neutralise the fact that FBT liability would be greater than PAYE tax savings if all costs were paid pre tax.

What  Novated leases did do was give people access to their employers GST status  and get them access to fleet pricing and in many cases provided the financing that they would not otherwise necessarily get.

There will be ripples for the car manufacturing industry. Not to mention a tightening of the low km used car market. And probably even safety and environmental impacts from older cheaper cars on the road. None of the ripples considered and the 1.8bn savings are questionable at best.  – Possibly result in a cost to the economy. But who cares when making policy on the run – probably surprised them that what they thought was a funding arrangement for an election promise resulted in an immediate impact. It is this uncertainty that is the biggest killer – do you start to re-organise the business today or do you wait?

Muppets.


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## skc (18 July 2013)

There's a good novated lease calculator on Remserv's website that explains the benefits and how it all work.

https://www.remserv.com.au/salary-packaging/novated-leasing-calculator

It doesn't seem to mention FBT payable and it didn't ask whether the car is for private or business use.

I am guessing there's a disclaimer somewhere that says FBT depends on nature of the car use... 

And I think that's the problem with MMS's novated lease business. Many people are using novated lease and claiming business use (and hence little FBT) when they are indeed just private use. The inclusion of FBT will make these deals much less attractive.

MMS still has a large part of the business in salary packaging in general. I have a friend working in a NSW public hospital and the sort of things they can package is pretty wide ranging. While some will call that perks, the reality is that doctors are paid less in the public hospital system compared to them going private practice. So you'd have to pay them one way or another.


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## Julia (18 July 2013)

Isn't the fall in the SP, the talk about jobs lost, new car industry devastated etc a little premature?

The proposed FBT legislation is a corollary of the promise to move to an ETS a year earlier.

The government will not be recalling parliament before the election, therefore there's no chance of the legislation even being put up.

The Greens and the Coalition have both clearly asserted they will not support it, so it won't get through the Senate.

Labor have to win the election yet.   Then there would have to be a change in the make up of the Senate in July for there to be any chance of it getting through.

This ETS promise is a clever bit of politics by Rudd.  It blunts Mr Abbott's attack on a key policy area, and sounds good to voters who naively believe everything promised will come to pass.
For companies to be shedding jobs on the basis of a bit of campaigning by Mr Rudd, however, is imo quite unjustified.


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## craft (18 July 2013)

skc said:


> There's a good novated lease calculator on Remserv's website that explains the benefits and how it all work.
> 
> https://www.remserv.com.au/salary-packaging/novated-leasing-calculator
> 
> ...





SKC your understanding on novated leases seems to share the general population confusion. 

The statutory formula has inbuilt assumptions. The outcome of which varies depending on value of vehicle, tax scale etc.

*At the moment for the majority FBT liability roughly equals *or is massaged via employee contributions to equal *PAYE savings*.

Under the new rules *FBT liability for anybody on less then 180K is going to be way bigger than PAYE savings *because FBT is levied at 46.5%.  Executives  with BMW’s will still be O.K because their marginal rate = FBT rate. But for anybody on less than the top Marginal rate it will be too punitive.

At the moment because of the uncertainty NO novated leases are being written. When the dust settles it will still probably be viable for 100% private usage Novated leases if you are on the top tax bracket if not employers will simply switch back to providing fully maintained company cars to their execs.

Mum and Dad on average wages are screwed unless the likes of MMS can come up with another mechanism that gives them access to fleet buying power, employer backed financing and GST savings (arguably the real gov’t subsidy) 




skc said:


> MMS still has a large part of the business in salary packaging in general. I have a friend working in a NSW public hospital and the sort of things they can package is pretty wide ranging. While some will call that perks, the reality is that doctors are paid less in the public hospital system compared to them going private practice. So you'd have to pay them one way or another.




The Rebatable FBT, 17K Exempt  & 30K Exempt  business (mainly gov’t and charities) are MMS real bread and butter and this change is not significant to that business though the legislative risk here remains and will be heightened in the mind of the market. However if the Gov’t changes legislation in this area it will be cutting off its own nose so arguably less likely to occur then the Novated lease changes.


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## craft (18 July 2013)

Julia said:


> Isn't the fall in the SP, the talk about jobs lost, new car industry devastated etc a little premature?




No because the effective date was 16 July and the industry can't write new leases with the current uncertainty -  This is the worst policy implementation I have ever seen (at least that which I understand in detail).

The damage is being done yet it might not even happen.


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## FxTrader (18 July 2013)

Julia said:


> Isn't the fall in the SP, the talk about jobs lost, new car industry devastated etc a little premature?
> 
> The proposed FBT legislation is a corollary of the promise to move to an ETS a year earlier.
> 
> ...




The key issue for MMS shareholders is what the Coalition will do with this FBT issue post-election should they have an outright majority (still likely in my view in spite of the Rudd factor.)  So far they are not giving an indication whether or not they will roll back labor's changes.

The industry reaction was predicatable and almost certainly overestimates the real impacts.  Even if the move to bring forward an ETS does not succeed I doubt the FBT changes being rolled back by either party given the worsening budget postion.  This leaves MMS shareholders in the lurch and likely forced to realize a significant loss or hope for a policy change in the future.


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## Ves (18 July 2013)

skc said:


> It doesn't seem to mention FBT payable and it didn't ask whether the car is for private or business use.



That's because the employer pays the FBT if applicable (ie. they lodge an annual FBT return).

The novated lease agreement is between three parties - you, your employer and the leasing company.

My understanding,  as simply put as I can, is that the employer makes the lease payments on behalf of the employee,  makes any adjustments for FBT and then deducts, the adjusted repayments from the employee's cash salary. That's why they call it a salary package.

The individual doesn't claim any expenses in their tax return.


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## FxTrader (18 July 2013)

craft said:


> *At the moment for the majority FBT liability roughly equals *or is massaged via employee contributions to equal *PAYE savings*...
> 
> Mum and Dad on average wages are screwed unless the likes of MMS can come up with another mechanism that gives them access to fleet buying power, employer backed financing and GST savings (arguably the real gov’t subsidy).




The only way in which people are "screwed" is missing out on the "savings" achieved through packaging a lease vehicle (new cars primarily).  Mum and Dad are better off when they purchase such vehicles second hand.

By way of example, I leased a new car for 2 years and the person who bought it from me two years later got a car with 12 months warranty, perfectly maintained, spotless inside and out and paid $12,000 less than I did.  I pocketed about 2k at the end of the lease.  The only party that got screwed in this deal were the taxpayers of Australia who end up paying for this govt subsidy.


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## craft (18 July 2013)

FxTrader said:


> The only way in which people are "screwed" is missing out on the "savings" achieved through packaging a lease vehicle (new cars primarily).  Mum and Dad are better off when they purchase such vehicles second hand.
> 
> By way of example, I leased a new car for 2 years and the person who bought it from me two years later got a car with 12 months warranty, perfectly maintained, spotless inside and out and paid $12,000 less than I did.  I pocketed about 2k at the end of the lease.  The only party that got screwed in this deal were the taxpayers of Australia who end up paying for this govt subsidy.




Fleet discount would have been more than 2K. GST  saving would have been 10% of new car price.
Buying power on operating expenses would have had an impact. 
Probably very little saving attributable to the FBT statutory rate unless you were on 180K plus or were talking an expensive car or drove a crap load of kms. 

Good low km 2nd hand market will be impacted.  They will become scarcer hence more expensive as something like 300,000 currently participating average wage earners will be penalised out of participating in future fleet buying power on new cars and may face financing issues so will probably not update their cars.

Any rate not in my interest to keep up this debate. So I’m jumping on the Yay they shafted those dirty tax rorters theme and MMS is going to get creamed as they deserve because all they have ever done is fleece the government.


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## notting (18 July 2013)

NLC car leasing business loses 70% of business and is sacking 80 of 150 or so staff on the back of the idiot Rudd.  This guy is not the prime minister he is a joke.
Gonna be giving more hand outs to Ford and Holden and Toyota again soon I guess, I suppose we will be able to supply cheap cars to the world funded by tax payers.

On top of this how much work is this going to create for employers to re-negotiate salaries with employees with car leasing perks?


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## craft (18 July 2013)

Some examples so people can get their head around this – all based on 100% private usage. 

Assumption:  $35,000 vehicle, Actual costs incurred to finance the car through a novated lease $10,000pa

Expenses paid before tax so income is reduced by the $10,000. Saving  to the employee $10,000 times marginal tax rate

The now defunct statutory method:  $35,000 x 20%  = $7,000FBT liability multiplied by the FBT rate of 46.5%. Paid by the employer but passed onto the employee.

The operating  method – as all usage is private the full  $10,000 multiplied by the FBT rate.

So for a person on 34% marginal tax rate.

Old Statutory method = Income tax saving of $3,400 FBT liability of $3255.
Operating method = Income tax saving of $3,400 FBT liability of $4,650.

A person earning over $180,000 and on top income tax rate.

Statutory method = Income tax saving of $4,650 FBT liability of $3255.
Operating method = Income tax saving of $4,650 FBT liability of $4,650.

High income earners lose the tax break  but other benefits will still make packaging viable. Average wage earners are penalised out of obtaining other packaging benefits like fleet discount etc.

Now have a look at Industry body information as to who is actually leasing.



> The average price of a packaged car is just $34,500
> Just 5% of packaged cars are in the luxury category (BMW, Mercedes, Audi)
> 35% are made by local manufacturers Toyota, Ford and Holden
> Over 70% of drivers earn less than $100,000




http://www.aspia.com.au/downloads/ASPIA_Media_Release_18_July_2013.pdf

The Rudd/Bowan arguments and numbers just don't resemble reality. A lot of average wage earners are being penalised out of tax neutral packages to stop benefits (rorting?) only available to high wage earners.

Ruddy 2.0 should have just called an election before he did anything to remind us how shoot from the hip/non consultative he is.

Industry doesn’t look like it’s going to die quietly.



> ALL sections of the car industry - representatives from manufacturers, importers, leasing firms and dealerships - are due to hold a crisis meeting at Toyota Australia's head office in Melbourne this afternoon.





http://www.theaustralian.com.au/news/car-industry-to-hold-fringe-benefits-tax-crisis-meeting-this-afternoon/story-e6frg6n6-1226681232138


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## VSntchr (18 July 2013)

Thanks for those examples Craft, makes it very easy to understand the process.


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## notting (18 July 2013)

craft said:


> The Rudd/Bowan arguments and numbers just don't resemble reality. A lot of average wage earners are being penalised out of tax neutral packages to stop benefits (rorting?) only available to high wage earners.
> 
> Ruddy 2.0 should have just called an election before he did anything to remind us how shoot from the hip/non consultative he is.
> [/URL]




What kind of fricken BMW driver drives around all day on the job? How dumb are these guys?
What was scary was Abbot calling for an election straight up, which would not have allowed the milky bar kid to pull out his plastic pop gun and show us again what he's made of, unless the libs were smartly using reverse psychology encouraging him to dig in!  Let's hope so!


----------



## skc (18 July 2013)

craft said:


> Some examples so people can get their head around this – all based on 100% private usage.
> 
> Assumption:  $35,000 vehicle, Actual costs incurred to finance the car through a novated lease $10,000pa
> 
> ...




Thanks Craft for the example. Here's what I got from Remserv's calculator, assuming a $70k salary (34% marginal tax rate), $35k car (as per your example), 4 year term and 15000 km travelled per year.





The calculator is claiming potential saving of $1558 per year which is a lot more than what your example suggests. 

In the calculator, the car without novated leasing costs $12376 to own/run per year, which is the same as the number under novated leasing (first two blue items circled), so there doesn't seem to be any fleet discounts factored in.

In fact the calculator shows that the benefit comes from lower tax paid, and there is no mention of FBT payable by the employer passed onto the employee. 

What am I (or are they) missing?

P.S. Appreciate your time if you choose to respond but perfectly understand if you don't want to spend too much educating me about novated leases...


----------



## craft (19 July 2013)

skc said:


> Thanks Craft for the example. Here's what I got from Remserv's calculator, assuming a $70k salary (34% marginal tax rate), $35k car (as per your example), 4 year term and 15000 km travelled per year.
> 
> View attachment 53426
> 
> ...




12376 x 34% = 4207 PAYG saving – FBT liability would have been $3255 to get their potential saving they have utilised the Employer contribution Method (ECM) to the max $7000 after tax – which eliminates the FBT although it creates GST on the ECM.

This is about as optimistic as you could estimate the potential tax benefits - the 12376 for a 15K 4 year lease on a 35K seems steep – a figure I suspect maximised to flatter the potential tax break rather than accurately representing true final lease costs.

Not sure why they emphasise the tax savings as the initial drawcard rather than the cost saving that fleet discounts etc  can bring – probably because the tax savings is universal whereas the fleet discounts to an extent vary and are dependent on who you work for and the prior negotiations as part of engaging the packaging company.

I say good riddance to the tax rubbish but just wish it was done cleaner – the uncertainty re the election and whether it will or won’t happen is ridiculous given the magnitude of the changes to the sales model needed. As is the penalty nature of forcing 34% marginal tax earners to pay 46.5% FBT rates for any benefit that is negotiated and provided via the employer as part of a package.  If this stands then MMS ability to adapt would be severely hampered – their potential customers would be reduced to high wage earners and FBT rebated/exempt employers. My original thinking factored in removal of tax benefits but not the introduction of penalties – can’t believe it will stand but hey who knows with this crop of Muppets  [also can’t believe I’m watching them climbing Alp d’Huez twice tonight in the tour either – but they are – lesson anything is possible] 

 The real business is group buying/financing  and integration into automated payroll deductions. MMS now has the employer relationship base to implement that business model and all the small competition without scale are now dead without the tax cushion.

Don’t get me wrong – MMS will get whacked by this but so long as the 46.5% rate isn’t applied to everybody then they are well positioned to dominate a viable revised business model.


----------



## FxTrader (19 July 2013)

craft said:


> Don’t get me wrong – MMS will get whacked by this but so long as the 46.5% rate isn’t applied to everybody then they are well positioned to dominate a viable revised business model.




MMS is on my watchlist again (it was seriously overpriced on fundamentals previously.)  Given Joe Hockey's recent statements I expect the coalition to roll back this change so whatever the magnitude of the hit to MMS share price it may become an excellent speculative buy pre-election.  If the coalition wins (still very likely) it will be pay day.  If not, still the strongest player in its marget segment by a wide margin.


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## skc (19 July 2013)

craft said:


> Don’t get me wrong – MMS will get whacked by this but so long as the 46.5% rate isn’t applied to everybody then they are well positioned to dominate a viable revised business model.




Thanks Craft for your response.


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## DocK (19 July 2013)

Another incidental aspect to consider with the calculations is that family payments and other misc govt allowances are based on taxable income - if the vehicle costs come from pre-taxable income this sometimes allows for a higher family payment, as well as the lower medicare levy shown in the above example.


----------



## craft (20 July 2013)

DocK said:


> Another incidental aspect to consider with the calculations is that family payments and other misc govt allowances are based on taxable income - if the vehicle costs come from pre-taxable income this sometimes allows for a higher family payment, as well as the lower medicare levy shown in the above example.




I’ve seen the Family tax benefits issue being misused in the media. 

Currently. Family Tax Benefit is calculated using *Adjusted Taxable Income *which includes grossed up Fringe Benefits.  So receiving a Novated Lease Fringe Benefit from your employee instead of cash has minimal effect on Family Tax Benefit – best case scenario would be a few hundred $

Under the new rules there will be a penalty if you are on a salary level eligible for family tax benefits in receiving a non cash payment because fringe benefits tax would be levied in full and calculated at 46.5% instead of your marginal tax rate. Potentially $1000’s worse off in Family Tax Benefit if taking a vehicle over cash.

This issue is such a political football of misinformation that it’s a joke.  Understand the detail and the reality is that for anybody on over 180K it is now tax neutral as to whether your compensation for work is received as cash or some other fringe benefit.

For anybody on less then 180K anything but cash salary is now penalised. (therein lies my problem with this policy change.) 

When you consider the packaging concessions have been used as the basis to lower cash compensation in a lot of average workers wage deals – how fair is this change?

Also consider how FBT was introduced in 1986. Previously there was no tax on fringe benefits.  The cost of paying an employee is deductable to a business whether you pay it as cash or provide some other benefit for the employee’s *private* use. Problem was that PAYG revenues was being hit if employees weren’t paid in cash. So the FBT regime was introduced as a compensating revenue stream.  Right from the start the statutory method was available – effectively not applying the new tax to all private usage. (Sort of like not applying GST to fruit and vegs etc.)  Now if you had business use higher then what the statutory formula implied they made the operating method available to recognise that higher level of business usage.   FBT regime was not designed to tax 100% of private use especially as it was a flat 46.5% tax rate. It was the concession to get the tax in and make it fairer for lower tax brackets. 

Now the whole thing has been turned on it head and people are being led to believe the system has been rorted and it’s a matter of integrity that justifies the speed and mishandling that is causing havoc to some peoples livelihoods. When what they are really doing is *increasing the extent *of an existing tax (analogy would be repealing GST exemptions) and disadvantaging  average wage earners compared to high income earners in how they may be compensated for their work.  What amazes me, is those that just blindly accept the rort spin – talk about frogs in the pot .

Sorry – probably not a lot to do with MMS – just my rant.


----------



## DocK (20 July 2013)

craft said:


> Sorry – probably not a lot to do with MMS – just my rant.



But an interesting and informative rant  I stand corrected on the FTB issue - goes to show you need to really research the facts rather than believe a lot of the misinformation that's out there.  Thanks for clearing that up for me craft.


----------



## Julia (20 July 2013)

craft said:


> Sorry – probably not a lot to do with MMS – just my rant.



Your explanation is interesting and appreciated, craft.  You're immensely well informed about many topics, and your willingness to share with others is a considerable contribution to this forum imo.


----------



## GuruofGurus (21 July 2013)

I expect the stock to actually do well now on re-open.....on Wednesday of last week clearly this was not the case and I expected another fall but truly not much as it had already given up $2.64 or 15%......now I actually expect a rise....as here is some facts:

1. This FBT change needs to be Legislated. So it has not happened yet as company mentioned
2. The Coalition has said on Friday they will not support this FBT change, so legislation with this government is finished with this term of parliament given the hung parliament. Coalition support for FBT remaining unchanged was hugely important for MMS share price.
3. Despite Rudd getting press with some better polls, the Coalition is still way ahead at $1.36 and Labor is $3.00 to WIN the election with Sportsbet and other agencies right now...so the coalition is not supporting the FBT change is far more important and stops this FBT change in all probability from even occurring. It also stops the shorts from entering...they will look at $3.00 Labor to get this up and have to bet on that....no thanks. They might actually now go long bigtime. The math is better.
4. The government may yet exempt Australian Cars given the storm of Motor Industry Lobbying, Vic and SA premier lobbying and then Holden and Toyota lobbying as this affects their sales forecasts and hence investment which is being negotiated right now. The government surely wont want that. I think this is the compromise from Labor....this may come this week hopefully
5. The company is then likely to release record FY13 full year results in early August given previous outstanding results and rising 30%+ ROE, EPS rises and even a good Div Rise....if they get the whole of these valid 5 points up we could see $18+ on re-open as uncertainty in MMS would we eliminated, clear skies would lay ahead and strong earnings forecast once more.

Right now MMS I believe theoretical price would have fallen to $12.50-$13.00 by Thursday and rallied back to $16 on Friday after Abbotts support....next is $18 again with an Australian Car exemption to FBT changes from Rudd and with August earnings uplifts we may even see $20ps+ and a short rally from hell.

Just my read. Rudd has closed in some polls but until he and Labor is ahead in polls and the bookies by a large margin, and they havn't given an FBT Australian car exemption (worse case), MMS is actually in good shape for real rise on return to trading of $3-4 to near $20 and if it breaks that...we are away technically.

Cheers.


----------



## banco (21 July 2013)

GuruofGurus said:


> I expect the stock to actually do well now on re-open.....on Wednesday of last week clearly this was not the case and I expected another fall but truly not much as it had already given up $2.64 or 15%......now I actually expect a rise....as here is some facts:
> 
> 
> 4. The government may yet exempt Australian Cars given the storm of Motor Industry Lobbying, Vic and SA premier lobbying and then Holden and Toyota lobbying as this affects their sales forecasts and hence investment which is being negotiated right now. The government surely wont want that. I think this is the compromise from Labor....this may come this week hopefully
> .




I'm not sure they'd be able to do that under the various free trade agreements they've signed up for.


----------



## GuruofGurus (21 July 2013)

banco said:


> I'm not sure they'd be able to do that under the various free trade agreements they've signed up for.




No it can be done as it is not a legal tariff or legal subsidy or fits the pure definition. 
Its an FBT concession available to certain fleet and package buyers only of an Australian made product.

Meaning it is optional not complusory. It is not a broad base price advantage. It is also available to anyone that wants to manufacture here and not just Australian companies..eg. Toyota buyers would receive it.

The Legal Eagles could easily construct it so it conforms.


----------



## GuruofGurus (21 July 2013)

GuruofGurus said:


> No it can be done as it is not a legal tariff or legal subsidy or fits the pure definition.
> Its an FBT concession available to certain fleet and package buyers only of an Australian made product.
> 
> Meaning it is optional not complusory. It is not a broad base price advantage. It is also available to anyone that wants to manufacture here and not just Australian companies..eg. Toyota buyers would receive it.
> ...





The tide has turned in Mcmillan's favour once more. Heads they win tails they win... McMillan lost $2.56 too much last week. Why ?

Fact: 2 weeks ago we actually had more uncertainty for the MMS future because the Coalition had said nothing of potential changes to FBT and now they have committed to no changes and they are ahead in the polls/Betting markets. 

Sellers would be gifting their valuable shares . Labor is $3.00 to win the election and by a margin on 5 seats they would be $15.00 outsiders to the Coalition $1.36 outright favourite. 3 PMs, 5 immigration ministers, pink batts, faceless men, Carbon tax, NSW labour corruption, Health service corruption, mistake after mistake, Julia was a joke and we all know it.

Smart money will be the MMS buyers at those odds. Thank god they received coalition support. It was key to retaining and restoring MMS value.
Cheers.


----------



## GuruofGurus (21 July 2013)

GuruofGurus said:


> No it can be done as it is not a legal tariff or legal subsidy or fits the pure definition.
> Its an FBT concession available to certain fleet and package buyers only of an Australian made product.
> 
> Meaning it is optional not complusory. It is not a broad base price advantage. It is also available to anyone that wants to manufacture here and not just Australian companies..eg. Toyota buyers would receive it.
> ...





The tide has turned in Mcmillan's favour once more. Heads they win tails they win... McMillan lost $2.56 too much last week. Why ?

Fact: 2 weeks ago we actually had more uncertainty for the MMS future because the Coalition had said nothing of potential changes to FBT post election and now they have committed to no changes and they are ahead in the polls/Betting markets. 

Sellers would be gifting their valuable shares. Labor is still miles behind at $3.00 to win the election and by a margin on 5 seats they would be $15.00 outsiders to the Coalition $1.36 outright favourite. 3 PMs, 5 immigration ministers, pink batts, faceless men, Carbon tax, NSW labour corruption, Health service corruption, mistake after mistake, Julia was a joke and we all know it. Its not magically all solved by Ruddenomics.

Smart money and fund managers will be the MMS buyers at those odds. Thank god MMS received coalition support. It was key to retaining and restoring MMS value.

Did you like my 5 reasons it actually goes up on Thursday  ? The tide has turned from a markets perspective.....I mean why sell because a few orders have been cancelled well there is a sixth reason they just became a monopoly in their space as well.....right ? as the lesser competitors thrown in the towel. Those clients move to Mcmillan.

Cheers.


----------



## Country Lad (21 July 2013)

GuruofGurus said:


> ................. a few orders have been cancelled .................




Around 30% is a bit more than a "few".

