# A2B - A2B Australia



## Kauri (3 November 2006)

CAB with GP's AIM dll for AB


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## RichKid (9 November 2006)

Hi Kauri

Interesting chart, looking at recent price and volume this one looks like it's being sold off by big sellers, but it still has some momentum left. Note the selling spikes and high volume. Those retracements you show look very probably now, perhaps the gap wont be filled completely...will be best for the bulls if the higher of those lower major trendlines holds.


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## Kauri (9 November 2006)

RichKid said:
			
		

> Hi Kauri
> 
> Interesting chart, looking at recent price and volume this one looks like it's being sold off by big sellers, but it still has some momentum left. Note the selling spikes and high volume. Those retracements you show look very probably now, perhaps the gap wont be filled completely...will be best for the bulls if the higher of those lower major trendlines holds.




         Hi GP..
                  Yes, the vol seems to be telling a story. Have set a stop for all of remaining holding at $8.17, either the market will take me out or not. Will watch for _possible_ re-entries around the T/L's if it happens.
            Cheers
                     Kauri


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## Kauri (24 November 2006)

Cab just keeps boxing on....


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## Bluebeard (23 August 2007)

Anyone still following cabcharge (cab). I like the business model, looked at the website, seems like they have plans for outside Australia. Whats people opinions on this stock going forward. The only thing for me that is holding me back is the pe.


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## dj_420 (8 October 2007)

I took position today, will post up a chart later, I like them for a good long term play, good write up in Smart Investor this month also. They have been sold off very heavily after sub-prime meltdown and as yet have not recovered.

Lately I have been investing in that Buffet style, buy a good company when chips are down or sentiment is negative, and wait for it to turn.


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## jkool (3 December 2007)

Cabcharge Australia is pretty impressive business indeed. They have been constantly returning over 20%pa on their equity, hold close to monopoly on taxi and public transport fare charging systems and do not have much debt to speak off (ie. could perhaps cover all their debt with one years' profits or thereabouts).

Its a strong looking dominant player in its industry with only one major problem from where i stand: for me its share price is still quite high to jump in. 

As always once again I looked at their last year financial results in more detail here http://www.soundofgold.com/2007/12/...ustralia-ltd-2007-financial-results-analysis/  so have a read if interested.

Cheers

jkool


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## jersey10 (1 April 2008)

whats going on today? down 5%  have traded this support and resistance channel over the last few weeks and today a drop of 5%?  any info?

J10


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## oldblue (1 April 2008)

Looks like a normal day's trading to me in this bear market.
CAB SP still above its 12 month low, although admittedly fairly close to it, volumes not abnormal, P/E still above 20 so by no means a steal.
Plenty of good stocks being treated like this at present.


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## prawn_86 (28 June 2009)

Dropped 13% on Friday when news was released that the ACCC is pursuing them in court over use of their (near) monopoly powers.

Court cases are never good for a company, and tend to drag on, so further price weakness may occur as things play out


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## ROE (28 June 2009)

prawn_86 said:


> Dropped 13% on Friday when news was released that the ACCC is pursuing them in court over use of their (near) monopoly powers.
> 
> Court cases are never good for a company, and tend to drag on, so further price weakness may occur as things play out




Please Mr Market punish this baby and make it go lower 
This is a bad boy abusing its monopoly power, and doesn't every monopoly or market power abuse their powerful status any how?

hello Woolworths, Telstra and I already know the outcome

The thought of $100 Million penalty scare most people maybe they cut and run next week
I bet if cabcharge spend $100 Mil fighting the battle with ACCC, ACCC may run out of money well before then   

and now ACCC is busy with this case maybe time for Woolworths and Telstra to start abusing their power again


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## prawn_86 (29 June 2009)

Yeh i just caught the knife at $5.12. Watching very closely, but seems to be an over-reaction from the market. (Hopefully  )


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## So_Cynical (29 June 2009)

prawn_86 said:


> Yeh i just caught the knife at $5.12. Watching very closely, but seems to be an over-reaction from the market. (Hopefully  )




Wow got as low as 4.71...still nice catching Prawn, its hard to know how low to go 
sometimes :dunno: im sure u will do well outa this, as ive been cleaning up lately 
buying similar, over sold stocks....im gona lowball something tomorrow.:cowboy:


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## prawn_86 (30 June 2009)

So_Cynical said:


> Wow got as low as 4.71...




Yeh i woulda loved to get it under $5, but it was bought up quickly, i wasnt paying full attention, and my broker webpage had some problems 

Oh well, im happy with it at the level i got it


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## skc (30 June 2009)

prawn_86 said:


> Yeh i just caught the knife at $5.12. Watching very closely, but seems to be an over-reaction from the market. (Hopefully  )




Brave move. Is this a punt or calculated move?

To fully understand the impact of the court case, I would have done the following:

- Look at the market cap prior to the news
- Look at the potential max fine
- Look at the potential impact on future earnings
- Apply some discount factor on the chance that ACCC doesn't win
- Apply some factor on the way market will dis-like the stock for sometime until this is cleared up

And if there is still lots of margin of safety compare to the current price, then it would have been a good punt. Personally I didn't think the upside was there. It has only dropped 20%...

A great over-reaction story comes to mind was a HK company called Mengniu (HKSE 2315). It is a milk producer and when it was revealed it had products containing melamine, the share price plunged.... 70%. The SP has pretty much all recovered now in 6 months.


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## prawn_86 (30 June 2009)

They have been on my watchlist recently SKC, so i have been wanting to pick them up.

They are in a near monopoly position and managed to increase their EPS during the last year, while other firms were decimated. Payout ration of circa 60%, if this is maintained (and i see no reason why not) or even cut slightly (to fund court costs) it is yielding >5% pa on my purchase price. Plus the management seems fairly on the ball.

So not a punt, but one to watch closely. However im trying to accumulate solid business that have been oversold, same as i have done this year with AMP and FLT.

EDIT - And personally i think the ACCC is a toothless tiger that has never done anything except slap people on the wrist occasionally.


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## skc (30 June 2009)

prawn_86 said:


> They have been on my watchlist recently SKC, so i have been wanting to pick them up.
> 
> They are in a near monopoly position and managed to increase their EPS during the last year, while other firms were decimated. Payout ration of circa 60%, if this is maintained (and i see no reason why not) or even cut slightly (to fund court costs) it is yielding >5% pa on my purchase price. Plus the management seems fairly on the ball.
> 
> ...




It has been on my watch list as well as the chart was developing into a good ABC retracement. But the news send it straight through the zone so no trigger was pulled. 

The candle yesterday doesn't look half bad with good close and high volume. 

Good luck with the trade.


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## prawn_86 (25 July 2009)

Well over the last couple weeks Lazard has slowly being upping their stake, now stands at about 8.4% up from around 6% when they started buying.

You can see them coming in everytime the price drops down around the $5.15 area.

Makes me feel more comfortable with my purchase. Hopefully CAB can maintain their div amount from last year whcich would get me about 4% for each div (8% for the year)


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## ROE (26 July 2009)

when you are in for a long time, a drop of 10%-15%
make no differences after you purchase the stock.

the trouble is everyone have the hind insight to say you should wait, but no one can time the market with any degree of accuracy...it 50-50 hit and miss....as long as it meet your value and criteria then it's a good time to buy..


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## prawn_86 (27 August 2009)

Results out today. 

EPS of 51c, up slightly. Dividend maintained at 17c, for a total dividend of 34c for the year.

All looking good to me...


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## ROE (27 August 2009)

prawn_86 said:


> Results out today.
> 
> EPS of 51c, up slightly. Dividend maintained at 17c, for a total dividend of 34c for the year.
> 
> All looking good to me...




Enjoy nice gain there Prawn 
I finished purchase yesterday after a long and exhaust accumulated phase of 2 months time to sit back and chew bubble gum for a while and move on to the next target.

I did message rainmaker2000 and MRC & Co fellow value investors and send them the report before and during my accumulation phase ..hope they take up the offer


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## Rainmaker2000 (27 August 2009)

CAB is certainly well credentialed as company........unfortunately, too many companies for too little cash......thankfully, if every few months was like the last few, I would never have that problem again!!!!

Good luck to holders......I'll pass your regards to my friends who regulate part of this industry


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## ROE (27 August 2009)

Rainmaker2000 said:


> CAB is certainly well credentialed as company........unfortunately, too many companies for too little cash......thankfully, if every few months was like the last few, I would never have that problem again!!!!
> 
> Good luck to holders......I'll pass your regards to my friends who regulate part of this industry




Yeah tell them to go easy on Uncle Reg, he's old and Fragile but sometimes
can pull a few powerfully punch

Uncle Reg Kermode a man to be admired like Uncle Graham Turner


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## prawn_86 (25 July 2010)

Has been in a steady downtrend for a while, on the back of no fundamental reason that i can find. 

Once this trend reverses i'll be buying more. Currently yeilding near 8% at current price and 34cps divvy


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## prawn_86 (27 July 2010)

Just doubled my holdings in these guys in the lead up to their full year results due in am months time. Providing they hold or increase the dividend i'll be happy with either a nice SP rise, or a healthy dividend.

As i have said before i dont see any reason for the recent decline, everything still seems the same as it was 6 months ago to me, they still have a virtual monopoly in Aus and are expanding into other countries


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## malachii (27 July 2010)

There was a big article in the weekend fin review about 2 weeks ago interviewing a competitor to them that was taking large chunks of their market (about 20% i think from memory) and was branching out into the remaining states it didn't currently have exposure.  Maybe this and the legal trouble CAB are in is reflecting the price downtrend.

malachii

PS I DONT own any CAB nor am I planning on trading them in the near future.


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## prawn_86 (27 July 2010)

thanks Malachii,

do you have a link to this or the name of the competitor? would be interesting to read

cheers


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## ROE (27 July 2010)

I bought more a few days ago 4.44 no fear 
I now have  a very big holding in cab still room for a 2 more purchase 

I write up later why if I have time, (too hard on the iPad) again the threat of small rivals always create more fear than facts good for buying it cheap

Sometimes you just have to stand by your conviction against all odds


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## malachii (27 July 2010)

prawn_86 said:


> thanks Malachii,
> 
> do you have a link to this or the name of the competitor? would be interesting to read
> 
> cheers




I'm sorry prawn but I don't.  I bought the AFR (hardcopy) the other weekend and would have used it to light the fire by now.  Surely I wasn't the only one to read it though....

malachii


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## So_Cynical (27 July 2010)

ROE said:


> I bought more a few days ago 4.44 no fear
> I now have  a very big holding in cab still room for a 2 more purchase
> 
> I write up later why if I have time, (too hard on the iPad) again the threat of small rivals always create more fear than facts good for buying it cheap
> ...




Monopoly's can only really go one way...like when your at the top of the mountain there's only 1 direction to go....cashless alternatives are on the increase, competition increase, technology on the increase.

I like business that dominate, but only when the barriers to entry are great, physical even better.


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## ROE (28 July 2010)

So_Cynical said:


> Monopoly's can only really go one way...like when your at the top of the mountain there's only 1 direction to go....cashless alternatives are on the increase, competition increase, technology on the increase.
> 
> I like business that dominate, but only when the barriers to entry are great, physical even better.




That how the market work  different people have different ideas and create different emotion that lead to distort in price, those who done the hard yard
and understand the business inside out are then willing to invest heavily when
the odds are in their favour.

let just say if you understand CAB 

cashless are superb for CAB, Cash is CAB enermy number 1 not small rival
but there are more to CAB than meet the eyes, you got to look at CAB as a whole
not a payment system ... there is no way rival can command the structure CAB has in place
and its structures has steady increase in the last 12 months even as the lawsuit and threat of rival
are about ...not many notice but some day they will


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## prawn_86 (26 August 2010)

NPAT and EPS down 6%. EPS of 47.8c for the Financial Year and final dividend of 17cps, keeping it at 34cps for the year

I have just doubled my holdings. Great company, yielding 8% at current prices


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## ROE (26 August 2010)

prawn_86 said:


> NPAT and EPS down 6%. EPS of 47.8c for the Financial Year and final dividend of 17cps, keeping it at 34cps for the year
> 
> I have just doubled my holdings. Great company, yielding 8% at current prices




You have strong conviction
some day it pay off
reading the report people has the same fear about cab
as they have with flight centre
some small time operator killing them hmmm sound scary

time will prove them wrong another wonderful
business got knock down due to fear and uncertainty


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## ryan_wheatland (26 August 2010)

I used to be married to this stock, however i am now having second thoughts about its future as every time i get into a taxi i quiz the driver on why they refuse to use the cabcharge terminal, instead pulling out a different terminal from either the glove box or somewhere else. Same old excuse is given, 'cabcharge broken'. Bullcrap, the majority of drivers would stick the knife in to CAB if they could. Very sad to see. Im worried about the long term trend. I hope they venture into payment terminals in other industries one day. Im predicting that in the near future they may have to start offering incentives to drivers, or lower the cut from the current 10%.


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## ROE (26 August 2010)

ryan_wheatland said:


> I used to be married to this stock, however i am now having second thoughts about its future as every time i get into a taxi i quiz the driver on why they refuse to use the cabcharge terminal, instead pulling out a different terminal from either the glove box or somewhere else. Same old excuse is given, 'cabcharge broken'. Bullcrap, the majority of drivers would stick the knife in to CAB if they could. Very sad to see. Im worried about the long term trend. I hope they venture into payment terminals in other industries one day. Im predicting that in the near future they may have to start offering incentives to drivers, or lower the cut from the current 10%.




Same excuse people said about they buy ticket online instead of Flight Centre. I buy ticket online too and I use cash to catch taxi and dont eat much of dominos pizza either prefer home made.

cases here and there doesnt prove much, got to look at the number behind the noises

CAB number is rock solid, from that number it tell me all these third party do bugger all
to their earning.....

these third party player maybe even lose money on this venture... dont know just a stab in the dark as their book are private...

but from what I know, cost of invest in new software and hardware isnt cheap, require a fair bit of capital and it need  big volume to generate profit and volume is what these little guys dont have.

so CAB can keep them at bay, squeeze their cash flow and things take care of itself and also a consolidate of a few players together is a sign of weak business, that they are not up  to the challenge on their own... Just like Vodafone merge with Three ....

Two ****ty business merge doesnt make it a good business.

ok enough talk I come back here in a few years and say hello


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## JTLP (26 August 2010)

prawn_86 said:


> NPAT and EPS down 6%. EPS of 47.8c for the Financial Year and final dividend of 17cps, keeping it at 34cps for the year
> 
> I have just doubled my holdings. Great company, yielding 8% at current prices




Hi Prawn,

Any reasoning for the double up aside from the yield? The numbers are down...chart is down...what's the rush?


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## prawn_86 (27 August 2010)

JTLP said:


> Hi Prawn,
> 
> Any reasoning for the double up aside from the yield? The numbers are down...chart is down...what's the rush?




Over the last couple weeks it has had minor support at $4.30. Picked some up just after open at $4.31 straight after reading the investor presentation, and the basis that people would realise all is still on track.

They meet all my criteria at $5, so anything less than that is cream for me.


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## prawn_86 (13 September 2010)

Up over 26% off its lows a few weeks ago with top holders continuing to increase their stakes.

Personally im up about 18% on capital gains plus a 7% dividend on my initial purchase from last year (will be more this year as i averaged down).

Happy to sit and hold for the longer term


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## JTLP (13 September 2010)

prawn_86 said:


> Up over 26% off its lows a few weeks ago with top holders continuing to increase their stakes.
> 
> Personally im up about 18% on capital gains plus a 7% dividend on my initial purchase from last year (will be more this year as i averaged down).
> 
> Happy to sit and hold for the longer term




Well done...and looks like im biting my own words. Has seen a pretty steep uptrend and wouldn't be surprised to see some profit taking around here. Although I was before and you're in the money prawn


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## Tatts (24 September 2010)

Went ex dividend today and were down 24 cents earlier in the day, checked back in and they are up 15%. They have settled their case with the ACCC paying $15 million


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## prawn_86 (24 September 2010)

Tatts said:


> Went ex dividend today and were down 24 cents earlier in the day, checked back in and they are up 15%. They have settled their case with the ACCC paying $15 million




Market certainly reacted well to the fac tthey have settled their case. Personally i think 15m is a bit steep, but im guessing CAB just wanted it over and done with


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## ROE (24 September 2010)

prawn_86 said:


> Market certainly reacted well to the fac tthey have settled their case. Personally i think 15m is a bit steep, but im guessing CAB just wanted it over and done with




Pocket change for CAB, a few months earning now they can go back and 

start growing again without having this distraction, watch the bus division next year and the year after, some surprise in store for the non-believer 

The rally may commence 

today announcement and big fat dividend cheque coming soon, nice start to the long weekend


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## ryan_wheatland (1 October 2010)

ROE said:


> Pocket change for CAB, a few months earning now they can go back and
> 
> start growing again without having this distraction, watch the bus division next year and the year after, some surprise in store for the non-believer
> 
> ...




Just when we thought it was all over red rover, slater and gordon and now trying to file a class action lawsuit with all of CAB's pissed off competitors jumping on the bandwagon. Will it ever end for Cabcharge! I wish these competitors would take their medicine and give up trying to compete.


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## ROE (1 October 2010)

ryan_wheatland said:


> Just when we thought it was all over red rover, slater and gordon and now trying to file a class action lawsuit with all of CAB's pissed off competitors jumping on the bandwagon. Will it ever end for Cabcharge! I wish these competitors would take their medicine and give up trying to compete.




Let them come..their cash flow will go to lawyers and not their business and CAB can just keep drag on and slowly bleed them 

Best way for big guy make small guys goes broke a little faster


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## So_Cynical (1 October 2010)

ryan_wheatland said:


> Will it ever end for Cabcharge! I wish these competitors would take their medicine and give up trying to compete.




When a monopoly operator over charges, provides a crappy service and behaves illegally, its really never going to end until its over...the ACCC will closely monitor CAB for anti competitive behaviour from now on, viewing all correspondence between CAB and other platform providers etc.

CAB is on probation and on notice that there must be change, and there admission of guilt has opened them up for litigation from party's claiming to have been disadvantaged etc.


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## prawn_86 (15 December 2010)

Big resistance at $6. Keeps coming up against it but can't break through. That said, it does seem to drop off much with each rejection.

Any chartists got an opinon on where it is at at the moment?


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## prawn_86 (16 December 2010)

Up 5% today and a clean break of $6 which it has struggled with over the last week. No new news, just the market starting to actually recognise the fact they are undervalued (hopefully)

Would love for them to head north of $7


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## prawn_86 (20 December 2010)

Break of $6 well and truely confirmed on highest volume in about 6 months. Will be interesting to see where the next resistance is

This has now become my 3rd best return if you take dividends into account


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## prawn_86 (24 February 2011)

Results out. Everything up between 5 - 10% except NPAT down 45% 

This was due to the results of the ACCC case and they say that the next period it will be back to normal. Even so they have reduced the divvy from 17c to 10c for this distribution.

Any other members thoughts?


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## VSntchr (25 May 2011)

Not much talk on CAB lately. Im going to do a bit of digging and see what I think about it...will report back later today perhaps..

Anyone else with any insights?


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## prawn_86 (25 May 2011)

VSntchr said:


> Anyone else with any insights?




Under-rated both here and by the market IMO. My average price is a touch over $4.50 so im happy collecting dividends


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## ROE (25 May 2011)

Still think the best still to come from CAB

and depend on what price you paid in the last 18 months you can sit back and get fairly reliable dividend on this baby for a while yet until the market catch up.

CAB has a lot of trick up their sleeves so watch this space


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## HarryH (25 August 2011)

Good showing of results from the 2011 data. Price continues to not be reflective of this though. What are other people's thoughts?


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## ROE (26 August 2011)

I bought more at $4.50 on Wednesday, 34c rock solid yield is pretty good while
you wait for the market to recognise this unlove stock, much like TLS when it hovering around 2.70-2.80

It will be love again 

I continue to accumulate business I know well and cheap..

the result actually is very good ...

they are growing and the market price for no grow or worse, competition hasn't made much inroad into its payment system.

I get feed back from people I know running taxi sometimes


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## prawn_86 (26 August 2011)

You and I are on the same page with this one ROE 

Buying anywhere under $5 represents a minimum 6% yeild, so not too shabby at all. Even my basic, most conservative analysis say this should be priced around the $6 mark.


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## HarryH (26 August 2011)

ROE said:


> I bought more at $4.50 on Wednesday, 34c rock solid yield is pretty good while
> you wait for the market to recognise this unlove stock, much like TLS when it hovering around 2.70-2.80
> 
> It will be love again
> ...




So you think CAB's market share remains unchanged? Do you think this new myki card proposal will have an affect?

I am quite surprised CAB was still able to keep ROE high despite the ACCC payment. Only thing so far I dislike is their UK investment. It's is a waste with them banking on a few weeks revenue from the Olympic games.


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## JTLP (4 October 2011)

Well CAB dropped below $4 for the first time in a long time...there was a bit of news around lately about how expensive cab fares are getting and how some people outright avoid them now due to cost pressures. I think it was in VIC where the fares hadn't risen in 3 years but some group wanted a 30% increase  ...don't know too many people who could afford that in this environment.

The installation of paywave etc will be a bonus but is it a buy at these prices....


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## robusta (16 November 2011)

Chairmans address from today

http://www.asx.com.au/asxpdf/20111116/pdf/422kjghtkkshdq.pdf

C'mon Reg stop beating about the bush and get up em.


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## ROE (16 November 2011)

I'm still bullish on CAB .. I bought some more at $4.50 then it went down 
$4.23 or something.

Time will tell I guess, I been averaging down for a while so with dividend and stuff 
wasnt too bad of an investment....I say some where break even while waiting for
the market to cheer CAB again...

sometimes the market just doesnt agree with you or you are wrong 

Reg is getting old, can't tolerate people bad mouth him and his business but I dont mind him at the helm 
he's a smart operator ..this year EPS should be better than last year I reckon...


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## HarryH (30 January 2012)

News today that Reg Kermode sold 47% of his CAB shares just before Half Year results are to be released. Doesn't seem like a good indication of things to come.


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## prawn_86 (30 January 2012)

HarryH said:


> News today that Reg Kermode sold 47% of his CAB shares just before Half Year results are to be released. Doesn't seem like a good indication of things to come.




This was news last week, and the H1 results are not due to be released until 23rd of Feb, so not right before.

It would be interesting to know why he sold half his stake though


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## HarryH (31 January 2012)

prawn_86 said:


> This was news last week, and the H1 results are not due to be released until 23rd of Feb, so not right before.
> 
> It would be interesting to know why he sold half his stake though




Last week? Really? Where do you get your news source from? 

A month before is close enough to "right before" for me. The half year is over, they release them on 23 Feb. He would know information on the company better than either you or I. Seems to worry me that he sells such a large amount of his holding.

Does anyone know the disclosure requirements (ie is he forced to disclose?) when someone of Reg's status sells their shares? I'm just wondering what he is playing at here. Why only sell 47%?


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## JTLP (31 January 2012)

HarryH said:


> Last week? Really? Where do you get your news source from?
> 
> A month before is close enough to "right before" for me. The half year is over, they release them on 23 Feb. He would know information on the company better than either you or I. Seems to worry me that he sells such a large amount of his holding.
> 
> Does anyone know the disclosure requirements (ie is he forced to disclose?) when someone of Reg's status sells their shares? I'm just wondering what he is playing at here. Why only sell 47%?




Dated 25/01/2012: http://asx.com.au/asxpdf/20120125/pdf/423yg76c0k334p.pdf

The guy is pretty old - and it was just a touch under $400,000 - we are not talking millions here. Maybe he wanted to buy a house? Upgrade a property? Blow money on his kids?

I wouldn't read that much into it.

Disc: Not holding but would like to


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## ROE (4 February 2012)

There are other directors on the board that has bigger stake in the business than Reg.

Reg get most of his earning from salary, the other director who owns their own taxi company has much much more skin in the game in Cabcharge holding... 

These guys would know more than Reg in term of Cabcharge day to day operations.

I wouldn't read too much into it ... plus he's doing it inside the blackout period so he would be stupid
to do it on a bad result ...he would get a lot of bad press for it something he doesn't like...


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## ROE (23 February 2012)

Great result, the stock about to get a re-rating 

Many good years still a head of CAB and each year the moat get a bit wider ...this year it added 2 more taxi company to the fold...

Paid reliable dividend
Great cash flow
Extremely reliable earning with small variation between cycle.
Toll Bridge to Taxi industries
and it's cheap...

what is not to like..??


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## prawn_86 (23 February 2012)

Just noticed this also. Dividend up 70% over previous period. Good times


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## Ves (23 February 2012)

Was trying to buy this at $4.30 on the last retrace. Changed my order to $4.35 the next day missed it by a cent or two. Kicking myself for worrying about a few cents here and there, when it will not matter in the long run. You live and learn.


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## ROE (23 February 2012)

Ves said:


> Was trying to buy this at $4.30 on the last retrace. Changed my order to $4.35 the next day missed it by a cent or two. Kicking myself for worrying about a few cents here and there, when it will not matter in the long run. You live and learn.