Cheers
Country Lad


----------



## ROE (24 July 2013)

Doesnt matter what happen from here on mms is set for profit declines in future years as this is a generous tax concession Labor or Lib will eventually has to close it ...to stop the budget bleeding into the red....

In good time when revenue is strong thing like this get over look...when revenue slow all options are on the table
GST, Tax Bracket, Tax concession like FBT etc... I wouldnt rule out tinkering with -ve gear as well....

It going to be ugly tomorrow ...very ugly


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## skc (24 July 2013)

ROE said:


> It going to be ugly tomorrow ...very ugly




Yes... looks like $104m of revenue will be at risk which have 30%+ NPAT margin.

FY13 NPAT was $62m (83cps) so the current stock @ ~$15 is trading at PE 18x.

If the legislative changes do go through, NPAT could easily be halved. Then you are going to have PE premium taken right out of it given lower growth and the massive regulatory shock (at least in the short run). So say EPS falls to 45c @ PE 12x, this gives ~$5.5 

Now that's probably the absolute worst case scenario as Abbott has said he doesn't support the changes. Libs winning the federal elections is probably ~60/40 bet, but politians and their pre-election promises should probably be discounted somewhat.

So... anything below say $6 would give you a free bet on Abbott keeping his words. Anything above $12 then the market's probably being a bit too optimistic. My guess is a high single digit opening with big range each way.

May be the right way to do this is buy <$10 and hedge it with a bet of Labour winning the election at $3.75. In fact, I will run this theoretical position of 1000 shares of MMS on open (if <$10) and $1000 bet on Labour @ $3.75...

P.S. The NPAT won't all go in one hit as they'd still have existing leases in runoff mode (probably 2-3 years by my guess).
P.P.S. They are keeping all permanent staff until after the election, and they are probably doing that at the expense of shareholder's FY13 final dividend. It seems to be a noble, strategic and expensive thing to do. Personally I'd reduce headcount by 10-15% (there's always some slack in the system).


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## GuruofGurus (25 July 2013)

All we have a short term disruption in demand, and even a rise in earnings and 15% dividend rise which is likely if the coalition win......

Coalition are $1.20 to Labor $4.40 on Betfair. Right now.

So shorts that enter foolishly today will have to short into that and an illiquid stock....not very smart.

As it has fallen $2.64 dont be suprised if it rallies back to $16+ ....by midday

AHE has returned to its high.......so the market is saying the FBT change wont happen....for now.

This would be a short if labor were way ahead in the polls/betting markets but they are actually miles behind with limited chance of being elected, then elected with a big majority required to pass legislation.


Smart money will be buying at any open dip.....it may open higher......watch.


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## ROE (25 July 2013)

GuruofGurus said:


> Smart money will be buying at any open dip.....it may open higher......watch.




I hope you got money ready to buy i reckon 20% drop minimum on opening, follow by a pro long down trend until the market can work out what exactly is its stable earning going forward....

If you want to buy I can short sell you now $14 - before the market open its trading at $15ish


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## FxTrader (25 July 2013)

ROE said:


> I hope you got money ready to buy i reckon 20% drop minimum on opening, follow by a pro long down trend until the market can work out what exactly is its stable earning going forward....
> 
> If you want to buy I can short sell you now $14 - before the market open its trading at $15ish




Try down 55% at the open, a bloodbath to start.  Guru's prediction was always ridiculous.


----------



## ROE (25 July 2013)

FxTrader said:


> Try down 55% at the open, a bloodbath to start.  Guru's prediction was always ridiculous.




Current price look about right maybe up to 8.50 ....

I expect there is going to be a water down version like CCV and various reform that has a devastating effect on some business....

Skc figure around 5-6 bucks factoring for the worse so if you can get them at those price bargain -


----------



## FxTrader (25 July 2013)

ROE said:


> Current price look about right maybe up to 8.50 ....
> 
> Skc figure around 5-6 bucks factoring for the worse so if you can get them at those price bargain -




Price will bounce around a bit today as the day traders play with MMS and exit.  EOD price will be interesting.  Without guidance from MMS price prediction and valuation at this stage is speculation.  

What will be more interesting is what happens come election time.  A coalition win will see MMS soar.


----------



## skc (25 July 2013)

FxTrader said:


> Price will bounce around a bit today as the day traders play with MMS and exit.  EOD price will be interesting.  Without guidance from MMS price prediction and valuation at this stage is speculation.
> 
> What will be more interesting is what happens come election time.  A coalition win will see MMS soar.




We'd see double digit share price at some stage before the election imo.



skc said:


> May be the right way to do this is buy <$10 and hedge it with a bet of Labour winning the election at $3.75. In fact, I will run this theoretical position of 1000 shares of MMS on open (if <$10) and $1000 bet on Labour @ $3.75...




OK so the theoretical position opened 1000 shares @ $7. The hedge is reduced to just $300 as I only needed to cover a fall-back position to $6 a share.

So total outlay ~$7300.


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## ROE (25 July 2013)

I made a quick trake pocket 2k profit so far
Bought at 7$ sold at $8

Only buy again closer to $7 because it too close to fair value with uncertainty....


----------



## Ves (25 July 2013)

I had a mental blank and let the market movements get to me and "forgot" my plan this morning and couldn't pull the trigger under $7.

I had to walk away for a bit and then return and go over my analysis again. I made the decision that my analysis still tells me that under $8 is good buying on valuation grounds.  I made an initial entry in the $7.90 range.   

I am happy to admit that I still have lots to work on in terms of approaching events like this on a psychological level.

Will be looking to add to my position slowly in the next few months if possible.


----------



## ROE (25 July 2013)

FxTrader said:


> Price will bounce around a bit today as the day traders play with MMS and exit.  EOD price will be interesting.  Without guidance from MMS price prediction and valuation at this stage is speculation.
> 
> What will be more interesting is what happens come election time.  A coalition win will see MMS soar.




Agree at this stage mostly guess work and go in if you can handle the risk ....
Long run if this comes into affect the business margin will  be compressed and they dont have the scale they used to have so lower profit amd margin all around.

Notice lot of cheap car loan advertise on TV lately since the annoucement -

Business that can profit from this should this legislation take effect will be personal loan lenders could have flow on effect to TGA, CCP etc...


----------



## craft (25 July 2013)

10% of company turned over so far.

Probably bad idea to be trading this (could be a ‘digging out of the hole’ reaction that will stuff me up)  but the volumes there and I‘m familiar with it so time to dust of some short term channels.... my bias is up, but I’m following the price, got to be more system driven selling  (margin calls etc) coming yet I would suspect. 

Investing – I’m sitting tight but believe that I may have set myself a new record for biggest one day decline in market value today. 

Those putting anything like a firm valuation on this at the moment must be bloody good analysts – cause I for the life of me can’t pin down a fair value when politicians act irrationally in the throes of a dying government.

Expect big swings as the market provides price discovery.

When the dust settles should be lots for me to reflect on.


----------



## FxTrader (25 July 2013)

Ves said:


> I had a mental blank and let the market movements get to me and "forgot" my plan this morning and couldn't pull the trigger under $7.
> 
> I had to walk away for a bit and then return and go over my analysis again. I made the decision that my analysis still tells me that under $8 is good buying on valuation grounds.  I made an initial entry in the $7.90 range.
> 
> ...




You're not alone there, I hesitated as well but MMS was not a day trade for me so getting in at $7 to sell at $8 was not my plan anyway.   MMS could just as easily have gone from $7 to $6 after the open.  The panic selling today should pay off nicely for those willing to take the risk, it's just a question of magnitude.


----------



## skc (25 July 2013)

craft said:


> Investing – I’m sitting tight but believe that I may have set myself a new record for biggest one day decline in market value today.




Invest long enough and you will run into something like this eventually, no matter how diligent you are.



craft said:


> Those putting anything like a firm valuation on this at the moment must be bloody good analysts – cause I for the life of me can’t pin down a fair value when politicians act irrationally in the throes of a dying government.




No firm valuation can be done, but I think a strip-everything-to-zero worst case scenario can be established. Then it becomes a game of probability and reading market sentiment.


----------



## FxTrader (25 July 2013)

craft said:


> ... got to be more system driven selling  (margin calls etc) coming yet I would suspect.
> 
> Expect big swings as the market provides price discovery.




I'd say the volitility spike from algorithmic trading and forced sell down on margin has settled down now with the price hovering around $8.  Whatever the intrinsic value may be, a 50% sell down is pure panic given the FBT change is hardly set in legislative stone.


----------



## Ves (25 July 2013)

craft said:


> Investing – *I’m sitting tight* but believe that I may have set myself a new record for biggest one day decline in market value today.
> 
> Those putting anything like a firm valuation on this at the moment must be bloody good analysts – cause I for the life of me can’t pin down a fair value when politicians act irrationally in the throes of a dying government.




If I am being intrusive or rude  (not my intention) I apologise - but since you cannot arrive at a valuation, does your reason for holding have to do with your assessment of MMS' competitive position vs weakened competitors and the ability of the balance sheet to take a hit to earnings / revenue?

Would it be fair to say that those still holding may agree with those who are buying (excluding the traders)?


----------



## craft (25 July 2013)

Ves said:


> If I am being intrusive or rude  (not my intention) I apologise - but since you cannot arrive at a valuation, does your reason for holding have to do with your assessment of MMS' competitive position vs weakened competitors and the ability of the balance sheet to take a hit to earnings / revenue?
> 
> Would it be fair to say that those still holding may agree with those who are buying (excluding the traders)?




V

I’ll get back to you on investment rational a little latter. 

Bit pre-occupied now.


----------



## GuruofGurus (25 July 2013)

craft said:


> V
> 
> I’ll get back to you on investment rational a little latter.
> 
> Bit pre-occupied now.




Look a big short too a big punt at the open and every seller today has lost today...as there is no shares to buy back. I estimate the shorts are now caught short by 5m-7m shares and many to buy those back today and over the next few days....plus with other shareholders averaging down some and plus new entrants taking a punt on the election and a Liberal victory will push it back to $12 pretty easily.....especially if others buy in knowing that Rudd is unlikely to be elected. Right now the price is saying Rudd is elected and he will legislate...that is wrong.

Liberals are $1.20 v Labor $4.40....this has massive short covering bounce written all over it...

Approaching highs of the day...I think A $1-1.50 per day will come back into for it the next few days.

This is a buying opportunity


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## skc (25 July 2013)

GuruofGurus said:


> I estimate the shorts are now caught short by* 5m-7m shares* and many to buy those back today and over the next few days....




How did you estimate that?


----------



## Trembling Hand (25 July 2013)

skc said:


> How did you estimate that?




Oh you know. complete lack of understanding. There was 1.2 mill short as of yesterday. So that would make all of todays trades short sells.......


----------



## skc (25 July 2013)

Trembling Hand said:


> Oh you know. complete lack of understanding. There was 1.2 mill short as of yesterday. So that would make all of todays trades short sells.......




Shorts were not easy to come by this morning... I don't think too many people would have shorted this on open given the $7 open price and the balance of probability.

Made decent money on a trade but still left quite a few $k on the table. Oh well...


----------



## skyQuake (25 July 2013)

skc said:


> Shorts were not easy to come by this morning... I don't think too many people would have shorted this on open given the $7 open price and the balance of probability.
> 
> Made decent money on a trade but still left quite a few $k on the table. Oh well...




Bought the low and sold the high.

(but missed about $1.50 in between :bad

At least its better than holders that left money and then some on the table

FYI IG had borrows lol


----------



## skc (25 July 2013)

skyQuake said:


> Bought the low and sold the high.
> 
> (but missed about $1.50 in between :bad
> 
> At least its better than holders that left money and then some on the table




Sort of similar here. My lowest parcel buy was $6.95. My highest sell was $8.95. So that's pretty good... But over the full size I only averaged ~80c, against the day's range of $2.25.


----------



## FxTrader (25 July 2013)

skyQuake said:


> Bought the low and sold the high.
> 
> (but missed about $1.50 in between :bad
> 
> At least its better than holders that left money and then some on the table




Ok, well for the rest of us fools who decided to buy and hold instead of flipping on the day for a quick but small profit I provide the following commentary from RM at http://rogermontgomery.com/fbt-fairly-badly-trampled/...

"_Prior to the market opening, and based on the information contained in the MMS announcement, we had calculated a revised estimate of MMS’s intrinsic value in the event that the proposed changes are implemented. Our assessment was that the likely impact would be devastating to MMS’s business, with most of its after tax profits destroyed.

Note, however, that this calculation assumed the changes were implemented. We separately estimated the probability that the changes would not be implemented, noting that the Coalition has said it does not support them, and that Labor may not have the numbers to implement the changes even if it did gain power. *Our best guess at the probability of the changes being implemented was somewhere below 20 per cent.* The framework we used for this is shown in the attached diagram. Using a <20 per cent probability of devastation and a >80 per cent probability that the business would suffer only relatively minor damage, we estimated a probability-weighted fair value for MMS shares.

*Based on that estimate, we were at the head of the queue this morning to buy additional MMS shares at $7.00 and grateful for the ‘McMillan get smashed’ sentiment.* Clearly there is some risk in doing this, and the fact that we are underwater on the initial investment makes us acutely aware of this risk. However, a critical part of our job is being able to put emotion to one side and take decisions based on a considered assessment of the facts, keeping in mind one does not pick up bargains when there is a cheery consensus.

*In this case the assessment was clear. At $7.00 per share, the upside considerably outweighs the downside, and our investment team was unanimous in its recommendation: a meaningful increase in our holdings in MMS*._"

Time will tell who made the best decision on the day, the day traders or B&H investors.  My goal is to make $8 a share instead of 80 cents and I think probabilities may be on my side.


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## ROE (25 July 2013)

Going to be a volatile stock for a while ...great trading stock


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## banco (25 July 2013)

GuruofGurus said:


> Look a big short too a big punt at the open and every seller today has lost today...as there is no shares to buy back. I estimate the shorts are now caught short by 5m-7m shares and many to buy those back today and over the next few days....plus with other shareholders averaging down some and plus new entrants taking a punt on the election and a Liberal victory will push it back to $12 pretty easily.....especially if others buy in knowing that Rudd is unlikely to be elected. Right now the price is saying Rudd is elected and he will legislate...that is wrong.
> 
> Liberals are $1.20 v Labor $4.40....this has massive short covering bounce written all over it...
> 
> ...




Liberals might only be in for 3 years.  There will be a lot of people that don't want to risk signing up to a multi-year lease only to have the rules changed.


----------



## GuruofGurus (25 July 2013)

banco said:


> Liberals might only be in for 3 years.  There will be a lot of people that don't want to risk signing up to a multi-year lease only to have the rules changed.




There is a short 1-2 month disruption of lease orders. That is it. NPAT is affected for 1-2 months.,,not permanently unless there is legislation. There is not. Actually there is 

No Govt Policy
No Legislation
Off the Rudd/Bowen cuff comments only.
Full coalition support given in full.
Coalition miles ahead in polls and betting
No likely majority for Rudd
NO chance of legislation being enacted this term and tiny chance next term and no chance with Coalition. 
Rudd would need 5+ seat majority....no chance of that at next election

This is actually a screaming buy. Stock is down $10 from $18 since last Tuesday for an "off the cuff Rudd/Bowen comment"  only no legal reason for MMS to change anything actually.

Market has jumped at a shadow....that doesnt even exist !!  I expect a $4-7 buying and short covering retracement within days. It was strong buying all day if anyone noticed.

Shorts that entered today simply do not understand this stock. It fell $7 in mins it can rise $7 in a couple of days easily.

There is 4-6m shares short after today. If the company announces the dividend will just be delayed if coalition wins this gaps up $3-4 easily. and then shorts have to cover...

This was near $20 before the Bowen comment last week. Ironically the business actually has more certainty now than ever given the coalition unequivocal full support. This was key.

The Market has got this wrong today and the shorts will pay a severe penalty IMHO, the shares to buy were evaporating all afternoon and will evaporate tomorrow as there was a lot of shorts trying to short more (were on both sides)...and now have to cover the margin call dump of shares after a week in trading halt was at the open  leaving only blue sky ahead for the stock. 

Dont be suprised to see this at $11-12 tomorrow. If it gaps up a > $1.50 watch out.

Its safer being on the long side.


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## banco (25 July 2013)

GuruofGurus said:


> There is a short 1-2 month disruption of lease orders. That is it. NPAT is affected for 1-2 months.,,not permanently unless there is legislation. There is not. Actually there is
> 
> No Govt Policy
> No Legislation
> ...




You sound like one of the goldbugs talking up gold as it falls like a knife.


----------



## ROE (25 July 2013)

GuruofGurus good business up until now but the game has changed, it may still be a good 
business going forward but this is a question that will takes a while to answer because no one 
know exactly what will happen in the next couple of years.

Labor fire the first shot that tax concession like these cant be sustained, doesn't matter if Lib or some other government come into power, they have to balance the budget at some stage ....Now the Lib if come to power

they may stop it for a while but at some stage if they are short of revenue, this will be in the spot light along with all other tax concessions and GST rate etc.

when you in opposition you can promise a lot of things that as a government you cant delivered, because Opposition don't run the country and don't balance the book...

Lib cant promise ripped out carbon tax, ripped out mining tax, paid maternity leave and then don't look at other saving measures...where the hell do they get the money from? tree?

so going forward this business will be impacted by whoever in power because of its uncertain future..and market don't price well
for business that has uncertain future

"When the facts change, I change my mind. What do you do, sir?"
-- John Maynard Keynes


----------



## GuruofGurus (25 July 2013)

Buying Volume was 2 times the selling volume on depth most of the day...indicating pent up buying

and Highlighting the lack of available stock to short cover with. This is usually an illiquid stock. Shorts are actually in a real bind tonight, betting against Coalition at $1.20...dumb dumb dumb. and aggressively shorting the open....dumb dumb dumb.

MMS could feasibly do the opposite tomorrow and i expect less shares around to buy and no selling as its done. MMS will fight back. They have a great balance sheet, plenty of debt headroom, 15 % earnings lift for FY13, Dividend will be ok and will be an increase is my feel in line with earnings +15%, competition is  also falling away giving them near monopoly status. Smaller competitors panicked but MMS did not.

The market just overreacted to some media stories of the week not based on fact and forced the open down now all the bad news is out there but the sky is not falling its actually pretty blue. The stock rose nearly every minute of the day from 10.10am onwards. Look at the chart.

The aggressive short seller at $7 open and $8 (resistance) is now in very big trouble IMHO whoever you are. Good luck getting those few million shares back, The fundies were clearly buying today. Shorts dont want fundies buying and there were big buy orders after $7.50 especially

Smart money bought today.

- - - Updated - - -



GuruofGurus said:


> Buying Volume was 2 times the selling volume on depth most of the day...indicating pent up buying
> 
> and Highlighting the lack of available stock to short cover with. This is usually an illiquid stock. Shorts are actually in a real bind tonight, betting against Coalition at $1.20...dumb dumb dumb. and aggressively shorting the open....dumb dumb dumb.
> 
> ...




Gap up tomorrow is a much higher probability. Massively oversold and snap back covering is already underway. Screaming buy under $12.....and if shares evaporate like I expect big volume buying could make this rise very fast.


----------



## skyQuake (25 July 2013)

I kind of agree on where you're coming from, except the short sell at open bit. 

Apart from the directors/founders, NAB aggregate holds 7.4m, Asia Pac technology holds 4m, Fidelty holds 2.3m

The shares under fidelty are under many different funds so lending would be difficult. Asia pac have been selling down from 4.6m, so I doubt they'll lend out much to sell. 

NAB is the only real lender here. Assuming they are allowed to lend out 1/2 by clients, thats 3.7m. 1.3m is currently shorted.

Leaving a total of 2.4m available for shorting, assuming 1 entity gets all of it.
Yes a whole heap got done in the morning today, and I could just as easily say most of the volume is long selling by holders who got scared.

Also, both parties atm are pretty focused on returning to surplus. Therefore it isnt a given that a Coalition victory will restore everything (which is being priced in I believe)


----------



## GuruofGurus (25 July 2013)

skyQuake said:


> I kind of agree on where you're coming from, except the short sell at open bit.
> 
> Apart from the directors/founders, NAB aggregate holds 7.4m, Asia Pac technology holds 4m, Fidelty holds 2.3m
> 
> ...




Sorry man You underestimated. Many brokers "naked" short sell  and there was tons of naked short selling at the open. Naked Short selling is when the shares were not owned or borrowed they were basically flash orders on screen, (daytrades and t+3  sell orders) (essentially no stock owned and no stock borrowed)...my estimate was 1-2 m real shorts plus 1-2m naked. Either way I am right...they forgot to look at the betting markets nor read the bit about MMS having full coalition support. Now they are on the wrong side.

The company also has ASIC compliance restriction (ie Newcrest) as the reason for not briefing analysts. Not because it doesnt want to. It will be speak to the market analysts and journos etc when legally cleared to do so.

I expect more Fundie buying + Shortcovering + Naked Short covering+ existing shareholders picking up a few + arbitrage traders going long the Coalition @ $1.20 in MMS +  illiquid stock = Big movement/Retracement to $12-14 by Monday....who knows maybe even tomorrow.


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## craft (25 July 2013)

FxTrader said:


> Ok, well for the rest of us fools who decided to buy and hold instead of flipping on the day for a quick but small profit I provide the following commentary from RM at http://rogermontgomery.com/fbt-fairly-badly-trampled/...
> 
> "_Prior to the market opening, and based on the information contained in the MMS announcement, we had calculated a revised estimate of MMS’s intrinsic value in the event that the proposed changes are implemented. Our assessment was that the likely impact would be devastating to MMS’s business, with most of its after tax profits destroyed.
> 
> ...




Be careful relying on RM marketing propaganda - It’s always hindsight and he's always infallible.  If you had the debate I had with him a few years ago on his blog about MMS this article would  have you laughing your **** off.


----------



## skyQuake (25 July 2013)

GuruofGurus said:


> Sorry man You underestimated. Many brokers "naked" short sell  and there was tons of naked short selling at the open. Naked Short selling is when the shares were not owned or borrowed they were basically flash orders on screen, (daytrades and t+3  sell orders) (essentially no stock owned and no stock borrowed)...my estimate was 1-2 m real shorts plus 1-2m naked. Either way I am right...they forgot to look at the betting markets nor read the bit about MMS having full coalition support. Now they are on the wrong side.




Err, naked shorting is illegal. Nobody is gonna risk jail time for that sort of thing. 

Oh and selling 50x avg daily vol? Who in their right minds would do that? Esp as 3 days later the world would know.


----------



## Country Lad (25 July 2013)

GuruofGurus said:


> Buying Volume was 2 times the selling volume on depth most of the day...indicating pent up buying




Not quite, the price weighted volume buying was 1.49 times the sell.  Not that much different to BXB which had about the same $ turnover.

Cheers
Country Lad


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## craft (25 July 2013)

> Bet on the election




Robert Gottliebsen didn’t think we should have this fun today. 
http://www.businessspectator.com.au/article/2013/7/25/automotive/bet-election-trade-mcmillan

I’m happy for it to trade – opens up more options.

Until I get more clarity I’m trading my new found election bet. [twice my investment exposure when the price action is up and the price is below my best guess probabilities too potentially fully hedged]

How come shorting is so easy for everybody else?  I had to spend ages on the phone earlier this week setting up the potential ability to just hedge this out for a while. 

A really good day today lets see what tomorrow brings.

Nearly 20% of the company turned over today


----------



## GuruofGurus (25 July 2013)

skyQuake said:


> Err, naked shorting is illegal. Nobody is gonna risk jail time for that sort of thing.
> 
> Oh and selling 50x avg daily vol? Who in their right minds would do that? Esp as 3 days later the world would know.




Naked short selling is sadly everywhere  on big news day or what appeared a short (prima facie). ASIC simply does not police it properly. 

Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs 

Recall Volumes dry up on day 2 and in an illiquid the big stock covering had to be done today and I reckon 3-4m shares were not.... leaving a massive gap (4m is about 4 days full regular trading and to cover would that would take about 8-12 days of regular buying) and your right NAB wont lend all theirs. No shareholder will lend.