This is straight from Phil Fisher book (common stock, uncommon profit) I read some years ago...I still regards it as one of all time best book on stock investment...

Don't quibble over eighths and quarters.
After extensive research, you've found a company that you think will prosper in the decades ahead, and the stock is currently selling at a reasonable price. Should you delay or forgo your investment to wait for a price a few pennies below the current price?

Fisher told the story of a skilled investor who wanted to purchase shares in a particular company whose stock closed that day at $35.50 per share. However, the investor refused to pay more than $35. The stock never again sold at $35 and over the next 25 years, increased in value to more than $500 per share. The investor missed out on a tremendous gain in a vain attempt to save 50 cents per share.


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## HarryH (24 February 2012)

One thing I don't like is that they have taken on more debt to fund this contactless system. Balance sheet is starting to look a little more unhealthy. Not saying that it is unhealthy, just saying it looks a little more unhealthy than say 2 years ago.

Really not liking that their debt equity has increased to around 42%.

Plus EPS is actually a lot lower compared to Dec 2009. We all know why it was low in comparison to Dec 2010 (****ing ACCC) but even underlying profit in Dec 2010 was low. So increase of 11% underlying profit for Dec 2011 isn't saying much.

I mean still not bad overall, still on track to around 16% ROE (which has also declined). Just voicing my concerns is all.


----------



## Tysonboss1 (24 February 2012)

ROE said:


> This is straight from Phil Fisher book (common stock, uncommon profit) I read some years ago...I still regards it as one of all time best book on stock investment...
> 
> Don't quibble over eighths and quarters.
> After extensive research, you've found a company that you think will prosper in the decades ahead, and the stock is currently selling at a reasonable price. Should you delay or forgo your investment to wait for a price a few pennies below the current price?
> ...




Agree,

When discussing Wonderful companies eg. Great sustainable earnings, Great management, strong competitve advantages with expanable businesses able to take incremental capital at high returns. 

You can afford to over pay a bit if your holding time frame is long. When you look back the extra few percentage points you pay with seem like nothing.

Mind you though, this does not mean the value is not to be considered, though analysis is still required and you have to be able to look in the mirror and state reasons based on facts as to why you are paying that price.


----------



## Nutmeg (24 February 2012)

HarryH said:


> One thing I don't like is that they have taken on more debt to fund this contactless system. Balance sheet is starting to look a little more unhealthy. Not saying that it is unhealthy, just saying it looks a little more unhealthy than say 2 years ago.
> 
> Really not liking that their debt equity has increased to around 42%.
> 
> ...




I agree.


----------



## McLovin (24 February 2012)

HarryH said:


> One thing I don't like is that they have taken on more debt to fund this contactless system. Balance sheet is starting to look a little more unhealthy. Not saying that it is unhealthy, just saying it looks a little more unhealthy than say 2 years ago.
> 
> Really not liking that their debt equity has increased to around 42%.
> 
> ...




Interest cover is still 8.5x...Pretty safe margin.


----------



## Ves (24 February 2012)

ROE said:


> This is straight from Phil Fisher book (common stock, uncommon profit) I read some years ago...I still regards it as one of all time best book on stock investment...
> 
> Don't quibble over eighths and quarters.
> After extensive research, you've found a company that you think will prosper in the decades ahead, and the stock is currently selling at a reasonable price. Should you delay or forgo your investment to wait for a price a few pennies below the current price?
> ...




Thanks mate

I'm happy to have learned the lesson. It's entirely possible that, CAB, or any other of a number of quality businesses that are on my radar, will swing lower again with the market gyrations. 

Rather than trying pick bottoms (smelly fingers!), I am trying a monthly capital allocation or "averaging" approach. However, if I don't see value in any stock I will postpone to the next month and so on... thanks to Craft for encouraging that idea a few months back.


----------



## ROE (24 February 2012)

HarryH said:


> One thing I don't like is that they have taken on more debt to fund this contactless system. Balance sheet is starting to look a little more unhealthy. Not saying that it is unhealthy, just saying it looks a little more unhealthy than say 2 years ago.
> 
> Really not liking that their debt equity has increased to around 42%.
> 
> ...




Debt isn't bad provided it use wisely and its earning exceed its cost of capital ...
Business like WOW and CAB it's more efficient to use debt market than
going to shareholders for capital.

CAB return on capital far exceed its cost of capital so it use debt very wisely
and the capital intensive of the business is not from the cab side but from
the Bus side ...

I'm not a fan of bus business but the way it structure the deal with government is
so beautiful it assure continuously drive earning grow with virtually no risk 
so it can afford to pump capital into Bus but still get awesome return.

They are also very discipline buying other business, it has to make economic
sense and they wont pay any price to get it .... 

Also contact less is the way of the future they are right to invest in future technology
and stay ahead of the pack...nothing worse than a company being complaisant and stick
to old ways of doing things... CAB has always been at forefront of this in term of taxi technology

if you own a taxi which I know family member do, you see how Cabcharge system is way ahead.
their wireless fare update takes a few minutes, its rival you need to take to a service station and take
the taxi out of commission for a few hour to get it update 

so all in all CAB is one kick ass business now ...


----------



## prawn_86 (14 May 2012)

Just checked on these for the first time in many months. Good to see they are up near a 2 year high


----------



## HarryH (1 June 2012)

What a coincidence and a joke Fels' inquiry comes into this after CAB has a large rally when there was hardly any news on this company since the ACCC.

The ACCC incident IMO was a simple slap on the wrist so I wasn't too worried about that but I think Fels' proposal is going to materially hurt CAB's sustainability and profitability. Reducing the surcharge to 5% and these new licence reforms (which I feel is large part of CAB's moat) are my main concern. What are people's opinions on this?


----------



## Huskar (13 June 2012)

prawn_86 said:


> Just checked on these for the first time in many months. Good to see they are up near a 2 year high




Not anymore. Down 10% today. Is this because of Fels' inquiry? Legislative risk hits again...


----------



## HarryH (13 June 2012)

Huskar said:


> Not anymore. Down 10% today. Is this because of Fels' inquiry? Legislative risk hits again...




Not only that but also because the RBA announcment: 

http://www.rba.gov.au/payments-syst...-var-surcharging-stnds-fin-ref-ris/index.html


----------



## McLovin (13 June 2012)

HarryH said:


> Not only that but also because the RBA announcment:
> 
> http://www.rba.gov.au/payments-syst...-var-surcharging-stnds-fin-ref-ris/index.html




I could be wrong but CAB's system is not part of the payments system, they're merely a service that connect to the payment system, so that report doesn't concern them. They charge a fee for their service, not a surcharge through the payments system.

I have for a while thought that this business was a bit of sitting duck to government legislation, because the fees are pretty outrageous. I posted that last year sometime, must have been in another thread though because I can't see it in this one.


----------



## HarryH (13 June 2012)

Yeah and academics say the market is efficient. Sellers today probably didn't even read any of it but rather listened to the biased ramblings of that Michael Pascoe idiot.


----------



## ROE (13 June 2012)

Seriously CAB is an easy target, it big enough to target and small enough to screw it over and CAB CEO
is a private guy, he doesn't give interview, he doesn't talk about rumor, he shunt most people that want to do deal and milk them fee ...he prefer to do his own deal like Warren Buffett and they are successful.

You get a glim of him at AGM and he tell you how CAB did in the year to 30/06 and another kick ass dividend...

All that lead to a bit of a tall poppy syndrome for some people...

The regulators know they cant touch WOW,WES and the big 4 banks, they make a few noises here and there then disappear under the radar.

so they target someone like CAB, FLT etc.. to show that they are doing something...

You got to give credit to Reg that he build an incredible successful business that fairly impossible to penetrate.

even Mac Banks and Visa lost this game to CAB so the only thing they can do is keep attacking it with all sort of reform and try to weaken it.

but still CAB soldier on deliver rock solid dividend yield that can only be matched by a few very large business.

you got to see how CAB business structure to see its castle is surround by rivers, swamp, traps and if you are
someone who try to get in your probably dies at the gate.

time to hail a Taxi


----------



## McLovin (13 June 2012)

ROE said:


> The regulators know they cant touch WOW,WES and the big 4 banks, they make a few noises here and there then disappear under the radar.
> 
> so they target someone like CAB, FLT etc.. to show that they are doing something...




Exactly my thinking. The ACCC are useless when it comes to breaking up the duopolies and oligopolies in this country (the recent Metcash/Frankins thing was farcical) but they know companies like CAB are pretty easy.


----------



## ROE (13 June 2012)

McLovin said:


> Exactly my thinking. The ACCC are useless when it comes to breaking up the duopolies and oligopolies in this country (the recent Metcash/Frankins thing was farcical) but they know companies like CAB are pretty easy.




yeah this is a classic example, WOW and WES control most of the market and you wont let MTS get bigger to give them a decent chance of competition? and if WOW and WES decided to go Regional MTS need the scale to compete..

and FLT price fixing another easy target..

I havent seen them launch anything against WOW or WES or the big 4 

how many producers complain left and right WOW/WES use their market power to pay them bankruptcy price
for their produces and the tactics where small fruit shop open near woolies, woolies then sell stuff below cost
and drive the other guy out...

you dont see many small fruit/veg shop near Woolies any more ....I used to see them all the time
decades back...

Regulators maybe need a reform themselves


----------



## catfish (13 June 2012)

hey everyone,

Im failing to see CAB's competitive advantage at a glance. Can someone please explain why they are in a near  monopolistic position? Surely the technology is not the only advantage. 

And ROE you say CAB's best is still ahead of it, What do you mean by this? CAB seems resonably cheap at first inspection of its current business, although how can this company move further forward as it is already in a dominant position and is heavily targeted by regulators. It seems to me that the only way is down, involving loss of market share and some potential end to their dream run of charging this 10% fee on taxi payments.

It has been a great business, providing shareholders with great return but Im struggling to predict the furutre on thuis one.


----------



## Kulio (14 June 2012)

If I produce a product who the **** are you to tell me how much I try to sell it for? You don't like the fee I charge on my card? Then don't use it, simple.

Fel's inquiry holds no weight and he is just an old fool seeking attention.


----------



## ROE (14 June 2012)

catfish said:


> hey everyone,
> 
> Im failing to see CAB's competitive advantage at a glance. Can someone please explain why they are in a near  monopolistic position? Surely the technology is not the only advantage.
> 
> ...




CAB make money from its payment but its surrounding structure that make its payment unbreakable.

CAB owned the Radio network, each taxi has to sign up to a radio network, regulation requirement.

CAB owned dispatching system, all taxi must use the dispatching system one way or another

CAB owned the largest fleet of Taxi plate, they operate the largest taxi network, taxi repair, finance, training etc...

CAB develop their own payment system and own cabcharge vouchers (corporate accounts)

CAB EFPOST system is fairly impressive and high tech, the big 4 banks outsource some of the development to
CAB.... CAB one of the first to adopt wireless terminal now start to build traction in most retails.

Almost all taxi have to have a CAB payment system else they cant process Cabcharge vouchers
all this add up give CAB a very reliable earning stream.

In order for rival to break into CAB they must break into these area that CAB own and CAB wont let you in that easily.... They own the largest taxi fleet so they only put their CAB payment system in, 

Rival can have their own taxi fleet and put whatever system they want in there ... Massive Massive capital investment or Rivals entice independent operators to go with them and give them nice stuff like CAB give them like meters and EFPOST machines and again this required large capital investment.

so what CAB can do is wait for Rival to invest these large Capital investment initiatives then comes up with their own incentives that even beat its rival, its rival get ****ty return on capital and end of story.

CAB did this to Macquarie banks when they try to muscle into CAB taxi business, CAB bought up all the disable plates, Mac bank got shut out of the market operate at a loss and sell out to management which now becomes
Live Payments.

CAB also expand into bus now, it now account around 24% of CAB earning and grow at double digit every year
(that is why I say the best of CAB is yet to come..this market is still young CAB can takes on a lot more market share, installed their payment system and expand into other transport hub)

CAB can also buy the rest of the indepedent operators who dont want to run Taxi any more...again this give CAB scale, they just bought Yellow Cab in Adelaide for 4 million bucks

I can go on and on and on but that should be enough to get you started....

people can always pay cash and don't get quacked 10% finance service by CAB so I dont know what the hoha is about....they only charge 10% if you use cards because they have to process these cards, wear bad debts and make a bucks... Because they are so efficient at doing this and get large margin you penalise them???? it cost them money to installed these infrastructure and I found it ridiculous you wont let people make money from their investment in these infrastructure...

Run an airline you put in billions you make a few millions  put  ten of millions in CAB you get
the same return so why punish cab for having a far superior business...