This therefore could bounce very hard. Stocks that halve in a day can double in day. Especially when the market got this plain wrong as they refused to read the important bits i,e...Coalition support and Coalition miles ahead in betting/polls and bookies have got every election correct for near 20 years. The earnings were excellent and the dividend was not cancelled and that is a falsehood. If anything it is only delayed.

and MMS is illiquid in both directions .....not just one. Being caught short in this earnings machine with coalition supporting it fully is very dangerous. Alot of people now on the wrong side of this. Recall It had already fallen from $18.64 to $15.36 so a lot was already factored in last Tuesday fall. It is way overdone now.

if it had opened at 12 and steadily sold all day different story. But it gapped down hard in secoonds and with only 0.5m shares and now MMS can gap up just as hard. 

The formula for a massive pop is now in play. We shall see If I am right....did you see the very strong buying all day anyone right up to the close....look at the chart.

I think it will settle in the $12-15 range and creep up to $20 as the election result solidifies and rudd goes back to the hole in which he came out of.

Just my read based on facts. DYOR


----------



## skc (25 July 2013)

craft said:


> Robert Gottliebsen didn’t think we should have this fun today.
> I’m happy for it to trade – opens up more options.




Stephen Bartomoleum has a more sensible opinion.



> The market is as informed as it could be in the circumstances. It knows how material the group remuneration services revenue derived from salary-packaged novated leases is and it knows that if Labor wins the election and enacts its changes to the law McMillan Shakespeare will be materially and adversely affected. Today’s share price plunge provides an indication of the extent of the anticipated impact.
> 
> It is true that the market won’t know until after the election whether Labor will be in government and in a position to get the legislation passed in both houses. It does know that if the Coalition wins it has promised not to proceed with the changes so there is effectively a binary outcome for McMillan Shakespeare shareholders.
> 
> ...






GuruofGurus said:


> Naked short selling is sadly everywhere on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.
> 
> Just my read based on *facts*. DYOR




How do you know there's naked short selling? If you are just assuming then you should perhaps not call such guesses as facts.


----------



## craft (25 July 2013)

Ves said:


> If I am being intrusive or rude  (not my intention) I apologise - but since you cannot arrive at a valuation, does your reason for holding have to do with your assessment of MMS' competitive position vs weakened competitors and the ability of the balance sheet to take a hit to earnings / revenue?
> 
> Would it be fair to say that those still holding may agree with those who are buying (excluding the traders)?




As background - my last purchase was 1/10/08 average holding cost is low $2. It has repaid itself and more in dividends and I have sold some down at higher prices because of portfolio diversity rules. 

Removal of FBT concessions was always envisioned but not so much the farcical way that it has occurred.

At the moment, given the uncertainty I’m not looking to add beyond short term trades. Not adding on an investment basis and may hedge at any second but don’t want to realise the investment here either as there are as many upside risks as down at the moment.

Nothing like a botched concession withdrawal to embed it for a while longer – Just look at negative gearing.  Under a no change regime MMS competitive advantages would be meaningfully strengthened due to the demise of competition.  Its earnings multiple may take longer to recover.

I fully support the retaining of staff until more certainty prevails. It may not work out but I think it’s a justifiable business risk.  Cash position is certainly strong enough. Debt properly understood is well under control with possible upside risks to the used vehicle market.

The company update was vague and I thought a lot less informative then it could have been (political?) They split out the whole novated lease streams and indicated they are all at risk – I don’t think it’s that bad, the FBT capped enterprises can put the cars under those caps if they are not already fully utilised.  Even with no income tax advantage the ease, finance, fleet buying and GST savings will still see some novated leases written. Some vehicles may even have legit business use and others will simply transfer to fully maintained company vehicles still managed by MMS. The Assets management business is largely not affected. Then there is still the non vehicle lease side of the business. The hit to revenue and margin longer term may not be as bad as the picture painted.

The numeration services business should have always been transitioning towards something like Paychex in USA. Nothing on that front changes.

Ps don’t listen to me I’m the idiot that didn’t sell everything at $18.00


----------



## skyQuake (25 July 2013)

GuruofGurus said:


> Naked short selling is sadly everywhere  on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.




I suppose you have a detailed knowledge of ASIC workings. And big guys don't really care about things such as enforcable undertakings and potential jail time. 
Naked shorting isnt just banned sake of it. Do you know what happens T+3? Settlement fails, broker's backoffice panics and a forced buy-in probably occurs.
Then the SMH publishes an article and the pollies hop onto the bandwagon and someone goes to jail.



> Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs



It was 1.2m shares on the open. Not a few hundred k.

Plus, if I was a cunning short seller I would want good prices. So instead of dumping at the open, I would wait till after the open before selling bits and pieces with care not to smash prices. 

This is exactly what happened on the 16th. Though it was mostly long selling (a paltry 45k got short sold)



> Recall Volumes dry up on day 2 and in an illiquid the big stock covering had to be done today and I reckon 3-4m shares were not.... leaving a massive gap (4m is about 4 days full regular trading and to cover would that would take about 8-12 days of regular buying) and your right NAB wont lend all theirs. No shareholder will lend.



Less reason to short sell then if they can't bank their potential paper profits. Why get into a trade they can't get out of?



> This therefore could bounce very hard. Stocks that halve in a day can double in day. Especially when the market got this plain wrong as they refused to read the important bits i,e...Coalition support and Coalition miles ahead in betting/polls and bookies have got every election correct for near 20 years. The earnings were excellent and the dividend was not cancelled and that is a falsehood. If anything it is only delayed.



Find me a stock that halved, then doubled, the nxt day. Or even the next week. Shares trading at 0.1c min tick don't count.

Again, theres been a lot of opinion and no facts.

My take on this is that today's selloff was fear + *uncertainity*. Market hates nothing more than that! Management explicitly saying they're keeping their mouth shut doesnt look good. Makes it look like they have something to hide, even if they dont. 
No-one wants a stock swimming in such muddy waters, so the exaggerated gap down at open.


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## FxTrader (25 July 2013)

craft said:


> Be careful relying on RM marketing propaganda - It’s always hindsight and he's always infallible.  If you had the debate I had with him a few years ago on his blog about MMS this article would  have you laughing your **** off.



RM came out with his commentary after the market closed.  I agree with his analysis on this since it aligns with my own, that is quite different from relying on it.  I still think think it's a bit rich for a smug day trader who banks a quick profit to pass off buy and holders as mugs.  I could have banked a quick profit as well but judged this to be the wrong strategy.  Time will tell who made the better decision on the day.

Montgomery has been wrong about MMS, CCP and a few others in the past.  On balance though I tend to agree with his focus on value investing but he is definitely fallible.


----------



## ROE (25 July 2013)

Craft decent logical investor mind  but I think we may have import some hotcopper poster in here where nothing but blue sky when the facts changed 

- - - Updated - - -



FxTrader said:


> RM came out with his commentary after the market closed.  I agree with his analysis on this since it aligns with my own, that is quite different from relying on it.  I still think think it's a bit rich for a smug day trader who banks a quick profit to pass off buy and holders as mugs.  I could have banked a quick profit as well but judged this to be the wrong strategy.  Time will tell who made the better decision on the day.
> 
> Montgomery has been wrong about MMS, CCP and a few others in the past.  On balance though I tend to agree with his focus on value investing but he is definitely fallible.




I don't trust a guy that has something to sell and promote  conflict of interest...

Rudi from FNarena I found over the years is very very good, very frank not much hidden agenda.


----------



## skyQuake (25 July 2013)

Craft, 2 providers I know of have 'pre-borrow' in place to facilitate easier trading.

Eg. Interactive Brokers and IG markets had borrow today:

http://www.igmarkets.com.au/cfd/cd-shares.html
https://www.interactivebrokers.com/...a&amp;tag=Australia&amp;ib_entity=llc&amp;ln=


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## skc (25 July 2013)

FxTrader said:


> I still think think it's a bit rich for a smug day trader who banks a quick profit to *pass off buy and holders as mugs*.




Who's done that?


----------



## FxTrader (25 July 2013)

ROE said:


> I don't trust a guy that has something to sell and promote  conflict of interest....




Well that means you don't trust about 99.99% of the advisors and commentators in the market who are all selling or promoting something.  I prefer to make my own judgements, RM's commentary is interesting but track record is everything.  There is no altruism in the finance and investment world, everyone is in the game to make money using some angle.  Bias is everywhere, you just need to identify and filter it.


----------



## ROE (25 July 2013)

FxTrader said:


> Well that means you don't trust about 99.99% of the advisors and commentators in the market who are all selling or promoting something.  I prefer to make my own judgements, RM's commentary is interesting but track record is everything.  There is no altruism in the finance and investment world, everyone is in the game to make money using some angle.  Bias is everywhere, you just need to identify and filter it.




Commentators and newspaper are fine... I don't trust people in fund management who trades stock at the same time as telling the public this is what I did in hind insight and this stock worth this much...

You can buy at X pump said this stock worth Y and offload, then **** happen ooops we sold at Y sometimes ago -

And yes I don't trust most people in finance where I identified there is a conflict of interest....


----------



## GuruofGurus (26 July 2013)

GuruofGurus said:


> Naked short selling is sadly everywhere  on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.
> 
> Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs
> 
> ...





Skyquake...like your work....I expect a gap up and the naked shorts and shorts that cant find sufficient  stock in an illiquid stock without the ability to borrow them to be in a world of pain. By my reckoning, the lion share of the 4m shares short (naked or other wise) were shorted at the open, $7.50 and $8.00 so with the stock going over $9 and perhaps even well over $10 again the short covering will begin in earnest. Yesterday the volume was there but today it will be less and only the first hour on a friday and therein lies the danger if you need to buy it back. This stock can also form big spread gaps (prices between bid and offer) and so the price paid to buy it back rises fast. 

This was the wrong stock to short (Coalition protected, lease orders and dividend just delayed (not cancelled), just Bowen/Rudd off the cuff comments and no new FBT policy even formed yet, no legislation enacted or even formed, +15% increase in FY13 earnings, 3-4m shares short, fundies still willing to buy in, thinly traded.

I expect the buying to continue strong today but at a more frantic pace ....as there will be far less stock available to purchase. Selling was completed yesterday morning.....and  now there could be buying demand for as many 8m shares (3-4m short plus fundie average downs, new buyers, hedge arb buyers lets say another 3-4m conservatively...that is 8 days of buying required within T+3 and at that rate MMS may be back to where it was before the trading halt if  not higher if the odds improve of a coalition Victory.

Just my read.


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## GuruofGurus (26 July 2013)

GuruofGurus said:


> Skyquake...like your work....I expect a gap up and the naked shorts and shorts that cant find sufficient  stock in an illiquid stock without the ability to borrow them to be in a world of pain. By my reckoning, the lion share of the 4m shares short (naked or other wise) were shorted at the open, $7.50 and $8.00 so with the stock going over $9 and perhaps even well over $10 again the short covering will begin in earnest. Yesterday the volume was there but today it will be less and only the first hour on a friday and therein lies the danger if you need to buy it back. This stock can also form big spread gaps (prices between bid and offer) and so the price paid to buy it back rises fast.
> 
> This was the wrong stock to short (Coalition protected, lease orders and dividend just delayed (not cancelled), just Bowen/Rudd off the cuff comments and no new FBT policy even formed yet, no legislation enacted or even formed, +15% increase in FY13 earnings, 3-4m shares short, fundies still willing to buy in, thinly traded.
> 
> ...




oops where is the selling..... 3 x the buying right now and I wont be suprised to see that ratio become 4-5x by the open.

I expect natural Volume will no more than be half of yesterday  so maybe 6m shares get transacted today so the shorts mathematically cannot get close to acquiring their yesterday aggressive short sold shares back before the weekend and they need to. Would not want to be short this over a weekend. No borrowing around either.

Let the mad scramble for shares begin. A few fundies may push it along with their average downs....making shorts scramble harder.

Just my read.


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## GuruofGurus (26 July 2013)

GuruofGurus said:


> oops where is the selling..... 3 x the buying right now and I wont be suprised to see that ratio become 4-5x by the open.
> 
> I expect natural Volume will no more than be half of yesterday  so maybe 6m shares get transacted today so the shorts mathematically cannot get close to acquiring their yesterday aggressive short sold shares back before the weekend and they need to. Would not want to be short this over a weekend. No borrowing around either.
> 
> ...




Only 175,000 shares to buy on screen and only 90,000 shares to $10.50....even if there is double that off screen there is simply no available stock to buy back and 6-8m shares in demand approx. 

That is what a "short squeeze from hell" is called. This could rise substantially today. Sit tight. If 1-2 hedge funds go long or existing fundies top up in the squeeze.... share demand could skyrocket. Price will gap up.

This was was a bad short and for some it is going horribly wrong.


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## FxTrader (26 July 2013)

Hmm, MMS opens up 8%.  Perhaps the day traders should have left something on the table after all.


----------



## Trembling Hand (26 July 2013)

FxTrader said:


> Hmm, MMS opens up 8%.  Perhaps the day traders should have left something on the table after all.




Why? Thats not their play?


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## FxTrader (26 July 2013)

Trembling Hand said:


> Why? Thats not their play?




It was the wrong play.


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## Trembling Hand (26 July 2013)

FxTrader said:


> It was the wrong play.




Err ever hear of trade your plan?


----------



## FxTrader (26 July 2013)

Trembling Hand said:


> Err ever hear of trade your plan?




Sure, and exiting yesterday was the wrong plan for MMS, now up 10%.


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## Trembling Hand (26 July 2013)

FxTrader said:


> Sure, and it was the wrong plan for MMS, now up 10%.




Oh my god.  So every time you see an occurrence of a "i should of" you change you strategy....... Brilliant approach!!


----------



## FxTrader (26 July 2013)

Trembling Hand said:


> Oh my god.  So every time you see an occurrence of a "i should of" you change you strategy....... Brilliant approach!!




Not what I am saying at all.  Take your frustation out on someone else.


----------



## craft (31 July 2013)

It appears that the auto industry has put together a 10 Million advertising fund for the election campaign (ouch). Coupled with the ABS new car sales figures due 19 Aug and 17 Sept  which will undoubtedly show officially the biggest drop in car sales EVER.  State governments(including Labor) are opposed. Charities, Health dept etc are screaming out about a blow out in wages which will be caused by the move etc etc. Business groups are opposed. It seems Rudd has more to worry about then just Federal opposition on this. I suspect if the low information voters get swayed from their rort opinion Rudd will backflip in a flash. 



> While the Rudd Government has claimed it will not make any changes to the sudden overhaul of the tax rules on company cars - announced on July 16 and which has already cost 300 jobs and threatens a further 3000 - it has been privately canvassing ideas with the car industry.





The only proposal I have seen so far is a $3000 FBT rebate to public servants for Aus built cars.  Peter Costello has already been all over that in relation to the equity of it only being available to public servants.

When will Rudd learn that non-consultative knee jerk populist politics screws up business confidence and ultimately backfires?

I suspect, had the industry been consulted we would have got a 1% lift to the 20% statutory rate each year  – people would have phased out of novtated leases or swapped to operating method  at varying rates depending on their circumstance over the next 5 odd years and everybody would have had time to adjust to the ending of a 28 year old policy.


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## craft (31 July 2013)

An example of the auto industry propaganda.  

http://www.youtube.com/watch?v=iN7NYZg6oUU&feature=player_embedded

Hmmm, likely effective for their audience though.

I wonder how an advertising campaign will play out during the election. Deal anybody?


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## notting (31 July 2013)

There is no way Rudd is going to win the election.
This is a good bet on MMS!


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## db94 (3 August 2013)

election date set to be 7 of september with the odds on that date at $1.01 on sportsbet. I wonder how the price of MMS will react to the announcement of the election date; id expect it to go up with some certainty as to the demise of Rudd.

Could be a good first trade, just a little excited


----------



## skyQuake (3 August 2013)

db94 said:


> election date set to be 7 of september with the odds on that date at $1.01 on sportsbet. I wonder how the price of MMS will react to the announcement of the election date; id expect it to go up with some certainty as to the demise of Rudd.
> 
> Could be a good first trade, just a little excited




Don't see how this is a good thing for MMS. The orig date was 14th Sept, KRudd just made it 1 week earlier - imo thats a sign of strength. Someone behind in the polls would want to buy more time for a shift in sentiment or for some serious campaigning. 

As mentioned by craft, auto sales come out 19th Aug and 17th Sept fwiw. In the meantime I would just expect MMS to chop around.


----------



## twojacks28 (7 August 2013)

Surely this is going to rocket up closer to the election date? Bookies have Coalition at 1.18 and are rarely wrong in general. How has this stock not gone back up more!


----------



## ROE (7 August 2013)

twojacks28 said:


> Surely this is going to rocket up closer to the election date? Bookies have Coalition at 1.18 and are rarely wrong in general. How has this stock not gone back up more!




that the dilemma ..

Bookies said Lib will win
Current Poll said Labor win 

50/50% from here on...no sure bet...


----------



## twojacks28 (7 August 2013)

ROE said:


> that the dilemma ..
> 
> Bookies said Lib will win
> Current Poll said Labor win
> ...




Not sure what polls you're referring to but all the ones I have seen suggest otherwise. Mainly 52-48 to the Coalition.


----------



## db94 (7 August 2013)

twojacks28 said:


> Not sure what polls you're referring to but all the ones I have seen suggest otherwise. Mainly 52-48 to the Coalition.




yep polls are around 52-48

The bookies obviously have the odds like that for a reason, i highly doubt labor has a chance of winning.

The stock has been performing well, since the beginning of august its gone up $1 or 12%.

I think it hasnt skyrocketed back to or near its previous highs is because the election period is full of uncertainty. Abbott could well bugger things up before the election and it be all over for him and MMS. 

Also I think there's the uncertainty of auto sales figures


----------



## Julia (7 August 2013)

ROE said:


> Current Poll said Labor win



What poll is that, ROE?  Can you provide a link?


----------



## twojacks28 (7 August 2013)

db94 said:


> yep polls are around 52-48
> 
> The bookies obviously have the odds like that for a reason, i highly doubt labor has a chance of winning.
> 
> ...





All I know is I'm putting all I got into it tomorrow


----------



## ROE (7 August 2013)

Julia said:


> What poll is that, ROE?  Can you provide a link?




AFR Election article that tally up all the poll and average it out ...

Labor ahead 1% but like I say it's 50/50 because the poll is too close to
really pick winner...

http://data.afr.com/polling.aspx?type=pops&dimensions=wide

We probably have a better idea I say a few day out from polling day


----------



## db94 (7 August 2013)

twojacks28 said:


> All I know is I'm putting all I got into it tomorrow




all the best. im gonna jump in some time soon too but i dunno when yet. just sitting and waiting for the perfect opportunity

- - - Updated - - -



ROE said:


> AFR Election article that tally up all the poll and average it out ...
> 
> Labor ahead 1% but like I say it's 50/50 because the poll is too close to
> really pick winner...
> ...




this shows it at 52/48 as stated


----------



## twojacks28 (7 August 2013)

Big risk big reward. Hopefully it pays off soon. Good luck to all those that are currently in and or considering it.


----------



## galumay (8 August 2013)

twojacks28 said:


> Big risk big reward. Hopefully it pays off soon.




Don't forget the other side of that equation, "Big risk, big loss."

I see it all the time in many aspects of life, people prepared to take high risks for potential high gains - who then whinge incessantly when the risk comes home to roost and instead they realise, or become aware of the potential for huge losses.


----------



## skc (8 August 2013)

twojacks28 said:


> Big risk big reward. Hopefully it pays off soon. Good luck to all those that are currently in and or considering it.




MMS will not be the same stock again. What happens in 3 years time at the next election? Do we go through the same thing where the business looking at potentially losing half it's profit again? Or in another 3 years?

What sort of risk premium would investors put on a stock that has a large part of its earnings subjected to politically charged, potential disappearance at irregular intervals?

The market got complacent at $18 which really was perfect-sunshine-forever valuation. Will the market make the same mistake again on MMS? My guess is probably not for a very long time.


----------



## Klogg (8 August 2013)

skc said:


> MMS will not be the same stock again. What happens in 3 years time at the next election? Do we go through the same thing where the business looking at potentially losing half it's profit again?




This is the only reason I held back...

Has there been another listed company where changes in legislation have threatened profitability in a similar way? I'd like to see how that played out...


----------



## Knobby22 (8 August 2013)

Klogg said:


> This is the only reason I held back...
> 
> Has there been another listed company where changes in legislation have threatened profitability in a similar way? I'd like to see how that played out...




Yes CAB. Didn't go well.


----------



## ROE (8 August 2013)

Knobby22 said:


> Yes CAB. Didn't go well.




I have CAB  and yes uncertainty and regulation kill the share price 
Lesson learned


----------



## craft (8 August 2013)

skc said:


> The market got complacent at $18 which really was perfect-sunshine-forever valuation.




SKC

Could I get a few more thoughts on this over at the PV of future cash flows thread if you have the time.

Thanks


----------



## twojacks28 (8 August 2013)

galumay said:


> Don't forget the other side of that equation, "Big risk, big loss."
> 
> I see it all the time in many aspects of life, people prepared to take high risks for potential high gains - who then whinge incessantly when the risk comes home to roost and instead they realise, or become aware of the potential for huge losses.



Of course, that's a given. 



skc said:


> MMS will not be the same stock again. What happens in 3 years time at the next election? Do we go through the same thing where the business looking at potentially losing half it's profit again? Or in another 3 years?
> 
> What sort of risk premium would investors put on a stock that has a large part of its earnings subjected to politically charged, potential disappearance at irregular intervals?
> 
> The market got complacent at $18 which really was perfect-sunshine-forever valuation. Will the market make the same mistake again on MMS? My guess is probably not for a very long time.




I've considered this already. Won't get back to the same levels because of the reasons you've mentioned. I think closer to the election though it will go up more and I'll pull out if all is going as planned.


----------



## FxTrader (9 August 2013)

twojacks28 said:


> Big risk big reward. Hopefully it pays off soon. Good luck to all those that are currently in and or considering it.




The risk vs reward is simply to attractive to ignore.  A conservative estimate of where the MMS price will go should the coalition win (high probability at this stage) is $13-$14 / share.  ~50% gain at the current price.


----------



## Klogg (9 August 2013)

FxTrader said:


> The risk vs reward is simply to attractive to ignore.  A conservative estimate of where the MMS price will go should the coalition win (high probability at this stage) is $13-$14 / share.  ~50% gain at the current price.




I can understand your point of view, but have you considered the fact that people may be reluctant to go through with this sort of car leasing arrangement given it may come into question again in the future?

In that case, you may have flat or declining earnings for a year or two (I don't know the area well enough to put a probability on this).
And this is without considering the effect the possible tax changes would have on investor sentiment relating to MMS.

Too many unknowns for me - I'll most likely be wrong, but I'll just take is as a lesson learnt.


----------



## db94 (9 August 2013)

FxTrader said:


> The risk vs reward is simply to attractive to ignore.  A conservative estimate of where the MMS price will go should the coalition win (high probability at this stage) is $13-$14 / share.  ~50% gain at the current price.




sportsbet odds are: coalition 1.21 and Labor 4.50. A few days ago Labor were at 4.00.

Putting Labors chances of winning at around 20% and Coalition 80%.

Worth the risk considering the short term reward IMO


----------



## Accumulator (10 August 2013)

Klogg said:


> I can understand your point of view, but have you considered the fact that people may be reluctant to go through with this sort of car leasing arrangement given it may come into question again in the future?
> 
> In that case, you may have flat or declining earnings for a year or two (I don't know the area well enough to put a probability on this).
> And this is without considering the effect the possible tax changes would have on investor sentiment relating to MMS.
> ...