I always pay cash catching taxi and I own CAB shares 

PS: I can tell you a bit more but I with hold some of this information for when the fear comes
I strike, Until that feared play out by the market and I get a bit more


----------



## Kulio (15 June 2012)

People are not dependant on the Cabcharge Card ie it's not a necessity as other options are available, so something I don't bloody understand is why any regulatory measures are even needed for their fee? Why is this in the inquiry? Why regulate the 10%? Makes no friggin sense to me. Why are they wasting time on this? Last time I checked predominant capitalism was in place. You use my service I charge you for it, simple.

Obviously the price of dildos does not need to be investigated because Fel's probably has one up his ass.


----------



## prawn_86 (15 June 2012)

Some good discussion in this thread 

CAB is in a strong position, and personally i think this latest peice of legislation will probably fizzle out, as most does. CAB seems fairly confident it can prove that its not a CC fee as such, more a fee for service as Kulio and others have said. Unlike airlines who charge you a specific amount to use a CC, no matter how much the original purchase is


----------



## JTLP (15 June 2012)

I was reading the Herald not too long ago and they had an article about shaking up the Taxi industry in Vic; something about lowering fares Mon-Thurs with increase on Fri-Sun, heavily reducing licensing fee's to enable more plate owners, only allowing plate owners to hold a certain amount etc etc.

Obviously these were all recommendations and nothing has come to fruition - but some food for thought.


----------



## prawn_86 (18 June 2012)

More owners mean more Cabcharge products in their CABs 

I was talking to a Melbourne cabby and he was saying they should all go on strike if those new lower fare rules come into play, so they aren't happy about the review


----------



## herzy (18 June 2012)

they seem to have taken on quite a lot of debt relatively recently. was that the adelaide acquisition? ROE, think that could be a problem in the future, combined with potential legislation impacting profits?


----------



## HarryH (19 June 2012)

prawn_86 said:


> Some good discussion in this thread
> 
> CAB is in a strong position, and personally i think this latest peice of legislation will probably fizzle out, as most does. CAB seems fairly confident it can prove that its not a CC fee as such, more a fee for service as Kulio and others have said. Unlike airlines who charge you a specific amount to use a CC, no matter how much the original purchase is




What legislation are you referring to? I don't see any current legislation affecting CAB in a bad way sorry.


----------



## prawn_86 (19 June 2012)

HarryH said:


> What legislation are you referring to? I don't see any current legislation affecting CAB in a bad way sorry.




Read through the last couple pages of this thread discussing propsed changes to legislation regarding credit card fees


----------



## HarryH (19 June 2012)

prawn_86 said:


> Read through the last couple pages of this thread discussing propsed changes to legislation regarding credit card fees




If you're referring to credit card fees as announced by the RBA then nope still don't see it.

ie basically trying to say I see talk of legislation but don't see how it really affects CAB


----------



## herzy (19 June 2012)

HarryH said:


> If you're referring to credit card fees as announced by the RBA then nope still don't see it.
> 
> ie basically trying to say I see talk of legislation but don't see how it really affects CAB




from what I understand, CAB receives a good part of its profits from the 20% CREDIT CARD SURCHARGE they put on cab fares. (arguable whether this is actually a credit card surcharge, but that's another issue)


----------



## HarryH (19 June 2012)

herzy said:


> from what I understand, CAB receives a good part of its profits from the 20% CREDIT CARD SURCHARGE they put on cab fares. (arguable whether this is actually a credit card surcharge, but that's another issue)




How about that, people actually use credit cards to pay for their cab fare.

Btw I'm pretty sure it's 10%, not 20%.


----------



## Ves (19 June 2012)

Someone may like to correct me, but from the 2011 financial statements:

Taxi service fee income was $87,328,000

Total income revenue / income was $184,542,000.   This is about 47% of all revenue.

However, this also includes payments that were not from a "credit card" (hence not considered a "surcharge" if there was some sort of leglislative risk?).  E-tickets, cabcharge cards, other cab dockets etc. must be outside of the scope of the new "surcharge" ruling by the RBA, surely?

I would be interested to know what impact on their NPAT a change from a 10% surcharge to a legislatively enforced 5% surcharge would have?


----------



## HarryH (19 June 2012)

Ves said:


> Someone may like to correct me, but from the 2011 financial statements:
> 
> Taxi service fee income was $87,328,000
> 
> ...




Cabcharge fastcard, e-tickets dockets etc should be outside of that RBA ruling. The onus is on NAB (the "acquirer" of the transaction) to enforce the rule on CAB for credit card surcharges. If NAB doesn't then Visa/Mastercard/or whichever credit card can fine NAB. I don't know about you but I'm pretty sure CAB wouldn't fine their bank for overcharging on their own card.

The above is just my opinion and I'm not a lawyer (so please correct me if I'm wrong) but the way I see it this legislation doesn't really affect CAB all that much.


----------



## herzy (20 June 2012)

Fair points HarryH and Ves, thank you!


----------



## prawn_86 (20 June 2012)

HarryH said:


> the way I see it this legislation doesn't really affect CAB all that much.




Pretty similar to what we have all said. New legisilation shouldn't affect CAB, but who knows, maybe it will, and that slight risk and uncertainty is what has caused the fall in share price. The market hates uncertainty, but if you are certain it wont be affected then perhaps it may be a good time to think about buying more?


----------



## HarryH (20 June 2012)

prawn_86 said:


> Pretty similar to what we have all said. New legisilation shouldn't affect CAB, but who knows, maybe it will, and that slight risk and uncertainty is what has caused the fall in share price. The market hates uncertainty, but if you are certain it wont be affected then perhaps it may be a good time to think about buying more?




Won't be buying more personally because it already takes up a larger percentage of my portfolio than the percentage I'm comfortable with. This ruling isn't going to cause me to do any panic selling either. Will be just enjoying the dividend yield from this company for the time being.


----------



## Kulio (21 June 2012)

prawn_86 said:


> Pretty similar to what we have all said. New legisilation shouldn't affect CAB, but who knows, maybe it will, and that slight risk and uncertainty is what has caused the fall in share price. The market hates uncertainty, but if you are certain it wont be affected then perhaps it may be a good time to think about buying more?




Speaking of buying, quite curiously if you look at the company announcements, Lazard has been on a buying frenzy since the 12/6 (the date RBA made the announcement). I wonder why that is.


----------



## ROE (2 August 2012)

Acquired Dean bus line in Canberra and Queanbeyan
Bus should now account for 30-35% of their earning 

another reliable long term earner due to long term government contracts


----------



## ROE (23 August 2012)

cant complain about the result today
dividend increase in line with profit increase...

The man everyone know on here was bagging out this stock not long ago on eureka report ....
I took the oppotunity to buy a bit more


----------



## prawn_86 (23 August 2012)

ROE said:


> cant complain about the result today
> dividend increase in line with profit increase...




Yeh i wish i held more stocks like this. SOlid earnings, consistent div, way better than money in the bank


----------



## ROE (23 August 2012)

Dean bus line also increase faire and offer less discount now
only one route qbyn to canb and that through dean bus line..


----------



## VSntchr (23 August 2012)

I have not read the entire report, but I see the company is quoting a 30% increase in NPAT. The only reason this is true is because of the litigation impact on last years earnings. Using normalised NPAT, the result is actually a drop in growth from last year...


----------



## ROE (23 August 2012)

VSntchr said:


> I have not read the entire report, but I see the company is quoting a 30% increase in NPAT. The only reason this is true is because of the litigation impact on last years earnings. Using normalised NPAT, the result is actually a drop in growth from last year...




The Company achieved a healthy normalised net profit after tax of $68.7m for the year, 
up 12.3%. This excludes the $15m ACCC settlement expense in FY11 and the $8.7m 
impairment charge on our investment in our Associate CityFleet UK in 1H12. 
Increases in operating expenses are in line with growth in our operating revenues and 
it should also be noted that the Company did not pay any bonuses to the KMPs during 
the year. Our reported NPAT for the year is $60m, up 30% on FY11.


----------



## VSntchr (23 August 2012)

ROE said:


> The Company achieved a healthy normalised net profit after tax of $68.7m for the year,
> up 12.3%. This excludes the $15m ACCC settlement expense in FY11 and the $8.7m
> impairment charge on our investment in our Associate CityFleet UK in 1H12.
> Increases in operating expenses are in line with growth in our operating revenues and
> ...




And thats why I should read the report before commenting


----------



## HarryH (23 August 2012)

Yet China data makes this stock go from being optimistic about CAB's results to being pessimistic? Sorry but what? Mr Market confuses me yet again.


----------



## Muschu (7 September 2012)

HarryH said:


> Yet China data makes this stock go from being optimistic about CAB's results to being pessimistic? Sorry but what? Mr Market confuses me yet again.




Seems to be going OK this month... so far!


----------



## Ves (24 September 2012)

Our old friend Neill Ford has sold over 1 million dollars of stock in the last week according to the Director's Interest notice.   Very interesting!


----------



## ROE (24 September 2012)

Ves said:


> Our old friend Neill Ford has sold over 1 million dollars of stock in the last week according to the Director's Interest notice.   Very interesting!




Look like Lazard mopping up most of that, good day to lodge notice on top of going XD


----------



## Ves (24 September 2012)

ROE said:


> Look like Lazard mopping up most of that, good day to lodge notice on top of going XD



They should stop buying soon.  They already have over 10%.  Perhaps I might get another buying opportunity... I've missed so many with this stock.


----------



## TikoMike (18 October 2012)

Anyone have any thoughts on the following article about the Allan Fels' Victorian Inquiry: 

http://www.smh.com.au/business/taxi-owners-cry-foul-over-proposed-reforms-20121009-27b8n.html

Personally I think he is not very smart. Instead of responding to the contents of Demir & Co's letter he responds with "The industry has had 18 months to provide information. I am suspicious of anyone who, after the inquiry is finished, submits information which is not exposed to scrutiny".

Honestly I shake my head to this imbecile.


----------



## McLovin (2 November 2012)

These apps actually look like a good idea. *If* they became popular they could definitely hurt CAB. I'll be trying it out this weekend.

http://www.smh.com.au/technology/te...sw-taxi-monopoly-in-doubt-20121102-28nv6.html


----------



## Knobby22 (2 November 2012)

I think CAB is a risky investment.
We are last to hear what decisions are made and the company can be severely affected by  government intervention and is subject to new disruptive technologies.


----------



## ROE (2 November 2012)

Trust SMH to write a fair article on CAB is like Julia said  there is no carbon tax under the government I lead 

they been an anti- cab for the last 4 years, each year they find something thing that would spread fear -

Uncle Reg has a defamation case against SMH so they arent about to write nice thing about CAB


----------



## McLovin (2 November 2012)

Knobby22 said:


> I think CAB is a risky investment.
> We are last to hear what decisions are made and the company can be severely affected by  government intervention and is subject to new disruptive technologies.




I agree. And these calls for more regulation keep popping up. CAB is an easy target for the government.


----------



## ROE (2 November 2012)

McLovin said:


> These apps actually look like a good idea. *If* they became popular they could definitely hurt CAB. I'll be trying it out this weekend.
> 
> http://www.smh.com.au/technology/te...sw-taxi-monopoly-in-doubt-20121102-28nv6.html




nothing new just fear mongering, they been around for a while and all cab rivals has similar apps
like gmcabs live payment and every else on the planet -

to hurts cab earth need to move if you understand cab business, cheap shop apps wont cut it....you need infrastructure which no one has except CAB that why all the competitor entering arent making much money.

they will try, they will make noises for a while then they will disappear quietly into the sunset until the next lot come along


----------



## TikoMike (2 November 2012)

So the downfall of Cabcharge will be phone apps? I would hardly think so. If it was Macquarie vs Cabcharge or Phone Apps vs Cabcharge I would bet money on Macquarie doing the more damage. Oh wait this already happened.

Try again SMH.


----------



## banco (2 November 2012)

Knobby22 said:


> I think CAB is a risky investment.
> We are last to hear what decisions are made and the company can be severely affected by  government intervention and is subject to new disruptive technologies.




I think you've got that the wrong way around.  They are very heavily dependent on government intervention and put a lot of effort into lobbying (or to put it more plainly rent seeking).


----------



## ROE (2 November 2012)

A country with rule of law required regulations, whether it's taxi or telco or bus or utilities or driving a car or buying a house.

you cant just give up regulation because some small time guy said I can do whatever I don't need regulation

they can applied for taxi license, radio network similar to CAB, nothing stopping them from doing it
they just want to pay nothing and get all the access ??

its like Telstra license some spectrum and some guy comes a long and said I can run my own spectrum we dont need
telstra license spectrum..


----------



## ROE (2 November 2012)

Let me dissect the fear mongering in the article

"Cabcharge's stock price would be 10 per cent of what it is now and that's why they're lobbying so hard because they've got an incredible amount to lose from us being successful."

30% of CAB earning is from Bus go nothing to do with taxi 
CAB hold various properties and taxi license worth in millions...they also operate their own cabs

the best these guys can do is eat a few percent into CAB business ...
10% of share price make it what 60c ? bus division is 17c EPS 
that makes it 3.5 times earning if you completely wipe out CAB taxi earning 

"The two companies said they had signed up 1000 and 10,000 drivers respectively and job volumes were increasing exponentially."

at this rate they will capture all of the CAB market shares in less than a few years 
including hundred of taxi owned by CAB?

Try again SMH


----------



## banco (2 November 2012)

ROE said:


> A country with rule of law required regulations, whether it's taxi or telco or bus or utilities or driving a car or buying a house.
> 
> you cant just give up regulation because some small time guy said I can do whatever I don't need regulation
> 
> ...




Does the phrase regulatory capture mean anything to you? Cabcharge are the poster child for regulatory capture.


----------



## McLovin (2 November 2012)

ROE said:


> Let me dissect the fear mongering in the article
> 
> "Cabcharge's stock price would be 10 per cent of what it is now and that's why they're lobbying so hard because they've got an incredible amount to lose from us being successful."
> 
> ...




CAB's taxis business is the bees knees, EBIT of $70m on $300m in assets. The bus business is asset heavy and low margin by comparison.

If something happens to their cosy taxi business then I can't see them trading at the same multiples for that asset heavy business.


----------



## TikoMike (3 November 2012)

McLovin said:


> CAB's taxis business is the bees knees, EBIT of $70m on $300m in assets. The bus business is asset heavy and low margin by comparison.
> 
> If something happens to their cosy taxi business then I can't see them trading at the same multiples for that asset heavy business.




Lower margin but higher volume and more reliant (reliant from an investor's POV) as people take their dependant routes each and everyday. The growing population doesn't hurt.


----------



## McLovin (3 November 2012)

TikoMike said:


> Lower margin but higher volume and more reliant (reliant from an investor's POV) as people take their dependant routes each and everyday. The growing population doesn't hurt.




All I'm saying is that the bus business requires a lot more heavy asset investment: $1b in assets generating $40m in NPAT. All other things being equal they will need $1b more invested in the business to generate an additional $40m in profit. Compare that to the taxi business. Buses maybe reliable and have a granular customer base but they are not anything like the money spinner that is the taxi business.


----------



## Ves (3 November 2012)

McLovin said:


> All I'm saying is that the bus business requires a lot more heavy asset investment: $1b in assets generating $40m in NPAT. All other things being equal they will need $1b more invested in the business to generate an additional $40m in profit. Compare that to the taxi business. Buses maybe reliable and have a granular customer base but they are not anything like the money spinner that is the taxi business.



Comfort Delgro (the JV partner) seems to earn a return close to it's long term cost of capital - which confirms what you are saying.   Cabcharge is a pretty mature business that spits off lots of free-cash flow, so to add to their existing revenue streams with any predicatably, it makes sense to expand the bus side of the business, even though, the long-term returns won't be as fantastic as the core taxi business. If they can acquire other bus companies at a discount the results won't be too bad, the real danger is over-paying (whilst using debt).

The current share price is still under my calculation of intrinsic value, and that is assuming that the new incremental capital invested going forward earns around 12%.  The margin of safety isn't as large as it has been of course.  

I think it's still a fairly good (but boring) investment.

EV / EBIT is still under 8x at Friday's close.  That's not ultra demanding for a stable business with some growth prospects.


----------



## ROE (3 November 2012)

McLovin said:


> All I'm saying is that the bus business requires a lot more heavy asset investment: $1b in assets generating $40m in NPAT. All other things being equal they will need $1b more invested in the business to generate an additional $40m in profit. Compare that to the taxi business. Buses maybe reliable and have a granular customer base but they are not anything like the money spinner that is the taxi business.




most of cab capital currently used are for building the fleet so you see low return, once that capex is done and out of the way of you will see very good return as all it left in maintaining the fleet 

The way cab structure government contracts not about people but how many km they driven each year...
by the time people see this stock it price would have gone the distance so see it before everyone else 

people will scratch their head and said I thought buses is low margin high capex, why Cab did the opposite -


----------



## TikoMike (8 November 2012)

Wow losing two routes and the market blows up, the hell?


----------



## prawn_86 (8 November 2012)

TikoMike said:


> Wow losing two routes and the market blows up, the hell?




Wow, only just saw the price since you posted. 

I dont like to catch falling knives, but any price under $5 historically has provided a great yield and capital gains for when it bounces up above $5


----------



## skc (8 November 2012)

TikoMike said:


> Wow losing two routes and the market blows up, the hell?




There's another bus route up for re-tender plus the Vic taxi inquiry due out anytime soon so looks like a bit of nervousness.

Feels like an over-reaction but I have no idea how much revenue and profit those 2 routes mean for CAB.


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## TikoMike (8 November 2012)

Besides the market overreaction on the losing the 2 routes (even though Comfortdelgro Cabcharge is still servicing for another year) people are most likely reacting to SMH's report on phone apps.

Ok so this is just my opinion on why phone apps with PayPal will not affect CAB all that much.

1. Like cash, PayPal on a phone app will be just another alternative way for people to pay for their taxi ride. Cabcharge has been battling cash for the last 30 odd years. In my not so humble opinion PayPal access will not make much of a dent.

2. Corporates and government usually don't supply credit cards or other forms of payment to most of their employees/surogates for taxi rides. Why the hell would you think they would supply a PayPal account for them to use?

3. Look at who the users of the phone app will be. People on the street will still use the old fashioned way to grab a cab (ie cabs going by with their roof light turned on)

4. The phone apps have been getting quite a few bad reviews with the driver not even turning up. Don't think I would want to pay from my PayPal account if the driver doesn't even turn up!

5. As ROE said earlier, SMH tends to scaremonger and give bad press when it comes to CAB or Reg Kermode. ie exaggeration of the actual facts and effects.

Like I said just my opinion, feel free to express your own logic.


----------



## McLovin (8 November 2012)

It looks a bit overdone considering it was the loss of two relatively small bus contracts. Then again, the previous NSW state government used to negotiate these contracts whereas the new government has introduced tendering. The Hills Bus routes are big for CAB's JV and they will go to tender early next year.


----------



## prawn_86 (14 November 2012)

Another negative article:
http://www.theage.com.au/business/clock-ticking-down-for-cabcharge-20121113-29adi.html

I still think that under $5 is good value due to attractive yields, but there does seem to be more regulatory risk coming into play these days. Although interesting to note that this is the 7th enquiry into the taxi industry in the last 30 years, so lots of inquiries but not much action


----------



## TikoMike (14 November 2012)

prawn_86 said:


> Another negative article:
> http://www.theage.com.au/business/clock-ticking-down-for-cabcharge-20121113-29adi.html
> 
> I still think that under $5 is good value due to attractive yields, but there does seem to be more regulatory risk coming into play these days. Although interesting to note that this is the 7th enquiry into the taxi industry in the last 30 years, so lots of inquiries but not much action




Regulatory risk these days? The only thing I see is if every bit of this inquiry goes through, that's the only regulatory risk I see. But hopefully they will see that most of the recommendations are ridiculous and created by some idiot academic


----------



## Ves (15 November 2012)

ROE said:


> This is straight from Phil Fisher book (common stock, uncommon profit) I read some years ago...I still regards it as one of all time best book on stock investment...
> 
> Don't quibble over eighths and quarters.
> After extensive research, you've found a company that you think will prosper in the decades ahead, and the stock is currently selling at a reasonable price. Should you delay or forgo your investment to wait for a price a few pennies below the current price?
> ...






Learned my lesson and fortunately eight months later I have another chance at these prices. Bought at market just before.  No bickering over a few cents this time.  Hopefully the negative sentiment remains for quite some time, I am more than happy to keep buying.


----------



## TikoMike (15 November 2012)

Ves said:


> Learned my lesson and fortunately eight months later I have another chance at these prices. Bought at market just before.  No bickering over a few cents this time.  Hopefully the negative sentiment remains for quite some time, I am more than happy to keep buying.




I bought some last week on Thursday, wish I waited to today to get an even bigger discount. All good though. Aberdeen and Lazard agree with you too with their mop up of 1mill+ shares each.


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## TikoMike (15 November 2012)

Been quite a few articles on here posting negativity about CAB so I thought I would post one of Professor Idiot Academic just for a bit of a laugh, enjoy:

http://www.ozcabbie.com/allan-fels-turns-gutter-tactics-on-against-oz-cabbie


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## Knobby22 (15 November 2012)

The market is going bearish.
Just wait till it turns. You are more likely to get a better price later.


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## ROE (15 November 2012)

I got some more today 

combination of regulation uncertainty and the lost of 2 bus routes

those 2 bus routes CAB doesn't earn much from them the hillbus route is the money making machine.
so it could be a blessing in disguised because they can recovered capital on those 2 routes and deploy
to other part of the business for better return.

Regulation uncertainty but current price I reckon more than factor in for any negative effect if any...

Remember CCV regulation uncertainty, people scream CCV could lose up 50% of the profit etc..etc..
look where CCV  now, top of the world and market darling...


----------



## prawn_86 (21 November 2012)

The trend is still down for the shorter term that is for sure. How many fundies are still buying as the price goes lower and lower??

Will $4 act as technical support level?

So many questions, so many different answers


----------



## Boggo (21 November 2012)

prawn_86 said:


> The trend is still down for the shorter term that is for sure. How many fundies are still buying as the price goes lower and lower??
> 
> Will $4 act as technical support level?
> 
> So many questions, so many different answers




The trend is down for the longer term too, it has lost around $10 since June 2007.
I am looking at a potential short term trade if it turns back up and finds support above 4.27, if that doesn't happen then the next target is 3.75. There are a few gaps on the last leg down and the market has a tendency to go back and overlap the gaps.
To get to 3.75 it also has to pass a significant level (low) on the weekly chart of 3.95 (support ?).

Its always fun watching how stocks behave at certain levels (TGA being another recently discussed example of predictable behaviour at various points).

Thats my  worth, daily chart below (click to expand).


----------



## skc (22 November 2012)

Something isn't right with these guys from 3:45pm. It was bouncing nicely today and then lost 8% in the last 15 minutes.

What's the news? Taxi inquiry out?


----------



## Boggo (22 November 2012)

Boggo said:


> To get to 3.75 it also has to pass a significant level (low) on the weekly chart of 3.95 (support ?).




Massive offload at the closing auction, took the 3.95 out easily.

It's now back at Nov 2004 prices !


----------



## prawn_86 (22 November 2012)

Boggo said:


> Massive offload at the closing auction, took the 3.95 out easily.
> 
> It's now back at Nov 2004 prices !




Nearly 600k worth of shares dumped in closing auction. Lets hope someone is just panicking and its not a case of someone knowing more than the market


----------



## TikoMike (22 November 2012)

prawn_86 said:


> Nearly 600k worth of shares dumped in closing auction. Lets hope someone is just panicking and its not a case of someone knowing more than the market




Maybe Mr Kermode sold the rest of his holding lol.


----------



## notting (22 November 2012)

You could hope it was the same guy who was playing RIO today at 12:25:grenade:


----------



## DocK (22 November 2012)

notting said:


> You could hope it was the same guy who was playing RIO today at 12:25:grenade:




I notice those particular trades on RIO had a code of EQ - Commsec tells me that this stands for Equity Combo but I can't find what that actually means.  Would appreciate an explanation, thanks.
Apologies for taking thread off topic


----------



## brty (23 November 2012)

Couldn't help myself. I bought a few thousand shares at 3.64. What is not to like about a 9.6% fully franked dividend of a company with good financials. Looking at the technicals, breaking the $4 looks bad, yet I wont be surprised to see a large reversal sometime soon.

As the company release basically stated nothing materially wrong, it would be a very bad look for directors to announce something bad next week, hence downside should be limited.


----------



## McLovin (23 November 2012)

Question: The RBA has said that taxi payments are not surcharges because the merchant (Cabcharge) is actually providing the payment system as a service. Does that mean CAB falls into state government legislation because it now falls outside the remit of the RBA? So the issues around its surcharging now become a prime target for the Fels inquiry. This would mean the SP fall is actually because the RBA has said CAB's business is outside the payment system.