Like others I am watching this stock and have dipped my toe in the water, albeit with a small lot and provisions for a quick exit if necessary. I am a Lib voter and though a win is looking a possibility, it is still too early and close to call. Rudd is clever operator and I would never let bias interfere with decisions regarding assets. The big attraction for the gambler in me is a chance to grab a quick 50% profit, i.e. bought at $8, sell at $12 and walk away whistling. The more logical conservative side of my split personality says "steady as you go".

While I respect your comments, do not think people will worry about rushing in to snap up a new agreement in the future, remembering that legislation is required to change such arrangements and no changes to existing contracts would be retrospective. So people would be safe in the knowledge that their new deal would continue unchanged until the term expired. I have some knowledge and experience of novated leases and they are very attractive to the current generation who have so many competing necessities for the disposable income. 

Last year they paid a dividend of 49c so at current share price of $9.41, that represents an annual return of just over 5%. I am no expert in this area, so I do not know what will happen to that dividend. Hopefully someone with knowledge can give some idea, however logic says the dividend amount per share would probably reduce.

It will be interesting to see how it plays out...good luck to all! :car:


----------



## db94 (12 August 2013)

Labor party @5.50 to win election now. Now could be the opportunity to make a nice hedge if Labor win and youre on MMS


----------



## FxTrader (12 August 2013)

db94 said:


> Labor party @5.50 to win election now. Now could be the opportunity to make a nice hedge if Labor win and youre on MMS




Looks like the MMS price is tracking with the odds today, up 3.5% in morning trade.


----------



## twojacks28 (12 August 2013)

db94 said:


> Labor party @5.50 to win election now. Now could be the opportunity to make a nice hedge if Labor win and youre on MMS




Why waste that money


----------



## db94 (12 August 2013)

Wow what a day for MMS, absolutely took off. The market must have taken in the odds by sportsbet for Abbott to win. I got in at a bit higher than I liked however I got free brokerage and the stock should go up following the election result, shouldn't lose... I hope. Good to get my hands dirty, at last


----------



## Hodgie (12 August 2013)

Certainly doesnt look good when Rudd is accused of cheating in the debate last night


----------



## twojacks28 (12 August 2013)

db94 said:


> Wow what a day for MMS, absolutely took off. The market must have taken in the odds by sportsbet for Abbott to win. I got in at a bit higher than I liked however I got free brokerage and the stock should go up following the election result, shouldn't lose... I hope. Good to get my hands dirty, at last




I think it had more to do with the debate last night as opposed to the odds although they are intertwined. Odds have been bad for a while but the debate did nothing for Rudd last night. Glad I got in a few days ago. Lets just hope it continues on it merry way to $12.


----------



## FxTrader (12 August 2013)

twojacks28 said:


> I think it had more to do with the debate last night as opposed to the odds although they are intertwined. Odds have been bad for a while but the debate did nothing for Rudd last night. Glad I got in a few days ago. Lets just hope it continues on it merry way to $12.




Agree, the debate had to be a clear win for Rudd to keep the lid on MMS speculation.  I am inclined to rethink my post-election price target for MMS given today's price action.  $15-$16 seems a reasonable target now.


----------



## db94 (12 August 2013)

FxTrader said:


> Agree, the debate had to be a clear win for Rudd to keep the lid on MMS speculation.  I am inclined to rethink my post-election price target for MMS given today's price action.  $15-$16 seems a reasonable target now.




and todays movement was only from an election result.  

I think the $15-16 price seems reasonable as the industry will be better off under Abbott than Rudd even if the tax hadnt been put forward by Rudd, IMO


----------



## twojacks28 (12 August 2013)

FxTrader said:


> Agree, the debate had to be a clear win for Rudd to keep the lid on MMS speculation.  I am inclined to rethink my post-election price target for MMS given today's price action.  $15-$16 seems a reasonable target now.





The thing is can it get back to $15-16 with the constant speculation every three years? As we know Abbott has all taxes under review but has said this one is off the cards but you never know. I hope you're right though!


----------



## db94 (12 August 2013)

twojacks28 said:


> The thing is can it get back to $15-16 with the constant speculation every three years? As we know Abbott has all taxes under review but has said this one is off the cards but you never know. I hope you're right though!




of course it will in the short term but eventually the FBT tax will come back into talks and expect it to be a part of Labors policy in the next election.

The other worry is whether the current price already includes the fact that Abbott has all but won it; just look at the sportsbet odds. Will him getting voted in really make the price soar _that_ much? I hope so. 

I guess we will have to wait and see


----------



## FxTrader (13 August 2013)

twojacks28 said:


> The thing is can it get back to $15-16 with the constant speculation every three years? As we know Abbott has all taxes under review but has said this one is off the cards but you never know. I hope you're right though!




Joe Hockey has been emphatic that the coalition will not support the proposed FBT changes (still not L-A-W law) in government or opposition.  Post-election, Labor is unlikely to revisit such an unpopular change as part of a new policy platform in opposition.  If the opposition wins the FBT policy is dead and if not it's still not certain to pass into law.  Probability favours the risk taker here.  The fundamentals that drove MMS to $18/share pre-announcement will be reinstated after the election IMO.


----------



## twojacks28 (13 August 2013)

FxTrader said:


> Joe Hockey has been emphatic that the coalition will not support the proposed FBT changes (still not L-A-W law) in government or opposition.  Post-election, Labor is unlikely to revisit such an unpopular change as part of a new policy platform in opposition.  If the opposition wins the FBT policy is dead and if not it's still not certain to pass into law.  Probability favours the risk taker here.  The fundamentals that drove MMS to $18/share pre-announcement will be reinstated after the election IMO.




I agree. Another great start today up another .51c as at this post. This looks like its going to be very profitable.


----------



## ROE (13 August 2013)

Well done to all the guys that took the risk  and bought this stock in the last 2 weeks


----------



## db94 (13 August 2013)

ROE said:


> Well done to all the guys that took the risk  and bought this stock in the last 2 weeks




Lets hope the rally continues! 

Might be a stupid question, so please ignore if its a noob question, but in the depth of market for MMS on commsec it says there are 500 buyers for 689,000 units and 87 sellers for 130,000 units. Does this mean the sentiment is bullish for this stock or does it have no relevance? Thanks, sorry to drift off topic


----------



## twojacks28 (13 August 2013)

db94 said:


> Lets hope the rally continues!
> 
> Might be a stupid question, so please ignore if its a noob question, but in the depth of market for MMS on commsec it says there are 500 buyers for 689,000 units and 87 sellers for 130,000 units. Does this mean the sentiment is bullish for this stock or does it have no relevance? Thanks, sorry to drift off topic





There are definitely a lot of people buying or wanting to at the moment. Yesterday I think the stock had about 9m in trade value go through whereas today we are nearly at 30m. Last two days have been very bullish.

I'm with Westpac but I'm sure you can see as well. Have a look at the trade volume graph.


----------



## db94 (13 August 2013)

twojacks28 said:


> There are definitely a lot of people buying or wanting to at the moment. Yesterday I think the stock had about 9m in trade value go through whereas today we are nearly at 30m. Last two days have been very bullish.
> 
> I'm with Westpac but I'm sure you can see as well. Have a look at the trade volume graph.




I would but I'm on my phone and the commsec app is terrible, only giving very basic info. The smallest time frame for the graph is 3 months lol

I can't see it running like this for long though. Eventually it'll run into some resistance, but where that is I have no clue


----------



## skyQuake (13 August 2013)

db94 said:


> I would but I'm on my phone and the commsec app is terrible, only giving very basic info. The smallest time frame for the graph is 3 months lol
> 
> I can't see it running like this for long though. Eventually it'll run into some resistance, but where that is I have no clue




Looking for gap up, crazy volume and price spike, then fade fade fade
aka Billabong type action


----------



## db94 (13 August 2013)

skyQuake said:


> Looking for gap up, crazy volume and price spike, then fade fade fade
> aka Billabong type action




I was thinking something similar as I also follow BBG however I think that BBG was just pure speculative demand. With MMS there's an actual reason behind its demand and its share price hasn't fallen over a year+ and really only fell due to the FBT tax announcement


----------



## galumay (13 August 2013)

I am a bit conflicted with MMS, i bought a parcel as a spec purchase, its outside of my normal investing and I am now up 30%. The problem for me is that I will have to pay CGT at my marginal rate (highest bracket), if I sell within 12 months. 

By my calculations if they are still anything over $10.60 in 12 months I will be in front compared to selling now at $11.50.

I feel like I need to set a sell point but I am torn between setting a date (after the election, 12 months +, etc.) or setting a price and selling then.

Does anyone have any suggestions as to a strategy in this sort of situation?


----------



## db94 (13 August 2013)

Adding on my last post: (can't seem to edit on iPhone)

There will no doubt be a correction though sometime soon if the rally continues


----------



## twojacks28 (13 August 2013)

db94 said:


> Adding on my last post: (can't seem to edit on iPhone)
> 
> There will no doubt be a correction though sometime soon if the rally continues




The other side of that argument is that this is the correction. A month ago this was trading at $18 and today closed at $11.50. It obviously cannot continue to rise at such extraordinary levels though although I'm happy to be proven wrong


----------



## Klogg (13 August 2013)

galumay said:


> Does anyone have any suggestions as to a strategy in this sort of situation?




Don't make a decision solely on tax considerations. If you think it's a 'sell', sell it and pay your tax accordingly... 

It's not nice paying 45% tax, but you don't get around that by holding things more than you should... You'd rather take a look at your entity structure (would you be better off w/ a trust, corporate trustee and holding company beneficiary) and put that in place instead... This way your tax considerations don't sway your investment decisions.

Remember, in simple terms, paying tax just means you're making money.

(P.S. entity structure mentioned was just an example - not advice)


----------



## FxTrader (13 August 2013)

twojacks28 said:


> The other side of that argument is that this is the correction. A month ago this was trading at $18 and today closed at $11.50. It obviously cannot continue to rise at such extraordinary levels though although I'm happy to be proven wrong




Given the buying interest today in MMS there could easily be more headroom from here.  I thought the $10 resistance level would hold a bit longer but the debate and polling numbers seemed to have caused a breakout and surge in confidence that the FBT changes are never going to see the light of day.  I would expect momentum to slow from here.


----------



## ROE (13 August 2013)

galumay said:


> I am a bit conflicted with MMS, i bought a parcel as a spec purchase, its outside of my normal investing and I am now up 30%. The problem for me is that I will have to pay CGT at my marginal rate (highest bracket), if I sell within 12 months.
> 
> By my calculations if they are still anything over $10.60 in 12 months I will be in front compared to selling now at $11.50.
> 
> ...




nope ... Tax is an after thought ....Make profit is the foremost consideration.....obviously If I already hold for 11 and 1/2 months
and thinking to sell then I would wait another week or two but not for months if I want to get out...


----------



## db94 (14 August 2013)

It seems like there's a fair bit of resistance at the $12 mark. It hit there then came back down very fast


----------



## twojacks28 (14 August 2013)

Seems like a few people are trying to force the stock down and then buy at a cheaper price.


----------



## tech/a (14 August 2013)

twojacks28 said:


> Seems like a few people are trying to force the stock down and then buy at a cheaper price.




How do you know that?


----------



## db94 (14 August 2013)

I got the hell outta there at 11.15. I dont think today will turn out too good... It was pretty over bought and this will be the correction IMO thats not to say that it wont continue on to 13-14 in a few weeks


----------



## FxTrader (14 August 2013)

db94 said:


> I got the hell outta there at 11.15. I dont think today will turn out too good... It was pretty over bought and this will be the correction IMO thats not to say that it wont continue on to 13-14 in a few weeks




I would say that profit takers are dominating given the big price spike the last two days, hardly that surprising really.  If holding out for a post-election MMS market price, $14-15 would seem to be a reasonable target price to exit on.  If MMS does get to $14 pre-election then the decision to hold becomes more complicated and depends on one's view of upside potential from there.


----------



## twojacks28 (14 August 2013)

tech/a said:


> How do you know that?




Watching the market depth this morning and what was being traded there was a substantial amount of small trades being put on at well below the current price. There was plenty of 1, 20, 50, 100 units consistently being put on at 10-15c lower than the current price. I think it's achieved it's goal with a bit of panic selling, by people who think it's gone up too much too quickly. There is no doubt it has skyrocketed but given the potential and upside there is no reason to sell at the minute imho. 



db94 said:


> I got the hell outta there at 11.15. I dont think today will turn out too good... It was pretty over bought and this will be the correction IMO thats not to say that it wont continue on to 13-14 in a few weeks




Panic sell?



FxTrader said:


> I would say that profit takers are dominating given the big price spike the last two days, hardly that surprising really.  If holding out for a post-election MMS market price, $14-15 would seem to be a reasonable target price to exit on.  If MMS does get to $14 pre-election then the decision to hold becomes more complicated and depends on one's view of upside potential from there.




No doubt there are people taking the quick profit they've made. Still a substantial volume being bought though. I think the fund managers are acquiring the stock at the moment.

- - - Updated - - -

The train has stopped at the station and is just refueling.


----------



## db94 (14 August 2013)

twojacks28 said:


> Panic sell?




Pretty much. I mean it was my first trade ever and to get on a stock that went up 12% in one day, hit $12 the next and then fall by 3.5% is pretty crazy for me.

I think im gonna get on it again though. Looking at the slow stoch in a 5 day period it was over bought for a few days and is now undersold, so im thinking of getting on it again once the stoch gets back up above the over sold region

I think this arvo could be a good time to buy IMO its seems those who were in it for the short term gains are panicing (as stated previously and I myself did this) and its causing the price to fall. I'd suspect the financial institutes will be getting on it while people are panicing and its cheaper IMO

edit: i cant imagine what sort i'd be in if i'd held any longer with the price now at $10.91


----------



## twojacks28 (14 August 2013)

db94 said:


> Pretty much. I mean it was my first trade ever and to get on a stock that went up 12% in one day, hit $12 the next and then fall by 3.5% is pretty crazy for me.
> 
> I think im gonna get on it again though. Looking at the slow stoch in a 5 day period it was over bought for a few days and is now undersold, so im thinking of getting on it again once the stoch gets back up above the over sold region
> 
> ...




That makes sense then. I remember my first trade and I couldn't look as it plummeted the second I bought. I'm going to buy some more now actually. People are taking their profits and running.


----------



## db94 (14 August 2013)

twojacks28 said:


> That makes sense then. I remember my first trade and I couldn't look as it plummeted the second I bought. I'm going to buy some more now actually. People are taking their profits and running.




still pretty stoked with how i went though. To make $65 off a $720 trade aint too bad  thank god for the free $500 brokerage otherwise I would have only made $25


----------



## twojacks28 (14 August 2013)

We all have to start somewhere mate. Just got another lot at 10.95 so pretty happy with that.


----------



## tech/a (14 August 2013)

Technically I think your being suckered by some astute sellers.
Its common for a gap to be tested.
Un common for it to be closed particularly in quick time and particularly such a large gap down.

Both the gap will and is being tested then the low at around $7s
Wouldn't be buying my brains out.


----------



## db94 (14 August 2013)

It appears there's a fair bit of support at $11. It'll be interesting to see what happens tomorrow


----------



## twojacks28 (14 August 2013)

The stock had gone up roughly 33% in a couple of days. It couldn't continue rising at such levels and a downturn like this was inevitable. It is going to continue to go up even more the closer we get the the election. People are merely taking the quick profit and there is lots of them.


----------



## db94 (14 August 2013)

twojacks28 said:


> The stock had gone up roughly 33% in a couple of days. It couldn't continue rising at such levels and a downturn like this was inevitable. It is going to continue to go up even more the closer we get the the election. People are merely taking the quick profit and there is lots of them.




I agree and i think this was just an exhaustion gap. People decided to jump boat as soon as things got bad. Although Im still a bit confused why it fell so sharp at $12. If it falls below $11 it could get ugly real fast tomorrow.Im still optimist though


----------



## skyQuake (14 August 2013)

db94 said:


> I agree and i think this was just an exhaustion gap. People decided to jump boat as soon as things got bad. Although Im still a bit confused why it fell so sharp at $12. If it falls below $11 it could get ugly real fast tomorrow.Im still optimist though




Which gap are you talking about?

Its been following CBA (green line) pretty closely last few days. Guess thats where traders look for direction.




$12 is also the 161.8% extensive of the primary $6.75 to $9.97 bounce.

Also I note there is a gap to be filled @ $10.42 to the downside.

Probably any combination of these factors


----------



## db94 (14 August 2013)

skyQuake said:


> Which gap are you talking about?
> 
> Its been following CBA (green line) pretty closely last few days. Guess thats where traders look for direction.
> View attachment 53831
> ...




sorry if I made no sense, im still learning; maybe I should just keep my mouth shut lol. I was talking about the gap at around 11.50 to 11.80, if that makes sense


----------



## skyQuake (14 August 2013)

db94 said:


> sorry if I made no sense, im still learning; maybe I should just keep my mouth shut lol. I was talking about the gap at around 11.50 to 11.80, if that makes sense



Oh right yeah, the gap this morning that got filled pretty quickly.


----------



## db94 (15 August 2013)

I was expecting today be similar to the one before and the gap at around $10.40 to be closed. It kind of bounced around the low $11's. It should hopefully slowly crawl higher as the election date nears


----------



## twojacks28 (15 August 2013)

db94 said:


> I was expecting today be similar to the one before and the gap at around $10.40 to be closed. It kind of bounced around the low $11's. It should hopefully slowly crawl higher as the election date nears




Was a good day up 2%. I think tomorrow will be the same. Abbot on the 7.30 report categorically ruled out following Rudds fbt policy. Looking good.


----------



## Hodgie (16 August 2013)

Australian Labor Party moves from $5.50 up to $6.00 to win the election now they appear to keep going up as the election drawns nearer. Lets see if that is reflected in the market.


----------



## db94 (16 August 2013)

Hodgie said:


> Australian Labor Party moves from $5.50 up to $6.00 to win the election now they appear to keep going up as the election drawns nearer. Lets see if that is reflected in the market.




It had before and it most likely will again.

although Im not sure what time the odds had changed. It may well have been why the stock rose yesterday


----------



## Hodgie (16 August 2013)

db94 said:


> It had before and it most likely will again.
> 
> although Im not sure what time the odds had changed. It may well have been why the stock rose yesterday




Yeah im not sure either, I checked 2 days ago but didn't check yesterday. You could be right. The main point here is the fact that as the election draws nearer confidence continues to grow for the Liberals.


----------



## FxTrader (16 August 2013)

twojacks28 said:


> Was a good day up 2%. I think tomorrow will be the same. Abbot on the 7.30 report categorically ruled out following Rudds fbt policy. Looking good.




The Libs have been very consistent about FBT policy.  MMS is a $15+ stock post-election trading at just over $11.  With the market looking to move down about 1% today it will be interesting to watch investor sentiment towards MMS.


----------



## FxTrader (16 August 2013)

As I suspected,  MMS is up almost 2% in morning trade.


----------



## db94 (16 August 2013)

It broke through the 11.45 resistance mark today. With the upward wedge, I was thinking of buying this morning but as the rookie I am I doubted my instincts and hesitated  Bugger

Plenty more opportunities around the corner though  Back to the drawing board for me


----------



## db94 (16 August 2013)

Update on the odds. Labor now at $6.50 and coalition $1.11

could break $12 mark in the next few days


----------



## twojacks28 (16 August 2013)

db94 said:


> Update on the odds. Labor now at $6.50 and coalition $1.11
> 
> could break $12 mark in the next few days




Lets hope today!


----------



## db94 (16 August 2013)

twojacks28 said:


> Lets hope today!




didnt happen today although there was a massive spike in volume at the close pushing the price up from 11.46 to 11.58


----------



## twojacks28 (16 August 2013)

db94 said:


> didnt happen today although there was a massive spike in volume at the close pushing the price up from 11.46 to 11.58




No, but it got close, a high of 11.95. Was a good result in the end with the market down overall today. Early next week it will get there.


----------



## db94 (16 August 2013)

twojacks28 said:


> No, but it got close, a high of 11.95. Was a good result in the end with the market down overall today. Early next week it will get there.




True. Lets hope so


----------



## twojacks28 (16 August 2013)

Did you buy in again?


----------



## db94 (17 August 2013)

twojacks28 said:


> Did you buy in again?




Yep. This time I'm gonna sit and wait till after the election


----------



## FxTrader (18 August 2013)

db94 said:


> Yep. This time I'm gonna sit and wait till after the election




I think you will be rewarded for doing so.  While polling numbers seem to be fairly stable at around 52/48 to the coalition, the polling in the marginals is overwhelmingly in favor of the coalition.  Only a miracle would see Labor win this election from here.  

Post-election pricing for MMS is now what I focus on.  I don't expect MMS to reach it's prior high $18.64 any time soon after the election result since there will likely be heavy profit taking on the way up.  Having said this, with their business model restored and weaker rivals crippled, revenues should return to normal quickly.  MMS financials were impressive and likely to be so again post-election.


----------



## ROE (18 August 2013)

I think the Lib will win but I wouldn't be too sure as 
past events tell you sometimes people tell you one thing in poll and vote another in polling booth ..

if this is the case those margin seats the result will still be 50/50 ......

sometimes electorate passively tell you in poll number so you do something about their seat and votes the other party on polling day..


----------



## twojacks28 (18 August 2013)

ROE said:


> I think the Lib will win but I wouldn't be too sure as
> past events tell you sometimes people tell you one thing in poll and vote another in polling booth ..
> 
> if this is the case those margin seats the result will still be 50/50 ......
> ...




The Libs are a certainty to win. The old Rudd is appearing again and he bookies now have them at $7. Unless some incredible miracle happens then they have nan chance.


----------



## galumay (18 August 2013)

FxTrader said:


> Post-election pricing for MMS is now what I focus on.




I suspect they are already fully priced for the election, the market thinks there is almost no doubt the LNP Coalition of Minorities will win the election and has priced the stock at $11-12 on that basis.

As a holder I am happy to be proven incorrect, but I am not expecting much more upside in the near future.


----------



## FxTrader (18 August 2013)

galumay said:


> I suspect they are already fully priced for the election, the market thinks there is almost no doubt the LNP Coalition of Minorities will win the election and has priced the stock at $11-12 on that basis



I serious doubt this to be the case.  It's only the uncertainty that's keeping MMS at the current price level.  Value investing firms like Clime have MMS valued at over $15 and they are usually more conservative than Mr. Market.


----------



## twojacks28 (18 August 2013)

FxTrader said:


> I serious doubt this to be the case.  It's only the uncertainty that's keeping MMS at the current price level.  Value investing firms like Clime have MMS valued at over $15 and they are usually more conservative than Mr. Market.




Totally agree. This is only going up and I think it will be $12 tomorrow. I'm thinking around the 14-15 area is where it will end up trading around.


----------



## galumay (18 August 2013)

FxTrader said:


> It's only the uncertainty that's keeping MMS at the current price level.




Uncertainty about what!? 

I am happy for you guys to be correct, but if I am right and its fully priced at round $12 I am very happy too!


----------



## db94 (18 August 2013)

galumay said:


> Uncertainty about what!?
> 
> I am happy for you guys to be correct, but if I am right and its fully priced at round $12 I am very happy too!




I kind of agree with you, however there is still a chance of Rudd winning; its not much but theres still a chance. This is why $14-15 mark should be about right... i hope


----------



## VSntchr (18 August 2013)

I think it is dangerous to get too caught up in trying to figure out where MMS "should be" simply based on the election outcome.
While it is a factor, it should not be used to price MMS based on where it was pre-announcement. Just remember that only a few months ago it was $14...which it is really not that far from now already...

Whilst others such as SKC have already mentioned this, I think its important that it is re-iterated..the stock may no longer command the multiple achieved pre-announcement for a number of years. Even if Labour does not win - the stock is not completely de-risked and the legislative risk will be fresh in investors minds.


----------



## FxTrader (18 August 2013)

VSntchr said:


> I think it is dangerous to get too caught up in trying to figure out where MMS "should be" simply based on the election outcome.  While it is a factor, it should not be used to price MMS based on where it was pre-announcement. Just remember that only a few months ago it was $14...which it is really not that far from now already...




Not "dangerous" at all and while valuation methods may vary the analysts that I follow have MMS valued at between $14-$15 post election of a coalition government (that's fundamental analysis not chart reading).  MMS's market position will be even stronger than before and the financials quickly restored - car leasing will continue to be as popular as before.  We shall see where the price ends up.  BTW, $14 is 20% away from the current price and I would be quite satisfied with another 20% thanks.


----------



## Accumulator (19 August 2013)

FxTrader said:


> Not "dangerous" at all and while valuation methods may vary the analysts that I follow have MMS valued at between $14-$15 post election of a coalition government (that's fundamental analysis not chart reading).  MMS's market position will be even stronger than before and the financials quickly restored - car leasing will continue to be as popular as before.  We shall see where the price ends up.  BTW, $14 is 20% away from the current price and I would be quite satisfied with another 20% thanks.




My sentiments too FxTrader...spot on!!


----------



## db94 (19 August 2013)

With recent polls getting worse for ALP, today could be a good day. the odds now at Coalition $1.09 and Labor $7.25

I feel a break through $12 today


----------



## Hodgie (19 August 2013)

I think where Valuesnatcher is saying that it's 'dangerous' is the fact that if the election results are favourable for MMS 
the price goes up to $14+ which reflects 20%+ increase from current price while we are risking potentially a 50%+ decrease in value if the ALP won.  

So if the current price continues to rise over $12 and beyond which has been mentioned previously in this thread, the upside of the post election price becomes less attractive while the downside risk continues to grow. This needs to be taken into consideration when doing a pre-election valuation. The market price may ignore the downside risk (this seems to also be a common theme) and only value in the potential upside.

At some point if the price continues on this upward trend before the election it may not be worth the risk to hold MMS even if the chances of the ALP winning are slim.

I have current holdings in MMS and if the pre-election price continues to grow as it has been then I may consider taking my profits before the election results are in.


----------



## galumay (19 August 2013)

Hodgie said:


> I think where Valuesnatcher is saying that it's 'dangerous' is the fact that if the election results are favourable for MMS
> the price goes up to $14+ which reflects 20%+ increase from current price while we are risking potentially a 50%+ decrease in value if the ALP won.




Actually I think what Valuesnatcher is saying is that its dangerous to link the price of MMS too closely to the election result - because its probably already fully valued at around $12-14 and in fact was over valued when it was $18 and the market is unlikely to price it so highly again regardless of the election result.


----------



## Hodgie (19 August 2013)

galumay said:


> Actually I think what Valuesnatcher is saying is that its dangerous to link the price of MMS too closely to the election result - because its probably already fully valued at around $12-14 and in fact was over valued when it was $18 and the market is unlikely to price it so highly again regardless of the election result.




We are getting at the same point here, perhaps my wording was not the best. I agree completely with what you have stated here.

When I say potentially $14+ I was just using the valuation figures thrown (this is not my valuation) out based on the scenario if the price did increase to that level post election. I am not saying that it will. It was merely for the purpose of illustrating how much greater the potential downside risk is compared to the potential increases from current price.


----------



## Knobby22 (19 August 2013)

If all those people have actually been made redundant, then they will have to pay them out. this will appear in the next 6 months and will definitely hit the bottom line.


----------



## craft (19 August 2013)

```

```



Knobby22 said:


> If all those people have actually been made redundant, then they will have to pay them out. this will appear in the next 6 months and will definitely hit the bottom line.




As far as I understand MMS hasn't made anybody redundant yet. A lot of other industry players have already had to though.


----------



## craft (19 August 2013)

If the FBT rules don’t change, I would think the second chance and fear of missing out again will see people eager to lock in while they can. More leases, longer terms, wish list car rather than just adequate etc - ie maximising while they can.  MMS has retained their staff so the business as usual earning stream looks good. Costs for carrying excess staff between the announcements and the election will hit 2014 but to the extent people took forced holidays it’s already funded in the employee entitlement accrual.  

If the FBT changes do occur – the downside earnings stream is probably better then prior to the announcement because labour has been talking about exemptions for Aus built cars and $3,000 exemptions for government employees etc. Ie they are softening their stance and that would be reflected in any eventual legislation if they were re-elected.

In my view, earnings stream implications are positive both on the business as usual scenario and the removal of the FBT scenario. 

In comparison to prior to the announcement my probability of earning stream change timing has obviously worsened if Labor has power but improved if liberals are in power.   Labor’s chance of having the power to legislate any time soon is pretty dismal in opinion.

On balance - all above actually increases my estimation of MMS balance of probability earnings stream. 

The real change is the market multiple being applied. That has taken a major hit and will be a matter of years (if ever) not days, weeks or months to reach pre announcement levels again. MMS needs to help itself on the multiple front by continuing to broaden its earnings streams (ie interleasing) and geographic spread (ie UK trial). 

I suspect under a liberal government it is feasible that MMS could take out previous highs within a reasonable period but it will be on a combination of higher earnings and lower multiples – the tail risk to earnings will remain and presents a stimulating investment challenge.


----------



## Ves (19 August 2013)

craft said:


> MMS needs to help itself on the multiple front by continuing to broaden its earnings streams (ie interleasing) and geographic spread (ie UK trial).



This was one of my fairly big focusses in my investment research.

MMS is one of the few,  or perhaps the only,  leasing companies in the salary packaging administration space that has bothered to expand into other earnings streams and look at vertical integration possibilities.

A Coalition victory would provide sufficient opportunities to use the excess free cash flow from their FBT revenue streams to continue down the path of expanding the diversity of their revenue base.

The de-risking process started in 2011, and arguably is still in its infancy.  If management is capable, and my opinion is that they are, then they will be much better placed when the gong is sounded next time around by willing legislators.

My opinion is that the threat of the enforced changes to FBT by the ALP has significantly weakened MMS' competition through forced redundancies and has in effect enhanced (or at least reinforced) their competitive moat.


----------



## twojacks28 (20 August 2013)

Article from today's Australian - http://www.theaustralian.com.au/bus...gnals-rudds-woes/story-fn91v9q3-1226700167538


----------



## db94 (22 August 2013)

Just fell back under the $12 mark and hasn't been moving as much.  Maybe the election result has been fully factored in by the market for MMS


----------



## db94 (22 August 2013)

Adding on that: there's also gap between 11.50 and 12 (on 5 day chart)  that id be weary about


----------



## Hodgie (22 August 2013)

db94 said:


> Just fell back under the $12 mark and hasn't been moving as much.  Maybe the election result has been fully factored in by the market for MMS




I think the outcome of the election has been factored in as an all but certain event, I sold out on Monday for $12.15. I could be wrong but im happy to take my profit and look for something else, I met my target price here.


----------



## db94 (22 August 2013)

Hodgie said:


> I think the outcome of the election has been factored in as an all but certain event, I sold out on Monday for $12.15. I could be wrong but im happy to take my profit and look for something else, I met my target price here.




very nice  Ill be watching closely and seeing what happens. im not as optimistic as I was before


----------



## ROE (22 August 2013)

Hodgie said:


> I think the outcome of the election has been factored in as an all but certain event, I sold out on Monday for $12.15. I could be wrong but im happy to take my profit and look for something else, I met my target price here.




Nice ride ... I think you did well I don't think it goes past 12-13 bucks even if abbot wins, just my opinion...
And if not you wish you are out -


----------



## craft (23 August 2013)

The damage to the economy is really starting to stack up.

With the amount of evidence building as to the economic impacts of removing the FBT statutory method – I doubt that Labour would legislate what they have proposed even if they win.  Probably can’t afford politically to back down in the campaign – but can’t economically afford this sort of shock to an industry if in power either.  A 1.8 Billion ‘proposed’ saving that will have many times that of negative impact on the economy and they would now know that from the post announcement impacts and belated consultation.



> More recent data shows that this downturn in vehicle orders has significantly worsened. The downward trend has not been arrested, but has accelerated; orders placed in the first half of August were 37% down on those in the first half of July. Orders for Australian manufactured vehicles were down by 35%, other vehicles by 38%.




http://www.afla.com.au/downloads/AFLA%20FBT%2020%20AUG.pdf




> Ford to shut production for 12 days, blaming FBT changes
> 
> Read more: http://www.theage.com.au/federal-po...fbt-changes-20130822-2sei9.html#ixzz2ck9Ui91R






> Hyundai Australia says FBT changes are a 'hand grenade'
> 
> Read more: http://www.news.com.au/business/hyu...17/story-e6frfm1i-1226700204636#ixzz2ckAE6N6k





AFMA looks at impacts beyond Novated leases.


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## Hodgie (26 August 2013)

ROE said:


> Nice ride ... I think you did well I don't think it goes past 12-13 bucks even if abbot wins, just my opinion...
> And if not you wish you are out -




The ALP moved up to $8.00 this morning to win and it is now at $9.50 at close of day. It seems that the bookies are almost completely ruling them out more and more each day. It is interesting that this time the move in these odds were not reflected in the market today, obviously those odds may not be 100% accurate as they are also exposed to current opinions as well but up until now the betting odds and the MMS price movements have been very highly correlated. It may be showing that the market has fully priced the election result in now so the outcome of the election as an event alone may no longer have as a significant impact on the SP moving forward.

It could take the market long time (if ever) to 'forgive' this large dip in price with the legislative risk looming over the company. kind of like an 'investor beware' warning.


----------



## craft (26 August 2013)

Hodgie said:


> The ALP moved up to $8.00 this morning to win and it is now at $9.50 at close of day. It seems that the bookies are almost completely ruling them out more and more each day. It is interesting that this time the move in these odds were not reflected in the market today, obviously those odds may not be 100% accurate as they are also exposed to current opinions as well but up until now the betting odds and the MMS price movements have been very highly correlated. It may be showing that the market has fully priced the election result in now so the outcome of the election as an event alone may no longer have as a significant impact on the SP moving forward.
> 
> It could take the market long time (if ever) to 'forgive' this large dip in price with the legislative risk looming over the company. kind of like an 'investor beware' warning.




MMS is due to report tomorrow. The uncertainty around an immanent update from the company probably more meaningful to the market today than pricing in changes to the election odds.


----------



## db94 (26 August 2013)

craft said:


> MMS is due to report tomorrow. The uncertainty around an immanent update from the company probably more meaningful to the market today than pricing in changes to the election odds.




what kind of report? (sorry if silly question) Isnt the annual report released on the 9th of September?

What ever it is, if its good MMS could adjust for the $9.00 odds now. Although I personally think MMS has factored in the election result.  If bad, who knows what'll happen.


----------



## skc (26 August 2013)

db94 said:


> what kind of report? (sorry if silly question) Isnt the annual report released on the 9th of September?
> 
> What ever it is, if its good MMS could adjust for the $9.00 odds now. Although I personally think MMS has factored in the election result.  If bad, who knows what'll happen.




MMS reporting their FY13 financials. The numbers themselves are already known and there shouldn't be any surprises at all. MMS however may provide updates on some of the following:
- H1 FY14 trading so far
- More detailed numbers on the impact of potential changes
- FY14 guidance
- Other measures currently being explored by the company

Remember the election result is a binary event... while betting odds are linear. The difference between $5 and $9 odd is significant only to the person making such bets. It has no bearing for MMS, and MMS is most definitely a bet on the election no more.


----------



## ROE (26 August 2013)

Agree...FY13 is given..market looking for future guidance with FBT uncertainty


----------



## Hodgie (27 August 2013)

skc said:


> Remember the election result is a binary event... while betting odds are linear. The difference between $5 and $9 odd is significant only to the person making such bets. It has no bearing for MMS, and MMS is most definitely a bet on the election no more.




Definately a good argument about the betting odds. The only point I was trying to make is the fact that up until yesterday the betting odds and MMS price had been following each other very closely showing that the public opinion of ALP winning was reflected in MMS pricing very directly and closely. I agree that the movements in the odds has no significant bearing itself, its just showing that investors have fully priced the election results in by now.

Will be eagerly waiting the report as I think this will now have the most significant impact in the near future on the SP.


----------



## ROE (27 August 2013)

http://www.afr.com/p/national/mcmillan_shakespeare_buy_pays_off_FN1Qh0w2HJnACMQ1bNpNTN

fund manager did a bit of trading on the side
bought in at $8 sold at $12


----------



## SeekingYields (2 September 2013)

I'm still torn as to what to do as we lead up to polling day. As aforementioned it is fair to say the increase in MMS since the changes to FBT by Labor has factored in that the Coalition will come to power and more than likely abolish Rudd's changes. 

Average entry of $9.03 and now as of today closed at $11.98. I'm getting itching fingers to hit the sell button


----------



## db94 (2 September 2013)

SeekingYields said:


> I'm still torn as to what to do as we lead up to polling day. As aforementioned it is fair to say the increase in MMS since the changes to FBT by Labor has factored in that the Coalition will come to power and more than likely abolish Rudd's changes.
> 
> Average entry of $9.03 and now as of today closed at $11.98. I'm getting itching fingers to hit the sell button




I cant see any real harm holding till after election date. No doubt the election result has been factored in however it may jump a few percent when the Coalition are sworn in, you never know. Unfortunately the damage has been done and it may never get back to its highs.


----------



## ROE (2 September 2013)

db94 said:


> I cant see any real harm holding till after election date. No doubt the election result has been factored in however it may jump a few percent when the Coalition are sworn in, you never know. Unfortunately the damage has been done and it may never get back to its highs.




or you will find out what they will do this Thursday if they release enough details of what cut and saving they have coming for us all 

- - - Updated - - -



SeekingYields said:


> Average entry of $9.03 and now as of today closed at $11.98. I'm getting itching fingers to hit the sell button




Selling is always the hardest  .. I wish you well with your decision


----------



## db94 (2 September 2013)

ROE said:


> or you will find out what they will do this Thursday if they release enough details of what cut and saving they have coming for us all




One of the reasons I got out of MMS was because I was starting to get worried how the Coalition were fund all these ideas and whether they would do anything like a FBT. Whilst they have slammed Rudd for it, politicians have a knack for back-flips. Too much risk for me  All the best to those who are still holding


----------



## tinhat (2 September 2013)

SeekingYields said:


> I'm still torn as to what to do as we lead up to polling day. As aforementioned it is fair to say the increase in MMS since the changes to FBT by Labor has factored in that the Coalition will come to power and more than likely abolish Rudd's changes.
> 
> Average entry of $9.03 and now as of today closed at $11.98. I'm getting itching fingers to hit the sell button




An interesting thing to be gambling on. It's not so much about who is going to win the election but about what makes you think the coalition is going to not keep the reforms. I would be more inclined to think that they will rely on savings that have already been locked in by decisions of the current government.

Believing that a government is going to be able to increase spending and decrease taxes (and improve its fiscal balance sheet) is a bit far don't you think?


----------



## FxTrader (3 September 2013)

db94 said:


> One of the reasons I got out of MMS was because I was starting to get worried how the Coalition were fund all these ideas and whether they would do anything like a FBT. Whilst they have slammed Rudd for it, politicians have a knack for back-flips. Too much risk for me  All the best to those who are still holding




All investing carries some risk, even bank deposits as the Cypriots discovered to their horror.  Investing in MMS should be an investment based on probability (measured risk), this is distinctly different from gambling.  Your reasons for exit are based on a highly improbable outcome in my view.  We shall see what the market reaction to a Coalition victory means for MMS next Monday.  I suspect it will be a very positive one.


----------



## twojacks28 (3 September 2013)

I agree. I'm still holding and will be until the Coalition win on the weekend. I'm banking on MMS putting out a statement after the election result is known reinstating the dividend and saying that things are all good.


----------



## Hodgie (3 September 2013)

FxTrader said:


> All investing carries some risk, even bank deposits as the Cypriots discovered to their horror.  Investing in MMS should be an investment based on probability (measured risk), this is distinctly different from gambling.  Your reasons for exit are based on a highly improbable outcome in my view.  We shall see what the market reaction to a Coalition victory means for MMS next Monday.  I suspect it will be a very positive one.




I dont think the Coalition being sworn in will have that significant an impact on the market. The outcome is already expected.

_ONLINE bookmaker sportsbet.com.au has declared next Saturday's federal election a one-horse race, and has paid out all bets on the Coalition - nine days before Australia goes to the polls.
So confident of a landslide victory is Sportsbet,it has paid out more than $1.5 million in bets to its members - with the early payout being a first in Australian federal election history.
"As far as Sportsbet's betting markets are concerned, the Abbotts can start packing up their belongings ahead of their imminent move to Kirribilli House," sportsbet.com.au's Haydn Lane said.
"The Coalition are now into Black Caviar-like odds to win the election."_


We really need to hear more from MMS themselves instead of speculating the outlook for the company moving forward. They are playing it close to the chest it seems until uncertainty about the future is removed for them in their own eyes.


----------



## skyQuake (3 September 2013)

Hodgie said:


> I dont think the Coalition being sworn in will have that significant an impact on the market. The outcome is already expected.
> 
> _ONLINE bookmaker sportsbet.com.au has declared next Saturday's federal election a one-horse race, and has paid out all bets on the Coalition - nine days before Australia goes to the polls.
> So confident of a landslide victory is Sportsbet,it has paid out more than $1.5 million in bets to its members - with the early payout being a first in Australian federal election history.
> ...




+1

If no fading this week, any upmove right after the election will be heavily faded imo


----------



## FxTrader (3 September 2013)

Hodgie said:


> I dont think the Coalition being sworn in will have that significant an impact on the market. The outcome is already expected.



We shall see on Monday just how priced in a Coalition victory is for the MMS share price.



> We really need to hear more from MMS themselves instead of speculating the outlook for the company moving forward. They are playing it close to the chest it seems until uncertainty about the future is removed for them in their own eyes.




MMS has clearly stated what they can pre-election...
_"The Labor Government’s surprise announcement on FBT on motor vehicles is having an adverse affect on our business, at least in the short term.  If the Coalition wins the election, it would appear from their policy statements, we should be able to move back to business as usual."_

And Tony Abbott today in his open letter to the car industry has confirmed this outcome...
_"ASPIA has noted the Open Letter to the Car Industry from Tony Abbott and Joe Hockey confirms they will "not proceed with the Labor Government's poorly thought through changes  to Fringe Benefits Tax arrangements on cars." In the event the Coalition is elected on 7 September, we encourage all stakeholders, including employers and employees engaged in salary sacrifice programs, to urgently and immediately return to normal trading activity in order to repair the damage done by this ill-considered Labor announcement"_


----------



## craft (3 September 2013)




----------



## twojacks28 (4 September 2013)

Currently $12.55 you beauty. 

MMS has already said they will make no announcement until the election result is known.


----------



## FxTrader (4 September 2013)

twojacks28 said:


> Currently $12.55 you beauty.
> 
> MMS has already said they will make no announcement until the election result is known.




MMS finished up $1.03 (8.5%) on the day.  The market is only now fully pricing in a Coalition victory with some headroom left IMO.  I would not be surprised to see the price settle in between $14-15 on Monday.


----------



## skyQuake (4 September 2013)

FxTrader said:


> MMS finished up $1.03 (8.5%) on the day.  The market is only now fully pricing in a Coalition victory with some headroom left IMO.  I would not be surprised to see the price settle in between $14-15 on Monday.




Personally would be very happy to fade a large gap up Monday.

Sold out all my stock today too. Been a great ride... even if i hopped off the middle for a while


----------



## twojacks28 (4 September 2013)

FxTrader said:


> MMS finished up $1.03 (8.5%) on the day.  The market is only now fully pricing in a Coalition victory with some headroom left IMO.  I would not be surprised to see the price settle in between $14-15 on Monday.




I'm thinking the same range. Somewhere between $14-15. I will sell out a few days after election once it has got through to all markets.


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## SeekingYields (4 September 2013)

Extremely pleased with Coalitions letter released yesterday and the subsequent effects to the share price today.


----------



## Tyler Durden (6 September 2013)

Looks like we're going into the ring at $13.40.


----------



## db94 (6 September 2013)

If the coalition get voted in, I'd expect there to be a bit of hype in MMS for the first few days, pushing it a bit higher; IMO around $14.50-15. Soon after, it'll slow down and possibly come down a bit as people exit. Cant really see it returning to $18 but who knows


----------



## Tyler Durden (7 September 2013)

db94 said:


> If the coalition get voted in, I'd expect there to be a bit of hype in MMS for the first few days, pushing it a bit higher; IMO around $14.50-15. Soon after, it'll slow down and possibly come down a bit as people exit. Cant really see it returning to $18 but who knows




Those are my thoughts too. I'm betting on the hype of the first couple of days, so will sell then, because I don't see it coming back to $18 anytime soon.


----------



## Tyler Durden (7 September 2013)

Abbott won.

Now, we all know the market can do crazy things...so what if the SP actually goes down on the news?!


----------



## galumay (8 September 2013)

Tyler Durden said:


> Abbott won.
> 
> Now, we all know the market can do crazy things...so what if the SP actually goes down on the news?!




It wouldn't surprise me, the market had already priced in the win by Abbott, it may drift lower until MMS announce about the dividend and that could potentially see a big fall in share price again.


----------



## FxTrader (8 September 2013)

galumay said:


> It wouldn't surprise me, the market had already priced in the win by Abbott, it may drift lower until MMS announce about the dividend and that could potentially see a big fall in share price again.




I seriously doubt the MMS share price (previously trading on a 4% yield the last two years) is going to tank because of a lower divided (I would prefer they pay no dividend given their ROE).  When the share price recovers to around $15 then I would expect a drift from there until we get clarity of trading results from MMS for the next quarter.  MMS is now in a stronger trading position due to weaker rivals likely to lose market share to MMS.  If by some miracle the share price did drift lower in the short term I will be adding to my position - MMS is simply a great business.


----------



## notting (8 September 2013)

The business has been exposed as highly dependent on a stream of income that is out of it's control.
MMS will also have been treading water and slipping with respect to existing business with the uncertainty.
It's potential clients will have implemented alternative strategies and found different ways of doing things in the light of the legislation risk.  So the potential for MMS to have slowed and altered the short term is real even with no change to the legislation.
It will be hard to see this company being seen as such a great business, now it is clearly exposed to be living the easy life off the government, off us actually.

The liberals should taper this policy not kill it as the idiot tried to do.

The short term risk is probably more of a drift to the upside.
Longer term - speculative.


----------



## FxTrader (8 September 2013)

notting said:


> The business has been exposed as highly dependent on a stream of income that is out of it's control.



The business model was never hidden, it was no secret that salary packaging was the mainstay of the business.  The legislative risk was there and remains but it's hard to imagine any future Labor or Liberal government revisiting the FBT treatment for salary packaged vehicles for many years to come. 



> It's potential clients will have implemented alternative strategies and found different ways of doing things in the light of the legislation risk.  So the potential for MMS to have slowed and altered the short term is real even with no change to the legislation.



Getting and retaining clients won't be an issue for MMS, there is no reason to not continue with business as usual for salary packaging arrangements.



> It will be hard to see this company being seen as such a great business, now it is clearly exposed to be living the easy life off the government, off us actually.



Nonsense, the reason MMS was trading at a premium price pre-announcement was the excellent underlying fundamentals of their financials and future prospects.  



> The liberals should taper this policy not kill it as the idiot tried to do.



The Libs won't touch FBT policy and have said so quite emphatically.


----------



## twojacks28 (8 September 2013)

FxTrader said:


> The business model was never hidden, it was no secret that salary packaging was the mainstay of the business.  The legislative risk was there and remains but it's hard to imagine any future Labor or Liberal government revisiting the FBT treatment for salary packaged vehicles for many years to come.
> 
> 
> Getting and retaining clients won't be an issue for MMS, there is no reason to not continue with business as usual for salary packaging arrangements.
> ...




Correct weight. Will be up tomorrow marching towards $14-15.


----------



## notting (8 September 2013)

FxTrader said:


> The business model was never hidden, it was no secret that salary packaging was the mainstay of the business.