----------



## skc (23 November 2012)

> The additional costs that the Bank considers are appropriate to include in the reasonable cost of acceptance are limited to those specified in paragraphs (a) to (e) below, where those additional costs can be separately identified and costed as a direct cost of card acceptance. The additional costs include and are limited to:
> 
> Merchants' own costs related to card acceptance. This cost category includes, and is limited to: the merchant's costs of purchasing and maintaining their own card acceptance infrastructure; scheme fees levied on the merchant by the scheme; and line rental and communications charges directly related to the use of payment card terminals.[2]




Footnote 2



> In cases, including some business models in the taxi industry, where the ‘merchant’ is a payment services provider that charges fees directly to the end-user, the reasonable cost of card acceptance would also include some allowance for the capital cost of the provider. In the case of the taxi industry, the Bank notes that the 2012 draft report of the Taxi Industry Inquiry in Victoria suggested regulating service fees so they did not exceed the resource cost of providing electronic payment services – i.e. excluding financial flows between processors, operators and networks – and found no evidence that this should exceed 5 per cent of transaction value.




So it reads to me that taxis should also falls under the "reasonable cost of acceptance" umbrella, regardless of how the charge is broken down between surcharge and other costs.


----------



## McLovin (23 November 2012)

skc said:


> Footnote 2
> 
> So it reads to me that taxis should also falls under the "reasonable cost of acceptance" umbrella, regardless of how the charge is broken down between surcharge and other costs.




Yeah I read footnote 2, which prompted my question. It seems almost as though the RBA is washing its hands of the issue and saying wait for the Victorians to say something. Given the tone of Fels in attacking the industry, I can't imagine a finding that is favourable to CAB's business. 

The next bit is what happens if Victoria mandates a price-cap of 5%. CAB won't look as cheap then even at these levels. I could easily see NSW following, they seem to just be waiting for Victoria.


----------



## Ves (23 November 2012)

McLovin said:


> The next bit is what happens if Victoria mandates a price-cap of 5%. CAB won't look as cheap then even at these levels. I could easily see NSW following, they seem to just be waiting for Victoria.



Have you done any work on earnings models if the 5% cap comes in?  I haven't had a look in a while, but I remember calculating about 25% earnings loss.

Which, means it is still on a P/E of 10.  That isn't bad for a quality business.


----------



## ROE (23 November 2012)

brty said:


> Couldn't help myself. I bought a few thousand shares at 3.64. What is not to like about a 9.6% fully franked dividend of a company with good financials. Looking at the technicals, breaking the $4 looks bad, yet I wont be surprised to see a large reversal sometime soon.
> 
> As the company release basically stated nothing materially wrong, it would be a very bad look for directors to announce something bad next week, hence downside should be limited.




Same load up a bit more today.
Market always over-react to negative news but we can only find out in hind insight.

but you cant get good price for stock if there are a lot of buyer


----------



## McLovin (23 November 2012)

Ves said:


> Have you done any work on earnings models if the 5% cap comes in?  I haven't had a look in a while, but I remember calculating about 25% earnings loss.
> 
> Which, means it is still on a P/E of 10.  That isn't bad for a quality business.




I haven't, sorry. To be honest, it's all so up in the air at the moment I don't know how to create a valuation that is anything more than speculative. FWIW, Macquarie is forecasting a 30% decline in EPS if the cap is put to 5%, which is about what you are saying, although they added the caveat that they don't really know what's going on. Also, they think that CAB will be captured by the RBA payments system.



> The RBA‟s announcement is at odds with Cabcharge's view that its
> business "applies fees on financial services rather than a surcharge on the
> underlying transaction". In our view the announcement provides a clear
> reference that taxis are caught under the Payment Systems Regulation Act.
> ...




Obviously make of the analyst report what you want. I don't take them as gospel but they are good for reference and to add a bit of colour to the discussion. I can PM you the full report if you want.


----------



## skc (23 November 2012)

Ves said:


> Have you done any work on earnings models if the 5% cap comes in?  I haven't had a look in a while, but I remember calculating about 25% earnings loss.
> 
> Which, means it is still on a P/E of 10.  That isn't bad for a quality business.




P.46 of last accounts... Taxi service fee income = $89.55m. 

So if you half that, I think it's more like 25% (~$40m) revenue loss. How much falls straight to the bottom line? I don't see much reduction in associated costs. Considering the NPAT was ~$60m, the earnings impact is massive if it comes to bear.


----------



## Ves (23 November 2012)

skc said:


> P.46 of last accounts... Taxi service fee income = $89.55m.
> 
> So if you half that, I think it's more like 25% (~$40m) revenue loss. How much falls straight to the bottom line? I don't see much reduction in associated costs. Considering the NPAT was ~$60m, the earnings impact is massive if it comes to bear.



Is the whole $90 mil included, though?  How broad is taxi service fee income?

Goldmach Sachs have a report, that someone posted snippets from on HotCopper, suggesting that the EPS change is more likely to be closer to 13% to 21% in 2014/2015.

So many conflicting views out there on what is concluded.

ROE do you have anything to add to this? Happy to do PM if you don't want it made public for whatever reason.


----------



## McLovin (23 November 2012)

Ves said:


> So many conflicting views out there on what is concluded.




From MBL



> What are the potential earnings impacts for Cabcharge? We have
> revisited our “worst-case” scenario analysis detailed in our June 2012 report
> titled “Game Changer?” assuming a reduction in surcharges become a reality
> for third party card processing (estimated EBITDA reduced by ~$20m or 30%
> ...




I'm happy to sit and wait, hopefully for you guys holding this ends up being more like MMS and it all blows over.


----------



## ROE (23 November 2012)

skc said:


> P.46 of last accounts... Taxi service fee income = $89.55m.
> 
> So if you half that, I think it's more like 25% (~$40m) revenue loss. How much falls straight to the bottom line? I don't see much reduction in associated costs. Considering the NPAT was ~$60m, the earnings impact is massive if it comes to bear.




That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
unless you can break down how much it make from transaction payment no one really know the impact
if there is any...

I think it will have some material impact but my feeling is the market over-reacting as I seen in dozen of case
of business I average down so I continue on this average down path 

$60m NPAT doesn't not derive from $89.55m taxi services, it's from 192m revenue


----------



## Ves (23 November 2012)

ROE said:


> That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
> unless you can break down how much it make from transaction payment no one really know the impact
> if there is any...



Thanks, I thought this was the case.  I will have another look over the weekend in more detail.


----------



## skc (23 November 2012)

ROE said:


> That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
> unless you can break down how much it make from transaction payment no one really know the impact
> if there is any...
> 
> ...




Yes you are quite right... There's not enough information to calculate the impact accurately. I simply took what data point was there and make the most pessimistic calculation. 

Total revenue $192m. Cost is whatever it is. Profit = Revenue - Cost. Reduce revenue by $40m (as being the worst case scenario) and hold the costs constant, you get a substantial (and worst case) impact on profits.

If I use that approach and still find CAB to be undervalued then it makes a good buy. Otherwise it's not yet a calculated good risk/reward. It's an adaptation of the "limit state design principle" from engineering.


----------



## brty (23 November 2012)

In 2007, The company had a cashflow of 28c/share and dividend of 30c/share. The share price was between $9.50 at the low point and $14 for the high. Interest rates were higher than today.
In 2012 the company had a cashflow of 58c/share and a dividend of 35c/share. If they were to lose 30% of cashflow it would still be nearly 50% above the 2007 level. A share price of 1/3 the 2007 level seems a little ridiculous.

All the bearish talk by some posters goes along with what is currently in the media, yet there is nothing materially different to what was known 3 weeks ago.

On the technical note it has lost nearly 40% of value from the close on 31st Oct, the move down has had several gaps, including the gap down today, my interpretation an exhaustion gap. Volume spiked to the largest in months, pretty much equal to the highest daily volume of the past year, my opinion, stopping volume. Considering most of the days trading was above the open price and it closed towards the upper end of the daily range, there is a high probability today was the low. 
IF Monday opens higher it is also likely there will be a quick retracement of this last move, while today's action will look like an island reversal.
All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.


----------



## craft (23 November 2012)

McLovin said:


> Obviously make of the analyst report what you want. I don't take them as gospel but they are good for reference and to add a bit of colour to the discussion. I can PM you the full report if you want.





Hi McLovin

Any chance you can shoot me the report.

You seem to have good access to broker reports - is that via work, subscription or ......

Cheers


----------



## McLovin (23 November 2012)

PM on the way craft.


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## ROE (24 November 2012)

brty said:


> All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.




I like this type of risk, a rock solid business facing a uncertainty and the market discard it like junk.
There are a few possibilities of upside to all these gloomy news.

I have to wait probably around 18-24 months months to see if that is the case.

in two years time it may prove today is the best day to catch a taxi


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## prawn_86 (24 November 2012)

I averaged down a bit early at around 4.50 but below $4 seems crazy to me and after having run my valuations agin im tempted to buy more Monday, this will be my biggest holding by far however if i do that.

No risk no reward i guess


----------



## craft (24 November 2012)

McLovin said:


> PM on the way craft.




Thanks



> 12-month price target: A$3.00 based on Sum of Parts methodology.




Sweet.....

There’s a lot of “can’t see the forest for the trees” around Cabcharge at the moment.  20 Years from now regulators will still be trying to contain Cabcharge due to the strength of their competitive position in the taxi industry. Even if the surcharge gets capped or the enquiries come up with some other punitave measure, they can just modify their revenue model – the competitive position enabling profit extraction really won’t be impacted that much.

Now if Maquarie would just lower their target to $2.00 following a bit more uncertainty from the Fels Taxi Inquiry then I might have to buy them a Christmas present.


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## prawn_86 (24 November 2012)

McLovin said:


> PM on the way craft.




I'd love a squiz too please mate


----------



## brty (24 November 2012)

Was having a chat with the minister of transport (Vic) at lunchtime today, completely forgot to ask him anything about the taxi enquiry, mind you even if we had discussed it, it would be inappropriate for me to have stated anything about it.

However, I should remind everyone that the current Victorian government is a business friendly one and that capping free enterprise is not on their agenda. Now if there was a left wing labour government, then things could be different.
When was the last time a right wing government proceeded with recommendations from a commission that were anti free enterprise? 
May I also remind everyone that the same set of recomendations include a 20% increase in fares at peak times to allow lower fares at other times. I don't think that recommendation will harm Cabcharge.


----------



## prawn_86 (27 November 2012)

brty said:


> On the technical note it has lost nearly 40% of value from the close on 31st Oct, the move down has had several gaps, including the gap down today, my interpretation an exhaustion gap. Volume spiked to the largest in months, pretty much equal to the highest daily volume of the past year, my opinion, stopping volume. Considering most of the days trading was above the open price and it closed towards the upper end of the daily range, there is a high probability today was the low.
> IF Monday opens higher it is also likely there will be a quick retracement of this last move, while today's action will look like an island reversal.
> All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.




Looks like the first half of this analysis is playing out. Volumes yesterday and today much lower than Friday and the price creeping back up towards the $4 mark. 

Personally i have bought more and this is my biggest holding now, with an average price slightly over $4


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## clinta44 (27 November 2012)

Some bed time reading about the legislative issues surrounding Cabcharge.

You can read the draft report from the VIC taxi inquiry and its recommendations, here - http://www.taxiindustryinquiry.vic.gov.au/ 

as well as the Variation to the surcharging standards, here - http://www.rba.gov.au/payments-syst.../201206-var-surcharging-stnds-fin-ref-ris.pdf


----------



## TikoMike (27 November 2012)

clinta44 said:


> Some bed time reading about the legislative issues surrounding Cabcharge.
> 
> You can read the draft report from the VIC taxi inquiry and its recommendations, here - http://www.taxiindustryinquiry.vic.gov.au/
> 
> as well as the Variation to the surcharging standards, here - http://www.rba.gov.au/payments-syst.../201206-var-surcharging-stnds-fin-ref-ris.pdf




Old news. Reset the last few pages and you'll see it has been discussed.

On another topic, seems to be a lot of the major shareholders on a November buying frenzy.


----------



## Ves (28 November 2012)

Reg Kermode.  Another good AGM address.  Some telling comments. 

I topped up some more when the market opened this morning.


----------



## TikoMike (28 November 2012)

Ves said:


> Reg Kermode.  Another good AGM address.  Some telling comments.
> 
> I topped up some more when the market opened this morning.




The part where he talks about people accusing him of being recluse made me laugh.

Seems like he's also hinting, in a subtle way, at a few things in regards to all the media bullcrap and the outcome from it.


----------



## ROE (28 November 2012)

The guy doesnt mess around he goes straight to the point 

CAB been charging 10% since before the surcharge introduce in 2003, so how can it fall under the surcharge law as this is their business practise way before the surcharge introduction...

so I reckon they can take this stuff to court and win as this legislation seems to design to limit its earning ability which I think unconstitutional.