No one said the business model was hidden.  What was not in the forefront of peoples minds was the dependency on government rebates which the company has no control over.
But yeah I think what you said well and truly makes it a risk worth sticking with for the moment.
Well put.


----------



## galumay (8 September 2013)

notting said:


> No one said the business model was hidden.




I think that FxTrader was responding to this comment, 



notting said:


> The business has been *exposed* as highly dependent on a stream of income that is out of it's control.


----------



## skyQuake (9 September 2013)

Buy the rumour, fade the news...


----------



## db94 (9 September 2013)

skyQuake said:


> Buy the rumour, fade the news...




I deadset came on here to post the same thing! 

It was looking good for the first 5-10 minutes then took a dive

Unfortunately I fell for the trap :frown:

EDIT: it looks like its clawing its way back


----------



## galumay (9 September 2013)

I hate to say I told you so,....but...


----------



## Hodgie (9 September 2013)

Landslide victory...... as expected.


----------



## craft (9 September 2013)

galumay said:


> I hate to say I told you so,....but...




I wouldn’t read too much into near term price action.

How many shares would long term believers in MMS want to accumulate today (especially in light of the recent opportunities to accumulate)

How many people with no idea (or mere opinions) about MMS will be wanting to cash in their election bets?


Perceived FBT tail risks heightened in markets eyes – but I would argue that the whole episode has actual lowered risk especially in light of the open letter from Abbott and Hockey and labors failure to prosecute the removal.

Competitive advantage improved.

MMS is more than just a company on the FBT teat.  Management have a substantial amount of their wealth in the business and I bet they are motivated even more now to continue diversifying the business. BUT they needn’t and shouldn’t throw away novated leasing business while the opportunity exists just because it carries tail risk.  It’s not as though it requires much capital to maintain it. 

Awaiting company update. What’s the short term damage been? – how much catch up is taking place? I reckon a record number leases will be written today and MMS has the work force still in place to deal with it.


----------



## ROE (9 September 2013)

http://www.afr.com/p/national/salary_packaging_industry_cautious_C8iVv0EGREb1BQveXdu4DK


----------



## galumay (9 September 2013)

craft said:


> I wouldn’t read too much into near term price action.




I wasn't, my point was that I thought it likely the price would settle post election. I agree with everything else in your post and thats why I continue to hold. Depending on the outcome of their next announcement I may well move them from my speccy portfolio into my long term investment one.


----------



## FxTrader (9 September 2013)

craft said:


> How many shares would long term believers in MMS want to accumulate today (especially in light of the recent opportunities to accumulate) How many people with no idea (or mere opinions) about MMS will be wanting to cash in their election bets?




Yes, interesting sell down today as the election speculators bail on MMS.  Why would you sell today instead of pre-election?  Perhaps the lack of a pop in the share price has caused an exodus to lock in profit.  Whatever the psychology, another buying opportunity for the value investor beckons.


----------



## notting (9 September 2013)

FxTrader said:


> Yes, interesting sell down today as the election speculators bail on MMS.  Why would you sell today instead of pre-election?  Perhaps the lack of a pop in the share price has caused an exodus to lock in profit.  Whatever the psychology, another buying opportunity for the value investor beckons.






Tend to agree, I sold pre and I'm buying the close.  It's usually good to buy against what is implied in the Fin Review.
The car industry had a good month despite the self deluded fools attempt to feel what it was like to make a policy announcement.


----------



## Tyler Durden (9 September 2013)

FxTrader said:


> Why would you sell today instead of pre-election?




My thoughts exactly. I wonder why those who sold today did so instead of on Friday?

I was expecting it to reach $14-15 today, and I knew I should've sold immediately when it opened below $14. Made a bit of a loss but oh well


----------



## db94 (9 September 2013)

Tyler Durden said:


> My thoughts exactly. I wonder why those who sold today did so instead of on Friday?
> 
> I was expecting it to reach $14-15 today, and I knew I should've sold immediately when it opened below $14. Made a bit of a loss but oh well




did you get out? I think although I got smashed today, Ill be holding for a few weeks and seeing what happens. I hope I'm right


----------



## FxTrader (9 September 2013)

db94 said:


> did you get out? I think although I got smashed today, Ill be holding for a few weeks and seeing what happens. I hope I'm right




Personally, I am unconcerned and bought more MMS at the close.  When you have conservative value investing firms valuing MMS at $13.80 (worst case) and above, where such valuations tend to be well below what the market is willing to pay for stocks of quality of an MMS, then you have to ask yourself if holding MMS longer term will likely reward you.  Also ask yourself, if 6 months from now MMS financials return to what they were pre-announcement of FBT changes (quite a likely outcome IMO), what would the market be willing to pay for MMS given recent price history.  

If one's reason for buying into MMS was to flip it for maximum short term profit then the time for doing that has well and truly passed.


----------



## Tyler Durden (9 September 2013)

db94 said:


> did you get out? I think although I got smashed today, Ill be holding for a few weeks and seeing what happens. I hope I'm right




Bought in at $13.67 on Friday. You'd think that'd be safe given the election results.

But nope, got out at $12.90 

I think long term there is a good chance I could've made a gain, but this was purely for short term gain purposes.


----------



## notting (10 September 2013)

Technically the 14 level is a bit of resistance and is also spot on the 61.8% retracement back up from the fall off the peak.  So Traders will have been cognisant of that.
Yet the volume on the last two days of selling was very low.
Weak hands.
If it breaks the 50% retracement with attitude that would be a good point (12.50 ish) to stop and sit back.
Unlikely however given the lack of volume in the selling.
It also bounced off that 50% level pretty hard in early trade yesterday.


----------



## db94 (10 September 2013)

welp I'm stuck between a rock and a hard place. Yesterday getting smashed and today not looking too good so far. Perhaps people are still selling off from the their election bets? May have to hold on to this for a while to get back to what I bought it at.


----------



## craft (10 September 2013)

db94 said:


> welp I'm stuck between a rock and a hard place. Yesterday getting smashed and today not looking too good so far. Perhaps people are still selling off from the their election bets? May have to hold on to this for a while to get back to what I bought it at.




Db94. Your posts are hard to read.....I don’t mean literally.

Get a plan, any plan, even a wrong plan so you at least have a consistent base line to learn from would serve you better then blowing in the wind.


----------



## db94 (10 September 2013)

craft said:


> Db94. Your posts are hard to read.....I don’t mean literally.
> 
> Get a plan, any plan, even a wrong plan so you at least have a consistent base line to learn from would serve you better then blowing in the wind.




Thanks for the feedback 
I did have some of a plan but I ignored it (cut loss at 5%); lesson learned to say the least.


----------



## tech/a (10 September 2013)

db94 said:


> Thanks for the feedback
> I did have some of a plan but I ignored it (cut loss at 5%); lesson learned to say the least.




Trailing stop of 5% is fine.

*But *wouldn't it be handy to be able to recognise
supply and lack of demand so you can be pretty sure your 
seeing a reversal rather than a corrective move in an up trend?

*What will you do if *price rises to your pre determined 5%
stop level?
Sell out or Hold?


----------



## twojacks28 (10 September 2013)

So much panic selling. Nothing has changed. I'll be holding a little while longer now. 

They're announcing annual results tomorrow morning.


----------



## doof69 (10 September 2013)

twojacks28 said:


> They're announcing annual results tomorrow morning.




Yeah so much panic. I must admit I did not expect this. Divy is up soon too isn't it???


----------



## VSntchr (10 September 2013)

twojacks28 said:


> So much panic selling. Nothing has changed. I'll be holding a little while longer now.
> 
> They're announcing annual results tomorrow morning.




If you take a look at the 3 yr chart how would you explain the rise up to $18, the fall to $8 and the subsequent rise to $13....what changed in each of these circumstances? If you need an explanation of change for every couple of dollars of movement you get yourself into a tricky game.... 

If the price had just steadily risen from $2 to $13 over the last x amount of years, rather than overshoot and overcorrect - would you still be thinking that $13 is cheap? or would you look at the chart going exponentially from the bottom left to the top right corner and think it was expensive....

P.S the above post is theoretical in nature and in no way conveys my thoughts on the value of MMS.


----------



## tech/a (10 September 2013)

twojacks28 said:


> So much panic selling. Nothing has changed. I'll be holding a little while longer now.
> 
> They're announcing annual results tomorrow morning.






doof69 said:


> Yeah so much panic. I must admit I did not expect this. Divy is up soon too isn't it???




So price is falling which is not in line with your expectations so you label it panic selling?
*What's the panic about??*
Could it be that the figures aren't expected to be favourable?

Why has nothing changed?
Clearly something has changed---sentiment!


----------



## skc (10 September 2013)

twojacks28 said:


> So much panic selling. Nothing has changed. I'll be holding a little while longer now.
> 
> They're announcing annual results tomorrow morning.




The price went from $6.50 to $14 so a $2 retracement is hardly panic selling.

Annual results have already been announced. They are having a conference call to discuss the results. But the truth is no one cares about the past result... every wants to know the level of damage incurred in the last few months, and how are the novated lease enquiries recovering this week.



doof69 said:


> Yeah so much panic. I must admit I did not expect this. Divy is up soon too isn't it???




They have already announced that there is no final dividend for FY13.


----------



## tech/a (10 September 2013)

> The price went from $6.50 to $14 so a $2 retracement is hardly panic selling.




I guess it is if you bought at close to $14!


----------



## peter2 (10 September 2013)

It would have been nice for price to "fill the gap" but it looks like it's not ready. 

After the panic low there is a nice symmetrical 5-wave swing that seems to have terminated in the expected 50-62% retracement zone of the prior panic move down. That's two observations that indicate this move up may have paused. Indications were visible in the chart to tighten your trailing sell exit and protect profits. 

I hope that this chart encourages short term gamblers to learn a little about market structure in order to plan their trades with known risk and probable rewards.


----------



## galumay (10 September 2013)

peter2 said:


> I hope that this chart encourages short term gamblers to learn a little about market structure in order to plan their trades with known risk and probable rewards.




I dont use charts and am not a technical analysist so it means nothing to me, but I would suggest that those that think it was a good move to buy just before the election at around $13 are perhaps unlikely to learn from charts or anything else!

Given that the price had already recovered over 50% from the mis pricing by the market of $7-$8 its hard to imagine there was much upside from an election that had a virtually pre-detirmined result.


----------



## db94 (10 September 2013)

tech/a said:


> Trailing stop of 5% is fine.
> 
> *But *wouldn't it be handy to be able to recognise
> supply and lack of demand so you can be pretty sure your
> ...




This is why I like to watch during the day to see how the stock is going. I guess, IMO, it'd depend on the situation on what I'd do. I'd look for support and resistance on the charts and on the DOM ladder. Then make a decision.

In hindsight it was a bad idea and a tough lesson learned. I've got a trading plan from another forum and will work through that. I guess this is all a part of being a beginner. 

Back on MMS, the presentation has been released (http://www.asx.com.au/asxpdf/20130910/pdf/42j8phqhvfgwr0.pdf) on the FY13 results. Fair of uncertainty conveyed in report


----------



## VSntchr (10 September 2013)

A little bit of scuttlebutt - I have some colleagues who were about to sign up for novated leases just prior to the announcement.
Since the coalition victory over the weekend they have told me that SG Fleet has been all over them like a rash to get things going - all systems go. The only thing lagging is the re-acceptance of the employer.


----------



## FxTrader (11 September 2013)

db94 said:


> Back on MMS, the presentation has been released (http://www.asx.com.au/asxpdf/20130910/pdf/42j8phqhvfgwr0.pdf) on the FY13 results. Fair of uncertainty conveyed in report




Actually the market is responding to the report quite favourably.  I find it mildly amusing that chartists are weighing in here suggesting that the recent pullback was in any way predictable based on chart patterns.  The psychology and momentum of the recent sell down was most likely the herd mentality of pre-election speculators dumping their MMS position for fear their profits were evaporating.  Given the lack of any clear guidance from MMS, this stock could drift sideways in a range for months and trying to chart trade it futile at best.  Updates on trading results from MMS will drive the price from here.


----------



## tech/a (11 September 2013)

> I find it mildly amusing that chartists are weighing in here suggesting that the recent pullback was in any way predictable based on chart patterns



.



> But wouldn't it be handy to be able to recognise
> supply and lack of demand so you can be pretty sure your
> seeing a reversal rather than a corrective move in an up trend?




More anticipation than prediction. Difference being is there is no start or end point.
Only an anticipation of price action going forward. Made possible by reading the chart---more Volume and range and background than a "Pattern"

EG
I anticipate a test of the recent high. Price range and volume during this test will determine further anticipation of price.

Hence the question.



> What will you do if price rises to your pre determined 5%
> stop level?
> Sell out or Hold?




Without an answer to this your basically buy and holding. As you have pointed out MMS could do nothing for months.
Is holding this position for months sound investment practice---albeit it in "Anticipation "of a positive announcement.


----------



## FxTrader (11 September 2013)

tech/a said:


> What will you do if price rises to your predetermined 5% stop level? Sell out or Hold?  Without an answer to this your basically buy and holding. As you have pointed out MMS could do nothing for months.




With respect to equities I consider myself a value investor.  Hence my primary concern is business performance over time.  The only time I sell is when the market wants to pay me a large premium price (at least +20% over valuation) or business fundamentals are declining with little prospect of improvement in the near term.

I don't trade equities on technicals because the leverage stinks.  If I have a technical strat that creates positive expectancy then I trade it on the Forex spot market at 500:1 leverage.  Equity options are an alternative but offer much lower leverage and required liquidity is only available on a small number of ETOs.




> Is holding this position for months sound investment practice---albeit it in "Anticipation "of a positive announcement.



With respect to anticipation, one must consider what Mr. Market will pay for MMS if BAU returns in the next quarter.  Since the probability of such an outcome is high, my expectancy is based more on probability than "anticipation".  Time will tell if the decision to hold at this time was "sound".


----------



## tech/a (11 September 2013)

My questions were/are generic more than poster specific.
Thanks for your reply though.


----------



## Trembling Hand (11 September 2013)

FxTrader said:


> I don't trade equities on technicals because the leverage stinks.  If I have a technical strat that creates positive expectancy then I trade it on the Forex spot market at 500:1 leverage.  Equity options are an alternative but offer much lower leverage and required liquidity is only available on a small number of ETOs.




I would be very interested to see any stats for a system that can survive 500:1 leverage.


----------



## db94 (11 September 2013)

FxTrader said:


> Actually the market is responding to the report quite favourably.  I find it mildly amusing that chartists are weighing in here suggesting that the recent pullback was in any way predictable based on chart patterns.  The psychology and momentum of the recent sell down was *most likely the herd mentality of pre-election speculators dumping their MMS position for fear their profits were evaporating.*  Given the lack of any clear guidance from MMS, this stock could drift sideways in a range for months and trying to chart trade it futile at best.  Updates on trading results from MMS will drive the price from here.




This was why I decided to hold my position and not sell yesterday; needless to say though, I didn't get much sleep last night lol. The joys of being a rookie. Listening to the presentation this morning it sounds like the AGM will be very very important - giving more guidance as to the damage done and outlook into the future.


----------



## skc (11 September 2013)

Trembling Hand said:


> I would be very interested to see any stats for a system that can survive 500:1 leverage.




The same as your stats, x500.


----------



## galumay (11 September 2013)

db94 said:


> This was why I decided to hold my position and not sell yesterday; needless to say though, I didn't get much sleep last night lol. The joys of being a rookie. Listening to the presentation this morning it sounds like the AGM will be very very important - giving more guidance as to the damage done and outlook into the future.




Not sure there will be much more information in the AGM, the main purpose of the AGM is to present the past financial year's results. 

I will not be surprised if there is little meaningful news until the half yearly results at the start of next year, by then the real impact will be reflected in the results and we should also be able to gauge the extent of the recovery.


----------



## skc (11 September 2013)

galumay said:


> Not sure there will be much more information in the AGM, the main purpose of the AGM is to present the past financial year's results.
> 
> I will not be surprised if there is little meaningful news until the half yearly results at the start of next year, by then the real impact will be reflected in the results and we should also be able to gauge the extent of the recovery.




Read the announcement. It said there will be an update at AGM.

Market updates at AGM make great trading opportunities for many stocks...


----------



## tech/a (11 September 2013)

db94 said:


> This was why I decided to hold my position and not sell yesterday; needless to say though, I didn't get much sleep last night lol. The joys of being a rookie. Listening to the presentation this morning it sounds like the AGM will be very very important - giving more guidance as to the damage done and outlook into the future.




When this turns back around in a day or two
What's your plan?
Will this be renewed panic selling?


----------



## craft (11 September 2013)

db94 said:


> This was why I decided to hold my position and not sell yesterday; needless to say though, I didn't get much sleep last night lol. The joys of being a rookie. Listening to the presentation this morning it sounds like the AGM will be very very important - giving more guidance as to the damage done and outlook into the future.




Lets not destroy a stock thread here guys.

DB94 – Information flow does not suit what I think is your time frame.

Peter2,s post below is a more risk controlled approach unless you are prepared for long time frames and large price movements.


----------



## galumay (11 September 2013)

skc said:


> Read the announcement. It said there will be an update at AGM.




I know what the announcement said, I was expressing my opinion about what will actually revealed and when, sorry if it wasnt clear I was presenting my point of view.


----------



## tech/a (11 September 2013)

> Lets not destroy a stock thread here guys.




Let me get this right then

Any discussion which isn't directly related to the Fundamentals of the stock are considered off the rails and could destroy the "'Stock" Thread?

So speculation as to the reason why it fell--rises--stays steady
--Any chart reading insight
--Any questioning of peoples methodology
could be construed as damaging?


----------



## craft (11 September 2013)

tech/a said:


> Let me get this right then
> 
> Any discussion which isn't directly related to the Fundamentals of the stock are considered off the rails and could destroy the "'Stock" Thread?
> 
> ...




No not at all.

What I meant was keep it nice.

Might help if everybody does a double take on the assumptions they read into other peoples posts before firing back a defence/retaliation.

I'm suggesting harmony not uniformity.


----------



## notting (11 September 2013)

I think suggesting someone has a plan is as nice as you can get.
I'd be planning to go short/sell with a stop around 14.


----------



## skc (11 September 2013)

galumay said:


> Not sure there will be much more information in the AGM, the main purpose of the AGM is to present the past financial year's results.






galumay said:


> I know what the announcement said, I was expressing my opinion about what will actually revealed and when, sorry if it wasnt clear I was presenting my point of view.




I just wanted to make sure you read the line about further update at AGM - it was hiding at the end of slide 23.


----------



## galumay (12 September 2013)

skc said:


> I just wanted to make sure you read the line about further update at AGM - it was hiding at the end of slide 23.




Thanks, I had read it. I remain skeptical about the likelihood of there being any meaningful information to present in such a short time. As I said I reckon it will be the half yearly report before we see much real guidance.


----------



## craft (12 September 2013)

galumay said:


> Thanks, I had read it. I remain skeptical about the likelihood of there being any meaningful information to present in such a short time. As I said I reckon it will be the half yearly report before we see much real guidance.




If they don’t say anything – that will say a lot.

In the phone hook up indication was given that the final dividend would be considered at the next board meeting now the election is out of the way and I suspect announced at the AGM also if they decide to pay one – Action on cash also talks loud.

We know (and they know) we are going to get numbers on paper at the half yearly. Doubt that we will be in total suspense as to what they are going to be by the time they are delivered.

It may be that customer confidence in novated leases has to be rebuilt or it may be there is pent up demand from over the period in which case revenue catch up will be much easier. We already know expenses haven’t been trimmed much  – they even paid average commission over the nil revenue time.  So people should be expecting revenue shortfall to flow straight to the bottom line. Whether there is 8-9-10-11 months of trend revenue in the FY14 year is really quite insignificant to a long term holder, the reason is known and one off.  Shorter term holders may be less relaxed about the outcome. 
 How FY15 is shaping up against the long term trend is more important – Has the legislative uncertainty impacted permanently their customer buying decisions and hence the revenue stream?  

My perspective is that a de-rating of the earnings multiple because of legislative risk being at the forefront of people’s mind is a good thing. But if revenue is impacted long term by the uncertainty – that’s a whole different ball game.  I suspect uncertainty actually plays out as employees being keener to stitch up the benefits for fear of missing out, however there may be more reluctance on the part of employers to go to the trouble of putting salary sacrifice programs in place because of the uncertainty.


----------



## FxTrader (12 September 2013)

craft said:


> My perspective is that a de-rating of the earnings multiple because of legislative risk being at the forefront of people’s mind is a good thing. But if revenue is impacted long term by the uncertainty – that’s a whole different ball game.  I suspect uncertainty actually plays out as employees being keener to stitch up the benefits for fear of missing out, however there may be more reluctance on the part of employers to go to the trouble of putting salary sacrifice programs in place because of the uncertainty.




The MMS report did indicate the following _"Employers who have shut programs down (*minority but some large companies*) need to agree to restart"_

I would imagine, given how popular such packaging has been with employees in the past, that there would be considerable pressure applied to once again offer this packing option for the "minority" of employers who have removed vehicle lease salary packaging.  The "uncertainty" factor around the legislation seems misplaced with the probablility of a 2 term Liberal government high - that's 6 years of certainty IMO.


----------



## tech/a (12 September 2013)

notting said:


> I think suggesting someone has a plan is as nice as you can get.
> I'd be planning to go short/sell with a stop around 14.




One clear plan.



craft said:


> If they don’t say anything – that will say a lot.
> 
> In the phone hook up indication was given that the final dividend would be considered at the next board meeting now the election is out of the way and I suspect announced at the AGM also if they decide to pay one – Action on cash also talks loud.
> 
> ...




Much discussion.
So from your view point would you 
(1) Hold if you had bought at $13 and above?
(2) Sell and look for a re entry at a better price?
(3) Buy more on any pull back?
(4) Sell and look for a better prospect.
(5) Other.---What?



FxTrader said:


> The MMS report did indicate the following _"Employers who have shut programs down (*minority but some large companies*) need to agree to restart"_
> 
> I would imagine, given how popular such packaging has been with employees in the past, that there would be considerable pressure applied to once again offer this packing option for the "minority" of employers who have removed vehicle lease salary packaging.  The "uncertainty" factor around the legislation seems misplaced with the probablility of a 2 term Liberal government high - that's 6 years of certainty IMO.




Much discussion.
So from your view point would you 
(1) Hold if you had bought at $13 and above?
(2) Sell and look for a re entry at a better price?
(3) Buy more on any pull back?
(4) Sell and look for a better prospect.
(5) Other.---What?


----------



## FxTrader (12 September 2013)

tech/a said:


> Much discussion.
> So from your view point would you...




(1) Hold if you had bought at $13 and above?
_Only if one planned to hold at least 6 months.  This really depends on why the stock was purchased to begin with._

(2) Sell and look for a re entry at a better price?
_If you purchased MMS to flip it for a quick profit, that opportunity is gone.  If sitting on a large profit, the prospects look very encouraging, hold.  Expecting sideways drift from here until another trading update from MMS at the AGM. _

(3) Buy more on any pull back?
_Depends on magnitude.  Oversold is anything under $11 IMO._

(4) Sell and look for a better prospect.
_And what would that be?_

(5) Other.---What?_
MMS is no longer a short term trading opportunity except perhaps after a large pullback._


----------



## tech/a (12 September 2013)

FxTrader said:


> (1) Hold if you had bought at $13 and above?
> _Only if one planned to hold at least 6 months.  This really depends on why the stock was purchased to begin with._
> 
> (2) Sell and look for a re entry at a better price?
> ...




Thanks
Makes sense.


----------



## galumay (12 September 2013)

tech/a said:


> One clear plan.
> Much discussion.
> So from your view point would you
> (1) Hold if you had bought at $13 and above?
> ...




I concur with what Craft said about MMS, my plan is clear, I bought at under $9 as a spec bet on the election, the pre election recovery was so strong, the commitment that came from the Libs so strong, and then the election result has meant I have reframed the entry as a long term investment hold and 'moved' MMS from my spec portfolio into my investment one.