----------



## McLovin (28 November 2012)

ROE said:


> so I reckon they can take this stuff to court and win as this legislation seems to design to limit its earning ability which I think unconstitutional.




It's the vibe of the thing...

http://www.youtube.com/watch?v=ssukL9a99JA

Unfortunately, regulating prices is not unconstitutional.


----------



## ROE (28 November 2012)

I call on the Mabo the right of CAB to charge finance fee of 10%


----------



## clinta44 (29 November 2012)

It was an odd AGM that's for sure, but I think Reg seems like a knob of the highest order! 

He still fails to mention he paid way over the odds for CitiFleet and that he's been heavily selling for years, just in the last two years he has sold 681,928 shares! 

He is constantly talking up how good the company is yet is heavily selling, I'm starting to wonder who is the "Pigeon" and who is the "statue"? 

But then to to top it off, they get a second strike from there shareholders over remuneration! But CAB actually have one of the better ones going around, There is no LTI plan and they have not been paid any STI for 2 fin years!


----------



## McLovin (29 November 2012)

When CDC lose a bus contract, what happens to the buses? I assume if they have nowhere else to deploy them they are handed over to the new contract owner?


----------



## Smurf1976 (29 November 2012)

I don't know about buses but in the outsourced maintenance industry it's not unusual to see staff, machinery and sometimes even yards / offices transferred to whoever wins the contract. I'd assume it's the same with buses?


----------



## brty (30 November 2012)

A couple of directors have stumped up some cash to buy more shares. $60k and $40k are not huge bets, but not peanuts either. This is usually a good sign that they don't see much further downside. If they had only bought a few shares each that would have been a bad sign.


----------



## TikoMike (30 November 2012)

You know just my opinion but if they wanted to be smart, now is the right time for CAB to do a huge buyback of their own shares.


----------



## jancha (30 November 2012)

brty said:


> A couple of directors have stumped up some cash to buy more shares. $60k and $40k are not huge bets, but not peanuts either. This is usually a good sign that they don't see much further downside. If they had only bought a few shares each that would have been a bad sign.




BLY directors did the same. Have a look at their chart and see where they went after they bought.
You could be right although it's a different company the results may be the same.


----------



## prawn_86 (10 December 2012)

Sky hasnt fallen for CAB yet and as such shares have started to grind upwards, now holding well above $4. Just on my average buy price now (not including the dividends i have earnt over the years)


----------



## brty (10 December 2012)

Victorian government today announced they would table the taxi inquiry report on Wednesday, yet they will defer their response until after Christmas. Sharemarket reacted positively today, possibly in anticipation of this news.


----------



## JTLP (20 December 2012)

brty said:


> Victorian government today announced they would table the taxi inquiry report on Wednesday, yet they will defer their response until after Christmas. Sharemarket reacted positively today, possibly in anticipation of this news.




What ended up happening with this?

I see on a few news websites that they are saying that Cabcharge is under the pump from other companies applying to the RBA etc for their EFTPOS machines to be included in taxis. As well as this - competition from apps/paypal etc (which sounded pretty complicated in the article) should help to simplify.

Apparently the changes - if any - will take effect in March. Does anybody know otherwise?

ON A SIDE NOTE
I bought tickets to the Bruce Springsteen concert a few weeks ago (YES!) and if people think they are getting rooted by Cabcharge - they should take a look at Ticketek charging you the princely sum of $5.20 to receive tickets to your e-mail . Now that is a rip!


----------



## brty (20 December 2012)

This,



> The government's formal response is not due until April, two years after the inquiry began.




from here...

http://www.theage.com.au/opinion/ed...als-demand-genuine-action-20121216-2bhuc.html

Cabcharge have consistently stated that the RBA changes will not effect them. It will probably end up in court and take years to sort out. 

Good income earning companies do not come cheap unless there are some headwinds.


----------



## prawn_86 (16 January 2013)

Still in a slow grinding uptrend at around the 4.50 mark currently. Hopefully it can keep heading north towards $5.

Any TA out there on this?


----------



## systematic (16 January 2013)

prawn_86 said:


> Still in a slow grinding uptrend at around the 4.50 mark currently. Hopefully it can keep heading north towards $5.
> 
> Any TA out there on this?




I currently have it as setting new lows.


----------



## prawn_86 (16 January 2013)

systematic said:


> I currently have it as setting new lows.




Care to explain why that is? Themore analysis here on ASF the better and the more other people will comment


----------



## systematic (16 January 2013)

prawn_86 said:


> Care to explain why that is? Themore analysis here on ASF the better and the more other people will comment




Hey prawn_86,

For me...

- CAB is not too bad (but nothing special) on value (which I wasn't referring to)
- Unable to make a new momentum high since about 8 months ago
- Falling momentum about 7 months ago, with a more significant fall about 2 months ago...
- ...which (on a positive) hasn't continued, but the recent move up hasn't yet done enough to turn that around.


----------



## prawn_86 (25 January 2013)

Up about 4%. That is a nice little uptrend that has developed since late November, anyone who bought under $4 would have to be pretty happy right now.

Analysis wise it is still much of the same. Until there is some actual regulatory change from an indecisive government it doesnt seem as though much should change from an earnings perspective


----------



## brty (25 January 2013)

I am very happy with my investment in this stock. Yesterday and today's action of a bit of a break out on higher volume than the last month looks very bullish to me. Immediately I look for where it could technically end; the two most obvious points are just below $5, where there was a gap on the way down or back at the $5.75 level, a full retracement of the move.

As I'm expecting the half year report to show pretty much BAU, especially as there has been no warning to the market about otherwise, then if Cashflow were in the 26c-32c range and dividend 16c-20c range, I would be looking at the $5.75 level as the next possible speedbump.

brty


----------



## JTLP (4 February 2013)

After hitting $5 on Friday - managed to push through $5 today to $5.05 before finishing the day 5 cents down at $4.88. Does this mean anything from a tech point of view - the break and retrace through $5?

Volume was higher than normal today also.


----------



## ROE (4 February 2013)

keep buying when it keep hitting new low and enjoy dividend galore...
one day, regulation, reform or something or other get sorted it out then that day will come
by then dividend probably paid back your capital and then it  may do a TLS run.

I first heard taxi license plate reform some 10-12 years ago
when the noise start everyone flock off cheap taxi plate, damn those who bought
them 10-12 years ago for 150K to 200K a pop.

now you got all your capital back in lease payment and a bit more ...and now enjoyed 12-20% yield 
on your plate from that initial investment and they still talk about taxi plate reform today


----------



## brty (20 February 2013)

Sold my stake in this today, for a handsome profit. 

I've noticed quite a few companies have been reporting within market expectations and getting smashed. Should it happen here then I will repurchase at the right price. I also sold a variety of other companies stock for the same reason.


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## Garpal Gumnut (20 February 2013)

I have avoided Cabcharge.

I have a number of mates who own and drive taxis.

Of all the industries in Australia this is most prone to a black swan event.

The deregulation of the taxi industry and the end of a monopoly by a few over licenses.

gg


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## prawn_86 (21 February 2013)

Half Year report out this morning.

Revenue up very slightly
EBITDA up 20%
Reported NPAT 33.3m (up 28%)
Underlying NPAT down 3.7% 

EPS of 27.7 cents

Interim dividend increased to 18cps. Assuming no increase in final dividend this is giving a yield of 7.6% before franking credits at current prices


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## ROE (21 February 2013)

Decent result continue to hold for dividend galore


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## JTLP (21 February 2013)

ROE said:


> Decent result continue to hold for dividend galore




I actually sold 2/3 of my holdings at $4.94 (on the way up - not today) - made some decent money having bought under $4 - glad I jumped out but dividend on the remaining 1/3 should be nice


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## prawn_86 (26 March 2013)

I'm completely out today. Just a gut feel that it will continue lower.

Its been a great stock for me and i have loved the dividends, but i think there is more downside risk at the moment. The fact it was also my biggest holding means i need to do some re-balancing. Might look to re-enter below $4 if it gets there again.


----------



## JTLP (27 March 2013)

prawn_86 said:


> I'm completely out today. Just a gut feel that it will continue lower.
> 
> Its been a great stock for me and i have loved the dividends, but i think there is more downside risk at the moment. The fact it was also my biggest holding means i need to do some re-balancing. Might look to re-enter below $4 if it gets there again.




Fair enough - as I mentioned earlier I carried my profits after selling at $4.94...waiting to see the outcome of the taxi inquiry. Personally I can't see much changing - although I did note VISA was bringing in some fee changes to drastically reduce fees on theirs cards for holders.



> Hefty credit card surcharges could be on the way out after Visa became the first company to ban Australian retailers from slapping on the fees.
> 
> The new rules follow a Reserve Bank of Australia review and give credit card companies the power to force retailers to limit what they charge consumers to use credit and charge cards.
> 
> ...


----------



## VSntchr (14 April 2013)

Anybody have access to any research or information as to what VISA has actually done with their changes?

Seems to be BAU judging by a lack of any announcements from CAB...


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## banco (14 April 2013)

Garpal Gumnut said:


> I have avoided Cabcharge.
> 
> I have a number of mates who own and drive taxis.
> 
> ...




From your lips to God's ears. Even cabcharge's highly paid lobbyists won't be able to hold back the tide of smartphone apps etc. forever.


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## ROE (15 April 2013)

banco said:


> From your lips to God's ears. Even cabcharge's highly paid lobbyists won't be able to hold back the tide of smartphone apps etc. forever.




If these guys own taxi network and taxi plates yes....cab own a lot of taxi and they only have cabcharge stuff in
Not much these guy can do - ....plus 5% maybe a blessing in disguse like CCV reform...because Small player will be broke and they once again own the market....at this price little down side but plenty lf upside....


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## McLovin (15 April 2013)

Only slightly related, but I've started using Uber (smartphone app that lets you book hire cars) it's fantastic. It's not that much more expensive than a cab and it's a level above service wise. It's not going to kill off the cab industry but I highly suggest trying it.

Generally speaking though, I pretty much only use GoCatch to get my taxis these days. Far more reliable than booking with the radio operator. CAB will probably fix that by improving their service.


----------



## tinhat (28 May 2013)

CAB is getting slaughtered this morning. It's in freefall. $4.25 as I type down 13%


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## DocK (28 May 2013)

http://www.theage.com.au/victoria/cabbies-pay-set-to-jump-in-taxi-shakeup-20130528-2n87p.html


> Major reforms include giving taxi drivers a guaranteed 55 per cent of the fare box in a bid to raise driver income, and introducing an independently run driver knowledge test for all drivers.
> 
> *The cost of paying for a cab by eftpos will be slashed 50 per cent, from 10 to 5 per cent of the fare.*
> Advertisement
> ...



Read more: http://www.theage.com.au/victoria/c...axi-shakeup-20130528-2n87p.html#ixzz2UXrMkJaJ

The sentence I've bolded is no doubt what's affecting cabcharge......


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## ROE (28 May 2013)

I jump in with another 4000 shares during free fall to $4.00. - while people still digest and panic kicks in ...


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## McLovin (28 May 2013)

Wow. That is worst case scenario for CAB. The reduction in plate fees is cray cray.

Summary, from the article DocK linked to



> Reforms in summary
> 
> Consideration of variable pricing with higher fares in peak periods
> Moves to increase the flagfall and reduce the price per kilometre for the metropolitan zone to address short-fare refusal and inefficient behaviour such as airport overcrowding
> ...


----------



## skc (28 May 2013)

DocK said:


> http://www.theage.com.au/victoria/cabbies-pay-set-to-jump-in-taxi-shakeup-20130528-2n87p.html
> 
> Read more: http://www.theage.com.au/victoria/c...axi-shakeup-20130528-2n87p.html#ixzz2UXrMkJaJ
> 
> The sentence I've bolded is no doubt what's affecting cabcharge......




IMO the killer is this.



> 1. Taxi Permit Holders no longer required to affiliate with a taxi network. They will be free to join one or more Authorised Taxi Organisation or operate independently. This opens the gates for new taxi booking apps such as InGoGo to gain a legitimate foothold in the market. We view this as by far the biggest impact on Cabcharge out of all of the inquiry recommendations. Technology change via new taxi booking apps and smart phone payment processing systems is now a very real threat to traditional taxi networks as well as payment processing terminals.




This from an analyst's view.


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## galumay (28 May 2013)

ROE said:


> I jump in with another 4000 shares during free fall to $4.00. - while people still digest and panic kicks in ...




Thats big cahones ROE, considering their entire business model has been pretty much unwound with these changes!