1) N/R I would not have bought above $13
2) No happy with my entry
3) Unlikely, it needs very compelling circumstances for me to consider averaging down.
4) One of my key assessments for holding a share, I ask myself "can the money be put to better use somewhere else" Currently the answer is I can't find a better home for the money invested.
5) Reassess after AGM, Half Yearly Report & after holding for 12 months.


----------



## tech/a (12 September 2013)

To Buy at under $9 you'd have had to have bought it before Gillard announced the election date.


----------



## craft (12 September 2013)

tech/a said:


> Much discussion.
> So from your view point would you
> (1) Hold if you had bought at $13 and above?



N/A


craft said:


> As background - my last purchase was 1/10/08 average holding cost is low $2. It has repaid itself and more in dividends and I have sold some down at higher prices because of portfolio diversity rules.




above $13 for me would only be a trading entry and I haven’t discussed any of my trading in MMS here and won’t because of the existence of some who are self proclaimed guru’s that I have no respect for, not to mention differing experience on what works. 



tech/a said:


> (2) Sell and look for a re entry at a better price?



Not the Investment holding – did put in place arrangements to hedge if necessary. Only utilised in in separate account to facilitate short trades Never finished up hedging in account where MMS investment sits.    



tech/a said:


> (3) Buy more on any pull back?



Yep if the price is right and fits within portfolio exposure rules.




tech/a said:


> (4) Sell and look for a better prospect.



Always evaluating that as an opportunity.



tech/a said:


> (5) Other.---What?




Other. Spend a large amount of time naval gazing about living with tail risk in an overall investment portfolio context.


----------



## McCoy Pauley (12 September 2013)

tech/a said:


> To Buy at under $9 you'd have had to have bought it before Gillard announced the election date.




I would have thought you meant Rudd, given it was Bowen as treasurer who announced the proposed changes to FBT laws with Rudd as the PM in late July.


----------



## galumay (12 September 2013)

tech/a said:


> To Buy at under $9 you'd have had to have bought it before Gillard announced the election date.




No, Rudd was already PM by then, it may have been before he announced the actual date, but we knew it was coming.
I bought on the 30th of July at $8.85


----------



## odds-on (12 September 2013)

craft said:


> above $13 for me would only be a trading entry and I haven’t discussed any of my trading in MMS here and won’t because of the existence of some who are self proclaimed guru’s that I have no respect for, not to mention differing experience on what works.





Hi Craft,

If you ever feel the inclination, I (and maybe others) would appreciate you starting a thread on your trading methods. It would be interesting reading, just like finding out the long-term investment strategies of the day traders on ASF (I definitely would like to read Trembling Hand's guide to Strategic Asset Allocation).

No worries, if you are not interested.

Cheers


----------



## doof69 (13 September 2013)

NAB sold a chunk of shares. What could this mean for the share price


----------



## db94 (14 September 2013)

Good news. According to this, car leasing companies have started re-hiring after firing staff when Rudd announced the FBT tax proposal. http://www.theaustralian.com.au/nat...-lease-companies/story-fn59niix-1226718891627


----------



## db94 (18 September 2013)

been pretty much all down hill since the election and presentation of annual results. Perhaps it was over bid? or investors arent liking the uncertainty regarding the future of MMS


----------



## tech/a (18 September 2013)

Notting

Best plan around


----------



## ROE (18 September 2013)

db94 said:


> been pretty much all down hill since the election and presentation of annual results. Perhaps it was over bid? or investors arent liking the uncertainty regarding the future of MMS




EPS 84c? you paying for a grow stock at $12-$13 with regulation uncertainty ...

This year EPS will surely be lower than 84c so you paying an even higher price

when the traders made their profit from a quick election rush  
and someone looking to buy in for long term investment and discount
for regulation uncertainty and various scenario I reckon they wont buy at this price.

just my 2c


----------



## FxTrader (20 September 2013)

db94 said:


> been pretty much all down hill since the election and presentation of annual results. Perhaps it was over bid? or investors arent liking the uncertainty regarding the future of MMS




Speculative short term trading was driving price action recently.  Many "investors" instead of traders would be holding their position instead of taking profits.  I note the following from an article in the Age...

_Danny Wilson, director of leasing company NLC - one of the top five salary package providers for new cars in Australia - said his firm had rehired 23 of the 72 staff stood down after Labor's divisive announcement.

''We started 23 people back at work this week and we'll keep an eye on demand, and if that keeps getting stronger we'll keep improving our staffing levels,'' he said.

''We saw sales start to return almost immediately after the election - even from the Monday or Tuesday.

''We're below what we're normally projected to be at this time but I think we're trending towards that 75 to 80 per cent mark. In terms of the sales levels, it does take some time for those to work through your system, but in terms of our inquiry levels, we're up to that 75 per cent mark.''_

http://www.theage.com.au/business/fbt-uturn-buoys-leasing-sector-20130917-2tx5y.html

75 to 80% of inquiry volume has returned to NLC already with a similar result likely for MMS.  Projections of a slow return to salary packaged vehicles were always going to be wrong given the popularity and generosity of this perk.


----------



## notting (23 September 2013)

Planning to flip back to positive as selling volume appears to be drying up.


----------



## db94 (22 October 2013)

MMS has announced a final year dividend of 18 cents per share.

AGM presentation has been released, with the webcast starting at 10am


----------



## Hodgie (22 October 2013)

db94 said:


> MMS has announced a final year dividend of 18 cents per share.
> 
> AGM presentation has been released, with the webcast starting at 10am




Thats a nice surprise


----------



## galumay (22 October 2013)

Hodgie said:


> Thats a nice surprise




Indeed, very glad I changed my mind from holding these as a speculative punt and 'moved' them to my investment portfolio.


----------



## Hodgie (22 October 2013)

galumay said:


> Indeed, very glad I changed my mind from holding these as a speculative punt and 'moved' them to my investment portfolio.




This is exactly what I did. I originally bought in back in August for sub $10 as a short term trade and sold pre election as there was already significant gains to be realized.

After the election, with the risk of Rudd/ALP getting into power removed (for now at least!) and also the price of MMS coming down quite quickly I got back in as part of my mid-long term hold investment portfolio.

Capital appreciation on the same day as announcement of an unexpected divvy is nice.


----------



## Hodgie (28 November 2013)

Getting back to business as usual.

Thats what we want to hear.


----------



## craft (28 November 2013)

From memory MMS stated in a previous presentation that they would consider business as usual when the run rate had hit last year’s index plus budgeted (pre Rudd bomb) growth.

The graph shows index at 95% odd since election but based on above assumption I suspect index over last few weeks has achieved budget. (index 100% plus growth)

For this year’s numbers, the question is how much above budget will it go and backfill the 16 July to Sept 13 hole?  Long term this question is irrelevant – the business is back on track – The legislative risk remains, but ironically it may be somewhat diminished for a while at least. And the risk derived as a function of price is far more acceptable.


http://www.asx.com.au/asxpdf/20131128/pdf/42l6p9l9vz630q.pdf


----------



## piggybank (28 November 2013)




----------



## skc (28 November 2013)

craft said:


> From memory MMS stated in a previous presentation that they would consider business as usual when the run rate had hit last year’s index plus budgeted (pre Rudd bomb) growth.
> 
> The graph shows index at 95% odd since election but based on above assumption I suspect index over last few weeks has achieved budget. (index 100% plus growth)
> 
> For this year’s numbers, the question is how much above budget will it go and backfill the 16 July to Sept 13 hole?  Long term this question is irrelevant – the business is back on track – The legislative risk remains, but ironically it may be somewhat diminished for a while at least. And the risk derived as a function of price is far more acceptable.




A very good announcement. I agree with you that the regulatory risk is reduced... and chances are if it ever changes again it will be a lot more gentle and gradual - which means you can probably get out of the position without taking a massive one-off hit.


----------



## FxTrader (2 December 2013)

skc said:


> A very good announcement. I agree with you that the regulatory risk is reduced... and chances are if it ever changes again it will be a lot more gentle and gradual - which means you can probably get out of the position without taking a massive one-off hit.



It would seem that the euphoria over the BAU annoncement has subsided today.  The continued volatility of the MMS share price suggests to me that either the day traders still have this stock in play, profit takers are selling the rally or some combination of the two.  It will be interesting to see if the previous trading pattern returns with MMS hittng resistance at around $13.40 and selling down below $12.


----------



## notting (12 December 2013)

The question is, is the governments support of leasing an underhanded way of supporting car manufacturing in Australia?
If the answer is yes, then now, there really is no point in persisting with this scheme that supports leasing because it will now have no benefit for the Ausi economy.


----------



## n2570 (17 December 2013)

notting said:


> The question is, is the governments support of leasing an underhanded way of supporting car manufacturing in Australia?
> If the answer is yes, then now, there really is no point in persisting with this scheme that supports leasing because it will now have no benefit for the Ausi economy.




Partly true. However the automotive industry is not just making cars. Its selling cars, maintaining / servicing cars. More new cars on the road is also better for road-users (safety) and the environment (see Libs direct action plan )


----------



## n2570 (5 January 2014)

Get ready for a $13 + jump prior to / after the FY14 half year results released on 18 February 2014


----------



## galumay (6 January 2014)

n2570 said:


> Get ready for a $13 + jump prior to / after the FY14 half year results released on 18 February 2014




Pass me your crystal ball, i have some other shares I wish to know their FY14 half year results and future prices!


----------



## n2570 (6 January 2014)

galumay said:


> Pass me your crystal ball, i have some other shares I wish to know their FY14 half year results and future prices!


----------



## skc (11 February 2014)

notting said:


> The question is, is the governments support of leasing an underhanded way of supporting car manufacturing in Australia?
> If the answer is yes, then now, there really is no point in persisting with this scheme that supports leasing because it will now have no benefit for the Ausi economy.




MMS is taking a hit today on the back of Toyota's decision to exit manufacturing.

Here's some rant from CLSA about the implications...



> Toyota’s decision to stop manufacturing in Australia increases regulatory risk for novated lease businesses, according to CLSA analysts Paul Graham and Oscar Oberg.




http://www.afr.com/p/opinion/toyota_end_to_production_raises_N8j63ZjiAIaqILxBLPpoPL


----------



## craft (11 February 2014)

skc said:


> MMS is taking a hit today on the back of Toyota's decision to exit manufacturing.




The current  book build for SG Fleet ($200+ million) might also have a bit to do with it.


I have them down as reporting today - not sure if that is accurate.

edit.

Looked up report date - Its actually scheduled for COB 18th.


----------



## VSntchr (3 March 2014)

MMS went under $10 this morning, intra day low ~$9.50.

There is a couple of downside risks floating around at the moment and the ever-present political risk is (deservingly) heightened at the current time. With that said, the price is getting back to pretty compelling levels if you assume MMS can maintain the model.


----------



## craft (3 March 2014)

VSntchr said:


> MMS went under $10 this morning, intra day low ~$9.50.
> 
> There is a couple of downside risks floating around at the moment and the ever-present political risk is (deservingly) heightened at the current time. With that said, the price is getting back to pretty compelling levels if you assume MMS can maintain the model.




The full draft of the not for profit working group was released via freedom of Information, last week - suspect that is influencing the price at the moment.


----------



## VSntchr (3 March 2014)

craft said:


> The full draft of the not for profit working group was released via freedom of Information, last week - suspect that is influencing the price at the moment.




I did see that and was wondering whether that was spooking some investors. IMO though, this is incredibly far from legislation. Given that even IF it was accepted in some form similar to what is suggested, it would take some time to implement, allowing MMS to respond by altering their operations and making any necessary adjustments..


----------



## skc (3 March 2014)

VSntchr said:


> MMS went under $10 this morning, intra day low ~$9.50.
> 
> There is a couple of downside risks floating around at the moment and the ever-present political risk is (deservingly) heightened at the current time. With that said, the price is getting back to pretty compelling levels if you assume MMS can maintain the model.




It went ex-div by 21c this morning. Often on ex-div days the market depth becomes really thin (as many brokers automatically delete standing orders). The seller just managed to find a hole in the thin depth and flash crashed it down to $9.50 on only 10,000 shares. Probably some charting coming into play as well as $10 was a nice round number for automated stop losses (to those silly people who use them). So nothing to see really... Unless whatever Craft said is real and having some influence...



craft said:


> The full draft of the not for profit working group was released via freedom of Information, last week - suspect that is influencing the price at the moment.




Please explain?


----------



## craft (3 March 2014)

skc said:


> It went ex-div by 21c this morning. Often on ex-div days the market depth becomes really thin (as many brokers automatically delete standing orders). The seller just managed to find a hole in the thin depth and flash crashed it down to $9.50 on only 10,000 shares. Probably some charting coming into play as well as $10 was a nice round number for automated stop losses (to those silly people who use them). So nothing to see really... Unless whatever Craft said is real and having some influence...
> 
> 
> 
> Please explain?




The spike today is probably more to do with the ex date - stuff all volume down there.

More weighing on the market would be this.

http://www.treasury.gov.au/Access-to-Information/DisclosureLog/2014/1447


----------



## burrow (3 March 2014)

VSntchr said:


> MMS went under $10 this morning, intra day low ~$9.50.
> 
> There is a couple of downside risks floating around at the moment and the ever-present political risk is (deservingly) heightened at the current time. With that said, the price is getting back to pretty compelling levels if you assume MMS can maintain the model.




Ex-dividend $0.21 today.


----------



## skc (3 March 2014)

craft said:


> The spike today is probably more to do with the ex date - stuff all volume down there.
> 
> More weighing on the market would be this.
> 
> http://www.treasury.gov.au/Access-to-Information/DisclosureLog/2014/1447




Thanks. This is definitely important. I wonder if MMS will bother making a statement about it (which will probably just draw people's attention to it and put pressure on the share price anyway).


----------



## craft (3 March 2014)

skc said:


> Thanks. This is definitely important. I wonder if MMS will bother making a statement about it (which will probably just draw people's attention to it and put pressure on the share price anyway).




Probably should have done it by now if they were going to.

Its all been basically in the media and public domain and commented on prior by the company as the working group handed the report to the government quite a while ago - this is just the first time the actual report has been seen in full thanks to somebody doing a FOI.


----------



## galumay (12 May 2014)

The market reacted very favourably to the news of the strength of MMS recovery from the Rudd debacle, up nearly 6% today to close at $11 exactly.

I wonder if the institutional buyers are moving back in again?

Anyway, happy to continue holding, I bought as a spec punt under $9, but re-rated them into my investment portfolio after the election. I will reassess mid year and see where its going.


----------



## Faramir (13 May 2014)

It fell under $10 because of rumours of changes to FBT. There will be no changes this Budget. I am predicting (ok -guessing) that everyone will realise this either Tuesday or Wednesday after Budget Night.

I hold some shares. Got them last month at $9.62. I wish brought MMS last year at $7 but I wasn't monitoring stocks last year. I am hoping hold MMS for the long term.


----------



## qldfrog (13 May 2014)

other way of seeing that jump yesterday:
enough people have had access to the budget this week end before release and confirmation  MMS was safe for another year=>
insider trading but on a wider spread, so wide the share price significantly rises...
my guess only but sometimes, the most obvious answer is the right one!


----------



## galumay (13 May 2014)

qldfrog said:


> other way of seeing that jump yesterday:
> enough people have had access to the budget this week end before release and confirmation  MMS was safe for another year=>
> insider trading but on a wider spread, so wide the share price significantly rises...
> my guess only but sometimes, the most obvious answer is the right one!




Yes, that is another possibility, although I really doubt that could move the price 6% in a days trading - after all there was never the slightest suggestion that there would be any changes to the process in this budget.

One thing it highlights is how difficult it can be to explain price movements even after the event and with the aid of 20-20 hindsight, yet people stake their savings on believing they can predict price movements with foresight!

I do agree with your 'Occam's razor' point, the most obvious/simplest explanation is very often correct, and thats not unsupportive of buying action by Institutionals.

I also had a bit more of a detailed read of their recent announcements and the expanding business in the UK looks to have a lot of potential and may help to broaden and strengthen the underlying business model for MMS.


----------



## burrow (13 May 2014)

Wouldn't be surprised to see MMS back up around the $15 mark by this time next year. EPS forecast about $0.97 and PE of 16 would do it. The long--term is more clouded as analysts will always have potential FBT changes in mind. That being said, MMS are diversifying away from this risk.

Tim.


----------



## ROE (2 July 2014)

I Actually prefer smart group over this it listed today and dropped 9% so I pick up some...seem reasonable price with risk and reward after the price drop.

Their earning is fairly diversified and not all ties to car leasing, their revenue only drop 4% with the FBT 
debacle ... 4 times smaller and has room to grow 

but both are good business with regulation uncertainty.


----------



## Ves (15 July 2014)

The temporary suspension of Remserv (MMS subsidiary) from writing _new_ contracts for novated leases for QLD Government employees is an interesting development.   Whilst it is reportedly immaterial in terms of earnings according to the company,  it potentially raises questions between MMS and their on-going relationship with the QLD Government  (which by all reports is a very lucrative contract - especially the exclusive agreement with QLD Health).

I've had the feeling in the past that Fairfax love to jump all over this company - so it may turn out to be another storm in a teacup.


----------



## VSntchr (17 July 2014)

Looks like the storm in a tea-cup analogy has proven to be the correct option VES, announcement out this morning stating ban lifted and no material impact.


----------



## Faramir (6 February 2015)

Please help a beginner like me understand this:
http://www.asx.com.au/asxpdf/20150205/pdf/42wfq08sv1w66s.pdf
Announcement made 8pm.
Aquisition Of Presidian for $115 million.

I don't know if that's too much, just right or a bargain?

I have no idea of how the market will react later today. I know won't react. I purchased MMS last April 2014, sat through July dips and now sitting on about 18-19% profit. It was the second stock I purchased. I completed missed out on the July 2013 drop because I had no involvement in the stock market.

First half FY 15 NPAT for McMillian Shakespeare is expected to be $31.1 million

Presidian revenue is $64.8 million and EBITDA $12.2 million for FY 2014
For Dec-14 YTD Normalised Revenue $37.7 mil and normalised EBITDA $7.2 mil

I am sorry if I cannot add any valuable input to MMS (I am still a beginner). I do not understand the cons of this deal. The pros are all spelt out in the report (see above link) 

The main question: did they pay a fair price for it? Will adding a new Retail Financial Services arm to MMS, decrease or increase MMS performance as a business.

(My gut beginner naive feeling is it will increase it.) no more from me. Time for more experienced posters to add more valuable input/contributions to this thread

Thank you in advance.


----------



## peter2 (22 March 2015)

Short term break-out momentum trade setting up suggested by forum regular*. 

Price consolidating above recent highs. I would like to see a close >12.10 with above average volume. 

Note: goes XD 0.25ff 30/3.  We might see some demand for the stock (with div) this week if the market remains bullish.

Note: I'll even consider a failed bear trap (<11.50) if that happens as a buy signal. 

Definitely one for the daily watch list.


----------



## galumay (22 March 2015)

Yep, the market has reacted well to MMS's continued recovery from the effect of the threat of legislative change prior to the last election. All the fundamentals were positive in the H1 report, strong growth in the FCF so I would expect it will continue to perform well.

Happy to hold and collect the divvys.


----------



## Faramir (23 March 2015)

This article in thebull.com.au answered my question in post #354.
http://www.thebull.com.au/premium/a/52994-mid-cap-stock-pick-for-long-term-investors.html

I like Tony Featherstone's articles. I think the last 5-7 paragraphs are important reading for me. MMS is one of my best performing stocks so far.

I like these two paragraphs in the article:



> Clearly, the company is not waiting for any change. Its $115 million acquisition in February of Presidian is a smart move. Presidian is an independent provider of finance, warranty and insurance products and a specialist in used cars. The acquisition bolsters McMillan’s presence in consumer finance in new and used cars and makes it less reliant on FBT exemptions.
> 
> McMillan’s United Kingdom operations, expected to turn profitable in 2014-15, are another long-term growth engine. A bigger offshore presence reduces the company’s exposure to Australian regulatory risk and the UK market in new-car salary sacrificing has excellent prospects.




Any more input from anyone?


----------



## galumay (24 March 2015)

Faramir said:


> Any more input from anyone?




I find the thing with acquisitions is that there is not much substitute for waiting and looking at what it does to the balance sheet. Its hard enough to have any level of certainty about what will happen in the future with a stable company's financials, let alone one that has added an acquisition. 

The company's always bang on about synergies - but all too often the net result is negative rather than positive!

The MMS deal all sounds good, at least its largely withing their realm of competence, its proportionally small and the numbers look OK. I think the main positive is how well MMS are doing as a whole business, my analysis shows very strong FCFE growth and I am happy to continue to hold.


----------



## craft (1 April 2015)

peter2 said:


> Short term break-out momentum trade setting up suggested by forum regular*.
> 
> Price consolidating above recent highs. I would like to see a close >12.10 with above average volume.
> 
> Note: goes XD 0.25ff 30/3.  We might see some demand for the stock (with div) this week if the market remains bullish.




I'm not sure that Peter still has this on his radar for Pav's portfolio So I will just make a quick mention why I suggested it to him.

I eyeball charts of my holdings regularly. Not so much to trade them technically but to just absorb a source of visual information.

This jumped out at me so I mentioned it to Peter. 





Price compressing above a resistance/support level with an internal 5 wave pattern.  Most importantly a marginal break of the resistance on the 5th wave that didn't follow through  - making the marginal break of the compression look promising. When I was trading I would have taken the entry at next open with my initial exit the low of the trigger day. 

Depending how you treat the dividend in relation to trading (which is the really interesting question) The trade is still open and MMS has today made a new high (again depending on how you treat dividends) on the time frame relevant to the trade.

Question - how do you treat dividends in relation to your entry patterns / trade management exit points?


----------



## peter2 (1 April 2015)

I liked the location of the consolidation (above old highs) as well (noted in post #355). The choice of the BO level was tricky with a few of us having differing opinions so I selected 12.30. I had fully intended to include this trade if it triggered into the Momentum thread. 

It did trigger (traded >12.30) the day before it was due to go XD. I did not post the trade as we know that most prices fall by the amount of the div (MMS 0.25ff).  craft is quite right, trading around XD dates is tricky when the amount of the div is a significant part of the initial risk. In this case I decided to avoid it (in the Pav Mom thread) and keep an eye on it. 

If price trades >12.30 soon then it would be a better trigger (IMO). I love seeing stocks swallow their div and trade higher.


----------



## galumay (1 April 2015)

peter2 said:


> I love seeing stocks swallow their div and trade higher.




From quite a different perspective, i love it too! The divvy is in the bank (well, nearly)
& they are chugging along very nicely.


----------



## peter2 (1 April 2015)

I don't want to make you choke on your coffee, but is there any possibility that this years budget might contain another bitter pill for MMS. The gov't is certainly hard up and might throw around a few ideas for saving money. 

MMS seems to be diversifying but still relies on their core business. 

I'm just considering regulatory risk.


----------



## galumay (1 April 2015)

peter2 said:


> I don't want to make you choke on your coffee, but is there any possibility that this years budget might contain another bitter pill for MMS. The gov't is certainly hard up and might throw around a few ideas for saving money.
> 
> MMS seems to be diversifying but still relies on their core business.
> 
> I'm just considering regulatory risk.




Even Abbott is not that stupid.....well OK he is, but I really cant see it, that would be an extordinary backflip even for this mob. You can never say never with regulatory risk, and every industry is at risk of it, just because you havent thought of it doesnt mean some lunatic minister hasnt dreamt it up!


----------



## craft (2 April 2015)

peter2 said:


> I'm just considering regulatory risk.




I would say the probability of MMS experiencing negative outcomes from regulatory changes is very high, the more unknowable question is when.  What matters for long term investing is buying at a price that adequately compensates for the risk. The bout of regulatory risk in 2008 gave rise to prices that have provided adequate return via dividends alone (more dividends then purchase price) by the time the next bout of regulatory awareness arose in 2013. 





The best time to buy MMS for a long term investment is when everybody is aware of the regulatory risk.  Pricing inevitable gets to the situation where you don't have to pay for the upside of regulatory risk not occurring.

MMS earnings and growth profile have returned to what they were - the price is still well down - people are obviously pricing in regulatory risk now, but how correctly?.




MMS could easily be a Multiple bagger (2+R) for a long term holder even with negative regulatory outcomes. The gap risk of an immediate change being something like 50%(0.5R) 

Short term trading is more problematic - you also face the potential 50% immediate gap - but will never be in long enough to have an upside that compensates that risk.  Short term trading MMS is playing gap roulette. With a short hold time frame your probabilities of not hitting the gap are high - but you should position size for the possibility of getting caught in the gap. 

Everything has gap risk - Any company can announce fraud in the books for example. Some gap risk are just more obvious than others - its the unobvious that normally get you. If you always have short term trades on, your gap risk exposure becomes no less then the long term holder.  Position sizing on your planned initial stop exposure rather then the unlikely but negative potential outcome for MMS would be very risky - but that's true of all companies that have gap risk and they all do.  Fixed fractional position sizing is rubbish for gap risk control - all gap risk whether you are a short term or long term holder is only managed by diversifying your exposures.

Sorry Peter2,  apart from the obvious line chart on close set up in MMS, the suggestion was also made as a basis to illustrate  gap risk in trading, which I'm pleased to see you have picked up on.  I've had my  on the topic now.


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## galumay (2 April 2015)

craft said:


> I've had my  on the topic now.




Great post, craft. I realise there is an advantage in knowing what the regulatory risk is a company faces, thats a big advantage with MMS. As pointed out every company has regulatory risk, generally you cant see it coming though.


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## peter2 (15 May 2015)

Nice rally in MMS price post budget leading to a break-out to new highs.

During the sideways price consolidation I notice that the volume indicators were very positive indicating accumulation rather than distribution. The TMF remained steady and just above its zero line, while the OBV rose.


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## galumay (24 February 2016)

Another stellar HY for MMS, Revenue up 34%, EBIDTA up 39% and NPAT up 25%.

Happy that I bought in at near the bottom after the Rudd announcement, even happier I re-rated it as investment grade rather than a contrarian speculative punt as I had initially rated my position in MMS!


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## craft (24 February 2016)

galumay said:


> Another stellar HY for MMS, Revenue up 34%, EBIDTA up 39% and NPAT up 25%.
> 
> Happy that I bought in at near the bottom after the Rudd announcement, even happier I re-rated it as investment grade rather than a contrarian speculative punt as I had initially rated my position in MMS!




Hi galumay

Report looks alright to me as well.  Reports get treated like a triage arrangement by me at this time of year as far as in depth analysis goes. MMS looks pretty good, I’ll look at it more latter.  But one thing I do want to check out is why the disparity in P/E between MMS and others in the field. You take the worst case scenario where regulatory risk wipes out all salary sacrificing/novating profit etc and MMS still has 13.5M profit in other segments and a P/E of <11. SIQ by contrast has no unexposed profit(?) and a P/E > 18.  SIQ report later today, will explore it more then, maybe it’s a justifiable growth differential, but can’t help think the regulatory risk is being priced differently for MMS as opposed to the others, maybe because it was listed at the time of the Rudd Hiccup and the chart is a reminder.


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## Ves (24 February 2016)

How much risk to you attribute to the AM segment, if through government meddling, it lost the _(IMO)_ competitive advantages gained from being backed by a cash cow?


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## galumay (24 February 2016)

Ves & Craft, I suspect you are right craft, the market has a long memory and the pain of the Rudd intervention is not easily forgotten. While some risk remains, its a quantifiable risk that we are aware of - and as I think we have discussed previously, all companies have the potential to be struck by black swan legislative events- at least we know about it with MMS.


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## skc (24 February 2016)

craft said:


> You take the worst case scenario where regulatory risk wipes out all salary sacrificing/novating profit etc and MMS still has 13.5M profit in other segments and a P/E of <11.




How did you come up with this PE multiple?

Current market cap is ~$950m. So if NPAT is $13.5m then PE is not anywhere near 11?



craft said:


> SIQ by contrast has no unexposed profit(?) and a P/E > 18.  SIQ report later today, will explore it more then, maybe it’s a justifiable growth differential, but can’t help think the regulatory risk is being priced differently for MMS as opposed to the others, maybe because it was listed at the time of the Rudd Hiccup and the chart is a reminder.




I am wondering about the same thing. One possible reason is that MMS is more easily available for the shorters, although the numbers suggests that there are only ~4% shares shorted. Shorts in the other names are close enough to zero.

As a side note... my wife recently started working for an organisation that allows her to salary sacrifice her income (with Remserve). So we spent a bit of time going through the papers and looking for what can be spent pre-tax. The overall experience left me with the impression that:
1. Such a crazy messy way for claiming expenses (probably not unlike any other parts of the tax system).
2. Really doesn't sound very fair to the other tax payers. Why should anyone be able to pay for a holiday with pre-tax money?

My stance is that, it's only a matter of when, not if, that the government will try to these in.

Which probably makes the PE multiples ascribed to SIQ, SGF and ECX all the more silly, and how smart and lucky for the private equity sellers to be able to sell these entities AFTER the MMS experience.


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## craft (24 February 2016)

skc said:


> How did you come up with this PE multiple?
> 
> Current market cap is ~$950m. So if NPAT is $13.5m then PE is not anywhere near 11?




I meant the whole existing MMS business is on a P/E of less than 11 compared to SIQ on above 18.


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## craft (24 February 2016)

skc said:


> As a side note... my wife recently started working for an organisation that allows her to salary sacrifice her income (with Remserve). So we spent a bit of time going through the papers and looking for what can be spent pre-tax. The overall experience left me with the impression that:
> 1. Such a crazy messy way for claiming expenses (probably not unlike any other parts of the tax system).
> 2. Really doesn't sound very fair to the other tax payers. Why should anyone be able to pay for a holiday with pre-tax money?




Does she work for a not for profit/gov't agency or private enterprise. I have had a look years ago at novated leases as a private company employee and the savings didn't seem to justify the hassle, but plenty of co-workers liked it as a packaged up way to finance and budget for a new car and running expenses.

I'm not sure about financing holidays but NFP & Gov't agencies certainly can sacrifice more wages for a wider variety of things - There's a lot of politics (and enterprise bargaining legalities) involved in taking this away, because its built into wage structure that attracts and retains employees. In a lot of ways its a federal gov't subsidy to federal agencies, state government agencies and Not for Profits.  Certainly not efficient but not politically easy to change either I would suspect. Certainly would not provide any savings because all the dept heads, State Premiers & bleeding heart NFP's, not to mention the employees would be screaming for money to fill the blowout in the wages bill to retain staff.

Wether it gets changed or not it still begs the question why different companies with the same legislative exposure seem to have such different valuation metrics.


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## craft (24 February 2016)

If we use today’s SIQ’s presentation proforma for acquisitions NPATA of 32.6M and today’s close of  $4.40 SIQ is trading on a EV/NPATA of 14.7x

SIQ present proforma  NPATA margin as 30%  which is similar to MMS GRS division actual 31%. GRS achieved 15% NPAT organic growth. Can’t work out SIQ’s organic, it’s too mixed up with purchased growth but it looks like they may have achieved 13,800 organic packages on a 2014 base of 118,700 so that’s about 11-12% organic maybe.  MMS had revenue of 184.6M, SIQ proforma 108.5M. SIQ finished with a run rate of 182,500 packages after acquisitions, MMS had 329,400.  

MMS’s GRS appears to be nearly twice the size, transparently growing organically and slightly more profitable, possibly scale advantage.  SIQ is growing by acquisition in the segment.  Whilst MMS has made acquisitions to diversify it has not spent on acquisitions within GRS.

IF you value MMS’s GRS division at the same multiple as SIQ it would be worth 860Million.

MMS market cap is 953M and has net cash of 11.6M (SIQ net debt of 33m) excluding debt associated with the fleet funding which means the rest of MMS has a market cap of 81Million.  For that 81M you get ~ 311Million of net assets in the Asset management & Retail Financial Services segments and approx 30Million full year NPAT in businesses largely unaffected by the legislative risk that SIQ and the GRS division face. MMS’s profitability is also being negatively impacted by mainly organic growth initiatives to diversify into the UK.

On a relative basis this quick assessment appears to confirm that different legislative risk is being applied for what in my mind is exactly the same risks or the market thinks MMS’s diversification is absolute crap.  Personally I like it, an early presentation I seen on it described their diversification  strategy as a virtual car dealership – all the revenue streams, none of the inventory costs. (comsec has APE at a P/E of 25)


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## craft (24 February 2016)

Ves said:


> How much risk to you attribute to the AM segment, if through government meddling, it lost the _(IMO)_ competitive advantages gained from being backed by a cash cow?




Cost of capital to the AM division would probably go up without the GSR division and you would lose the cross sell opportunities. A small profitability and growth impact - not a risk to its survival, certainly not how it is conservatively geared at the moment.


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## Ves (25 February 2016)

craft said:


> Cost of capital to the AM division would probably go up without the GSR division and you would lose the cross sell opportunities. A small profitability and growth impact - not a risk to its survival, certainly not how it is conservatively geared at the moment.



I tend to agree,  but I think without the GSR division they'd have to gear it higher.   It'd survive,  but it becomes a riskier proposition.   

I also agree with your assessment of the market pricing of MMS and SIQ at the moment.    Considering it is far, far closer to vertical integration MMS probably shouldn't be trading at a significantly lower multiple than SIQ given the regulatory risks.

At the end of the day,  if most of these companies lose significant earnings due to government reform,  and MMS has enough earnings outside of GSR,  it'll probably have the opportunity to clean up the scraps left behind by the smaller players.

Have you ever overlayed MMS' chart since June 2013 to the political polling numbers?


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## craft (5 May 2016)

> RE: AN OPEN LETTER TO ALL NALSPA MEMBERS
> 
> I write regarding car Fringe Benefit Tax arrangements and confirm that a Shorten Labor government will
> not implement any changes to the Statutory Formula Method relating to employer provided motor
> ...




The political pain last time was too costly - and now all sides know it!  There are Peter Costello comments around where he reminisced about considering changes and quickly concluded not to go near it with a barge poll. 

Sensible economic policy (or probably not) change is now probably further away then it has ever been.


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## craft (5 May 2016)

Since the Rudd policy (now negated by the shorten letter) the earnings multiple has come down but the underlying business and hence earnings have grown well.


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## Ves (5 May 2016)

That's fairly comforting news for shareholders.

Thinking out aloud...  Does that letter make the industry more attractive for long-term competition to consider entering?  I wonder if any potential competitors have been deterred by legislative risk.

That's the odd thing with risk.... reduction in one area can often mean a counter-effect in another.  360 degree thinking.


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## craft (5 May 2016)

Ves said:


> That's fairly comforting news for shareholders.
> 
> Thinking out aloud...  Does that letter make the industry more attractive for long-term competition to consider entering?  I wonder if any potential competitors have been deterred by legislative risk.
> 
> That's the odd thing with risk.... reduction in one area can often mean a counter-effect in another.  360 degree thinking.




Probably. I know the story that underlies my valuation of MMS has declining  profitability for the remuneration services business for that exact reason.


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## galumay (5 May 2016)

Its sort of the end of a story for me, bought in just after the Rudd announcement and have seen a very nice recovery in the intervening period, topped off with the jump today. One of the best performers in my portfolio.


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## piggybank (6 May 2016)

A nice rise of 14% since last Fridays close. 

The weekly chart starts from the carnage in July 2013.



​


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## Ves (22 September 2016)

Ves]Thinking out aloud... Does that letter make the industry more attractive for long-term competition to consider entering? I wonder if any potential competitors have been deterred by legislative risk.[/quote]

[QUOTE=craft said:


> Probably. I know the story that underlies my valuation of MMS has declining  profitability for the remuneration services business for that exact reason.



I've been thinking about this more and more since the result.  

The note on page 24 of the 2016 results presentation  (I wish they'd explained it in more detail) has been in the back of my mind.  

I'm caught in two minds -   competition has really ramped up and they're gunning for that contract and MMS' hand has been forced to significantly reduce their margin or lose it.

It's bad because it's most likely a sign of where we are going but on the other hand it's also good because MMS has the economic muscle to carry such a drop and still be competitive enough to win the contract (assume this happens and I think it will).

I probably had them milking the RS segment for a bit longer because this happened,  and gaining a sustainable earnings stream outside of this in the mean time with the excess cash flow.  Has happened,  but ideally would like more of it.


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## craft (22 September 2016)

Ves said:


> I'm caught in two minds -   competition has really ramped up and they're gunning for that contract and MMS' hand has been forced to significantly reduce their margin or lose it.




The legislative risk diminishing has made the industry more attractive so the competition increases just as you say. I'm not sure who the price leaders are? Are MMS responding as you suggest or are they leading the price down now after not being so sharp when there was more present legislative uncertainty.

Looking at the size and diversification MMS should have the lowest cost base,  the best alternative revenues and biggest cross sell opportunities. But the market isn't pricing it relatively like that. (at the moment)

I think there is enough buffer in MMS price to cover declining profitability from Remuneration services. Not so sure about some of the others.


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## Klogg (2 December 2016)

craft said:


> The legislative risk diminishing has made the industry more attractive so the competition increases just as you say. I'm not sure who the price leaders are? Are MMS responding as you suggest or are they leading the price down now after not being so sharp when there was more present legislative uncertainty.




The legislative risk to GRS has certainly died down, but there are potential regulatory changes in the RFS unit. 

ASIC put out this report:
https://www.asic.gov.au/about-asic/...sale-of-add-on-insurance-through-car-dealers/

Interesting stats in there, and the following is just as interesting:


> Today's report follows ASIC's release of two reports in February this year about the sale of add-on life insurance by car dealers. ASIC stressed the need for insurers to address the high costs, poor value and poor claim outcomes of life insurance products sold this way.
> 
> ASIC is putting general insurers on notice that they need to improve consumer outcomes by making substantial changes to the pricing, design and sale of add-on insurance products or face additional regulatory action. The key commitments we are seeking from insurers are:
> 
> ...




Not quite sure how that plays into the RFS segment yet, but if there's a 20% cap on commissions, I suspect brokers would take the majority of that impact - just not sure of the split yet. TBH, I'm not even sure of the current commission structure, something to look at.


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## peter2 (28 May 2018)

Since the last post MMS has gone from $10 to $18 and is now in a corrective pattern. 






Normally this is a safe trading stock with low volatility but that isn't so at the moment. There's been some huge daily swings in MMS. I assume these are due to thin MD and should be avoided until the volatility settles.


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## Faramir (28 May 2018)

MMS gets more volatile near election time until both parties releases Fringe Benefits Tax statements. That means, we won't repeat the Kevin Rudd (& co) statement of 2013, where that halved MMS. I picked a very small amount in Apr 2014. I haven't done any averaging up. Maybe there will be an opportunity soon???? Maybe wait until the next election is called???? MMS was my second stock that I purchased. Got it under $10. I felt very nervous back then. Now I am regretting not buying more.


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## Faramir (28 May 2018)

ROE said:


> I Actually prefer smart group over this it listed today and dropped 9% so I pick up some...seem reasonable price with risk and reward after the price drop.
> 
> Their earning is fairly diversified and not all ties to car leasing, their revenue only drop 4% with the FBT
> debacle ... 4 times smaller and has room to grow
> ...




2 Jul 2014, ROE mentioned Smart Group. It has definitely performed better. Back in 2014, my naive thinking told me not another company similar to MMS because I was doubling my risk of another Government statement regarding FBT. Also seeing that MMS were explaining in UK and trying to diversify back then gave me more comfort. Wished I got both of them. Back then, I think I purchased NVT instead?? What a dumb decision!

In truth, I will admit that I have not monitored MMS as closely as I should. Maybe that is a good thing as I have ignored much noise. MMS just ticks along for me. I should accumulate. I hope @peter2 is right as he indicates that volatility should increase.

I missed @ROE, I hope he is well.


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## Faramir (8 November 2018)

Trading Halt

Going to merge with Eclipx.
https://www.asx.com.au/asxpdf/20181108/pdf/4403p16vyjrwc5.pdf

I do not know what to do nor what to think.
I held MMS since April 2014. Solid performer. Wished I had more time to study this proposal better.



> • Scrip and cash: 0.1414 MMS shares and $0.46 cash offered for each Eclipx share held, implying a total value of $2.85 per Eclipx share based on MMS’ last closing price of $16.90 on Wednesday, 7 November 2018
> • The consideration represents a 33.2% premium to Eclipx’s undisturbed price of $2.14 on Friday, 17 August 2018


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## tinhat (8 November 2018)

Going by the stock market reaction, its a good deal for Eclipx!


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## galumay (8 November 2018)

@Faramir I sold out of MMS in late 2017 for about $14.60, I had bought them at under $9 in 2013. I figured they had run past my calculated range of IV and there were better homes for my capital elsewhere. I dont thnk you have made a mistake in continuing to hold though, its still a solid business.

As far as the merger goes, it doesnt look too bad, I dont like the debt MMS will inherit, but then I have a particular dislike of debt in the current climate, it also seems a pretty generous valuation of Eclipx and their shareholders would certainly be pleased. 

I guess the question for you is whether you have a compelling alternative investment for the capital or not?!


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## Faramir (8 November 2018)

Hi @galumay 
No, other than cash, I have no alternative to MMS. If I found an alternative, I use existing cash first before selling MMS. I still need to study this merger. As I said - I haven’t made up my mind about MMS.

McMillan Shakespeare and Eclipx will combined to be bigger than SmartGroup.


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## luutzu (8 November 2018)

Faramir said:


> Hi @galumay
> No, other than cash, I have no alternative to MMS. If I found an alternative, I use existing cash first before selling MMS. I still need to study this merger. As I said - I haven’t made up my mind about MMS.
> 
> McMillan Shakespeare and Eclipx will combined to be bigger than SmartGroup.




Have your checked out the Reject Shop?

Pretty interesting.


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## peter2 (21 January 2019)

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread. 

Setup: Near BO-NH in new trend    Grade B due to low daily traded volume
Buy limit: 14.65, iSL 13.30, initial target 17.00


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## peter2 (17 March 2019)

Another reversal opportunity in MMS, but first let me explain the last one. I missed out on the previous opportunity as the market opened higher than my buy limit order (14.65). The market came down to 14.68 but no lower so I missed this trade. I held my disappointment for 5 weeks as price went higher. Price tanked before (?) and after the half yearly report. My disappointment turned to relief as I missed out on another losing trade during the reporting period. 

Another reversal opportunity in MMS. Has to be risky after the 1/2 yearly selloff and the ongoing negotiations with the Eclipx merger. Good enough for the 40P portfolio but not for me.


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## Faramir (20 March 2019)

Thank you for pulling out of Eclipx Group merger.

https://www.asx.com.au/asxpdf/20190320/pdf/443mvydlhybn3z.pdf

I feel sorry for Eclipx shareholders. I feel relief for MMS.


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## Ann (23 March 2019)

Looking at the weekly Twiggs Money Flow indicator is appears as though the money may be departing from this stock.


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## peter2 (26 March 2019)

Getting a position in MMS is proving to be difficult. In my first attempt price jumped over my buy limit and I miss out on a losing trade. My second attempt has also been thwarted by disappointing price movement. 

2nd setup: Bullish weekly bar (key reversal) with high volume. Things were looking positive as the merger with Eclipx looks likely to be aborted. Price opened higher after the news but ended down on the day. I raised my exit trigger to remove some of the initial risk while allowing price to test the BO level (13.00). However price closed below the exit trigger yesterday and I've sold this morning and realised a small loss (-0.5R). I'll re-enter if price closes above 13.00 again provided price doesn't close below 11.50. This stock has been as slippery an an eel. 

Clearly this price corrective pattern is not complete and is now below the 61.8% fib level of the prior impulsive move up. I would suggest that the MMS mgt team have a bit of work to do to get this business back on track.


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## Miner (26 March 2019)

peter2 said:


> Getting a position in MMS is proving to be difficult. In my first attempt price jumped over my buy limit and I miss out on a losing trade. My second attempt has also been thwarted by disappointing price movement.
> 
> 2nd setup: Bullish weekly bar (key reversal) with high volume. Things were looking positive as the merger with Eclipx looks likely to be aborted. Price opened higher after the news but ended down on the day. I raised my exit trigger to remove some of the initial risk while allowing price to test the BO level (13.00). However price closed below the exit trigger yesterday and I've sold this morning and realised a small loss (-0.5R). I'll re-enter if price closes above 13.00 again provided price doesn't close below 11.50. This stock has been as slippery an an eel.
> 
> ...



Thanks Pete for your  share.
Some wishful thoughts which probably applicable to MMS, AHG, SIQ and others.

Market for car market is generally sluggish.
FBT is cost prohibitive for salary packaging.
Flogging by additional taxes by Canberra on income limits of $250 K is concernably higher and even car packaging is no more attractive in FY 2018 and 2019.
Generally contractors do not bother for salary packaging or novated lease.
Me too products and providers are  making  MMS and similar good service providers  no more attractive due to cost ground. In fact in my Rio days, I was happy to accommodate MMS lease (2007)  but once came out of  Rio, I do not have the urge to use MMS or any novated lease for that matter.
Companies like Toyota giving 0% interest for 4 years car purchase (my wife bought only last year) than availing 8% interest flogged by companies like MMS is no more attractive. Just alone expense to be tax effective is no more attractive with kilometer leverage does not apply for new comers.
So cutting down the bottom line I am seeing all companies like MMS are losing their hay days. MMS being a sophisticated and upmarket one, going to suffer more.
DNH - debating to buy at dip price but then withdrawing the temptation.
Cheers


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## Faramir (22 August 2019)

MMS up 17.8% today. Good turn around from last Feb half-yearly report.

https://www.asx.com.au/asxpdf/20190821/pdf/447npk0ct4wf8l.pdf
Profit $63.672 million, up 26.6%

https://www.asx.com.au/asxpdf/20190821/pdf/447nqhzhn7tp66.pdf
Let's buy back 82.2 million shares

Very tough environment. Especially with their venture in UK.

Keeping funds in MMS. Dividends are better than a term deposit. If I am desperate for money, I will find another stock instead. I wonder why I never topped up???? Maybe I want to keep my position small or I had limited funds OR I was looking at other opportunities (which never eventuate).


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## craft (23 August 2019)

In relation to the MMS off-market share buyback.

I hold in a superannuation accumulation account, so a tax rate of 15%. and have run the numbers to see if it is worthwhile participating.

Here is the calcs in case it helps somebody else model their own numbers.


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## craft (29 August 2019)

I’m going to tender some of my MMS shares into the buyback. Here is a trade analysis of one of the parcels.






The $15.95 after tax sale price is based on todays close and the calculations in the above post. Buy back is not concluded until 22/10 so final proceeds received will vary a bit.


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## bigdog (9 December 2019)

One of the biggest falls today after asx announcement
9/12/2019 9:07:15 AM FY20 Trading Update

McMillan Shakespeare revealed that it expects its underlying net profit after tax for FY 2020 to be in the range of $83 million to $87 million.

This compares to underlying net profit after tax of $88.7 million in FY 2019. Which represents a year on year decline of 2% to 6.5%.

MS is experiencing more challenging market conditions in Australia, New Zealand and the United Kingdom than expected and these challenging trading conditions aren’t expected to improve any time soon.

Regulatory changes impacting credit and insurance products have resulted in a reduction in its margins this year.











314


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## peter2 (22 February 2021)

*MMS* recovered from the Covid selloff slowly, then rallied strongly from $10 to $12. 

*MMS* is due to report 1HFY21 in two days (24/2/21). I'm expecting a good report since their last business update was well received (price spiked higher).  I've bought an initial position and will wait to see what happens to price after the news.


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