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## McLovin (28 May 2013)

skc said:


> IMO the killer is this.
> 
> 
> 
> This from an analyst's view.




Those apps are fantastic. I use GoCatch all the time and if there's no cabs around jump on to Uber and get a hire car. Most cab drivers I've spoken to don't use the radio network at all. It's apparently unreliable and it costs them a fortune.


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## VSntchr (28 May 2013)

Surely holders must be getting sick of these repetitive negative news outbreaks resulting in massive slumps.

This one seems to have a bit of substance to it. Will be interesting to see the companys review and expected impact...


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## ROE (28 May 2013)

galumay said:


> Thats big cahones ROE, considering their entire business model has been pretty much unwound with these changes!




I done the number crunching - I buy without fear ....
There are always risks but stock trades cheapeast when people see it has no future 

I like the $22,000 index to inflation rental  price for a start, make cab massive taxi plate collection invaluable and goes on to eternity with no up keeping cost -


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## TikoMike (28 May 2013)

McLovin said:


> Those apps are fantastic. I use GoCatch all the time and if there's no cabs around jump on to Uber and get a hire car. Most cab drivers I've spoken to don't use the radio network at all. It's apparently unreliable and it costs them a fortune.




I don't see these apps having much of an effect. I work in a large private accounting firm and whenever travel gets mentioned Cabcharge dockets also get mentioned whether it be from financial planners or accountants visiting clients, seminars, meetings, lunches etc. Peter Slipper the politician didn't get in trouble via his PayPal account on a InGogo app. It would be one for the record books if a 1.5 mill business destroys a 600 mill business. It'll also be the day corporates and governments give PayPal accounts to their employees.


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## Sean K (28 May 2013)

About time we stopped getting raped by this company. What a tort it has been for far too long. The 10% charge might have been relevant in the very early days, but when I can do banking transactions on my iPhone anywhere, anytime, it's just ridiculous. You're going to become a dinosaur CAB. You should have seen it coming.


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## McLovin (28 May 2013)

TikoMike said:


> I don't see these apps having much of an effect. I work in a large private accounting firm and whenever travel gets mentioned Cabcharge dockets also get mentioned whether it be from financial planners or accountants visiting clients, seminars, meetings, lunches etc. Peter Slipper the politician didn't get in trouble via his PayPal account on a InGogo app. It would be one for the record books if a 1.5 mill business destroys a 600 mill business. It'll also be the day corporates and governments give PayPal accounts to their employees.




The apps are a couple of years old, their effect on the industry probably won't be known until the end of the decade. I doubt they will become the number 1 payment system, and I doubt that in 2-3 years time they will still be running off Paypal (Uber already directly bills your cc), but they could certainly shake up the juicy returns CAB earns on its payment system. And that's the important bit.

Management could probably take a few tips on how to finesse government a bit better too. They always seem to come off as abrasive and arrogant, much like a former CEO of Telstra. The government can make your life very difficult.


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## Sean K (28 May 2013)

McLovin said:


> Management could probably take a few tips on how to finesse government a bit better too. They always seem to come off as abrasive and arrogant, much like a former CEO of Telstra. The government can make your life very difficult.



When anyone has a monopoly, this is the result. Whether it is the political will, or the social will.


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## ROE (28 May 2013)

The reform will be a good thing...get it out ...close the chapter...and let start planning business around it...hire and 

fire the people need to do the job...Reg wont be around for much longer so I say time to bring in some new blood 

maybe a short term hit to earning but long term I think CAB will be right....


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## banco (28 May 2013)

One of the worst companies in Australia in terms of regulatory capture and rent seeking.  Looks like one state has finally broken free.


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## Knobby22 (31 May 2013)

Some support today to just below $4.00.
Long term earnings are going to drop. I therefore think it will stabilise sub $4 then drop during the reporting season to $3.50. Might be good value at that stage.


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## DJG (31 May 2013)

ROE said:


> I jump in with another 4000 shares during free fall to $4.00. - while people still digest and panic kicks in ...



Do you believe the core of the business is still the same even after these changes?
How do you believe the will increase profits from here?


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## ROE (31 May 2013)

DJG said:


> Do you believe the core of the business is still the same even after these changes?
> How do you believe the will increase profits from here?




Core of the business will still the same, earning impact of course but stock price already price for it and more...
their bus division is growing at a healthy clip and I say they could be earning 30 plus cent not far from now

Assume the worse reduce taxi earning by 50-60% not factoring in their smaller rival may not be viable with 5% charge..and they reclaim the market share... (it cost a fair bit to have the payment terminal in the taxi, without volume and 10% charge small player cant justified the upfront capital as they have no other source of revenues)...

Just like small loan sharks, with the Cap on interest rate lending they cant handle it and CCV take the whole market...

going forward CAB can still earn 30c plus worse case scenario ...healthy dividend at this price even if it was to cut by 50-60% ...not much down side in my view with the price been trading last few days ....I been buying.

now we know what the regulations and reform are, it easy to play with different scenario and CAB has certainty and they can now get on with how to tackle it ...and hopefully in time they can find their footing again and start growing again ....there are avenues for CAB to grow, it's not all doom and gloom......more taxi and easy to get taxi plate...more taxi driver training, insurance, finance and compliance ...CAB has a dipped in all those area....there are many many bus routes CAB can grow....CAB can accumulate more taxi related business...etc... 

All analyst claim doom and gloom when TLS is losing the copper line and when CCV face with Cap interest rate..
Negatives news sell better  I like stock price when people see there is no future for it.....it is always at its cheapest..


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## rbgmauq (31 May 2013)

CAB has an ongoing P/E of 7.14, which indicates that it is undervalued.


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## Huskar (2 June 2013)

ROE said:


> Core of the business will still the same, earning impact of course but stock price already price for it and more...
> their bus division is growing at a healthy clip and I say they could be earning 30 plus cent not far from now
> 
> Assume the worse reduce taxi earning by 50-60% not factoring in their smaller rival may not be viable with 5% charge..and they reclaim the market share... (it cost a fair bit to have the payment terminal in the taxi, without volume and 10% charge small player cant justified the upfront capital as they have no other source of revenues)...
> ...




CAB has been sheltered for so long that management has shown little initiative and a lot of truculence. I agree that longer term these reforms look good for the taxi industry generally (in Victoria first, with other states now likely to follow). If the taxi industry benefits the main player is likely to benefit, provided management can show some nous rather than emu-like putting their head in the sand...

As you say ROE it kinda reminds me of CCV but also ORL and BRG, once their formerly cushy cash cows are forcefully removed the uncertainty is removed and the real core of the business can shine through.

I think there is value here but how long it will take for that value to be realised is another question..


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## Knobby22 (5 June 2013)

Here comes the drop to $3.50 I mentioned. ($3.89 as I type this).
The question is should I be buying it at that stage. The yield will be very attractive. Growth prospects -not very.


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## Knobby22 (28 June 2013)

I predicted $3.50 but it only got down to $3.75 and has popped up for air above $4.00.
I know, its the yield but I struggle to value the company as being worth this as I expect no growth.
The competition is only going to get stronger to this enterprise and the other states should follow Victoria. Risky hold imo.


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## galumay (17 September 2013)

CAB has steadily drifted down from around $4.50 down to under $4 in the last month. I haven't seen anything to cause this sort of fall. Its definitely moving against the market, I am happy to hold but interested to understand the negative sentiment.


----------



## skc (17 September 2013)

galumay said:


> CAB has steadily drifted down from around $4.50 down to under $4 in the last month. I haven't seen anything to cause this sort of fall. Its definitely moving against the market, I am happy to hold but interested to understand the negative sentiment.




For a good number of years, CAB hasn't moved inline with the overall market like other industrials.

A chart of 5 years shows large share price swings (20%+) at fairly regular intervals (2-3 times a year) so it's a decent trading stock, but the overall return has been negative over this period for long term holders.

There's a recent article on AFR about new apps targeting the taxi market with backing from James Packer and other notable people. That may or may not be the explanation for the recent weakness.



> The challenges facing traditional operators like Cabcharge have been highlighted by the calibre of investors now pouring money into rival tech start-ups like goCatch and Uber, which use smartphone applications to book and pay for taxis.
> 
> James Packer and SEEK co-founder Paul Bassat, two men who realised early on that on-line recruitment was going to give newspapers a run for their money, are injecting money into goCatch.
> 
> Google grabbed headlines last week with news it was investing $US258 million ($276.68 million) in Uber, although this has a lot to do with its plans to break into the self-driving car business rather than a simple bet on the power of taxi booking apps. Silicon Valley start-up Uber, which launched in Sydney in November, lets users book and track a private car using a smartphone app.




http://www.afr.com/p/business/companies/traditional_taxis_hit_by_change_DhDqV8e6Qfe2fKlpQPLOaM


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## galumay (17 September 2013)

skc said:


> For a good number of years, CAB hasn't moved inline with the overall market like other industrials.
> 
> A chart of 5 years shows large share price swings (20%+) at fairly regular intervals (2-3 times a year) so it's a decent trading stock, but the overall return has been negative over this period for long term holders.
> 
> ...




Thanks SKC, I wasnt aware of its lack of synch to the overall market.

I did read the article, but I didnt really think this was likely to have effected the market, the apps have been around & others in development for quite a while. I think the effect was already seen in last years results and while they will have a place in the industry I dont think they will have much more impact on the Cabcharge business. 

Anyway its a good test for me - the first stock in my portfolio to move into negative territory!


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## TikoMike (17 September 2013)

Despite all the negative *sentiment* news and one piece of negative news (VIC 5%) CAB is still a cashflow monster.


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## Pioupiou (26 September 2013)

I have no problem valuing CAB within the range of $3.00 to $4.00, so the $3.50 midpoint seems reasonable.  This is based on a range of dividends starting at 30 cents, and either not growing, or growing very slowly (say 2.5% per year).  I would highly appreciate some feedback on what basis and under what assumptions you arrived at your valuation.


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## tinhat (27 September 2013)

Pioupiou said:


> I have no problem valuing CAB within the range of $3.00 to $4.00, so the $3.50 midpoint seems reasonable.  This is based on a range of dividends starting at 30 cents, and either not growing, or growing very slowly (say 2.5% per year).  I would highly appreciate some feedback on what basis and under what assumptions you arrived at your valuation.




Piopiou, I read your posts with interest. Look at the chart. Look at a monthly, weekly and daily charts for this stock. It's a dog. No point chasing "value" or yield if the market thinks the stock is a dog and you have to watch the capital value of your investment go down month after month. I haven't analysed this stock from a FA point of view nor analysed the quality of the management to make the transformative changes that are probably required for this company to prosper in the long term. The charts do tell me what the market thinks of this company. If it is worth between $3 and $4 as you suggest it might be worth waiting to see the market sentiment pushing the price up rather than down before hopping on. You may think it is worth between $3 and $4 but I bet that if you hold this company you didn't buy in that price range?

Just looking very quickly at the dividend pay-out ratio and cash flow of the company this company has the potential to invest and transform as needed if it has the right management. Again, I haven't looked into this company to know. I understand they are moving into other aspects of transport; eg, public bus operations.


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## Julia (27 September 2013)

tinhat said:


> Piopiou, I read your posts with interest. Look at the chart. Look at a monthly, weekly and daily charts for this stock. It's a dog. No point chasing "value" or yield if the market thinks the stock is a dog and you have to watch the capital value of your investment go down month after month. I haven't analysed this stock from a FA point of view nor analysed the quality of the management to make the transformative changes that are probably required for this company to prosper in the long term. The charts do tell me what the market thinks of this company.



The above reminded me of a post many years back by Bunyip which I've always remembered because it made so much sense and turned me into a trend follower.   



> In mid February when the trend line was breached and the stock was making lower peaks and lower troughs, it told us that the many thousands of investors who researched this stock had found reasons to doubt that it had further upside potential.
> I don't know or care what these reasons were......as a trend trader I don't need to concern myself with specific details of the reasons behind every move in a stock or market. I can't make any money out of reasons, but I can definitely make money out of trends. Therefore the most productive use of my time is to analyse trends, not the reasons behind the trends.
> I couldn't care less about PE's or projected PE's or earnings forecasts or new pipeline deals or new gas discoveries or any of that stuff that you fundamentalists spend so much of your time researching. Sure the fundamentals are important and they have a big bearing on the behaviour of the stock. But why should I spend one minute of my time researching the fundamentals when thousands of you have already done the research for me. To get a summary of what your fundamental reseach has told you I can simply look at the chart.
> 
> ...


----------



## galumay (27 September 2013)

Julia said:


> The above reminded me of a post many years back by Bunyip which I've always remembered because it made so much sense and turned me into a trend follower.




Its fascinating how we all find resonance with entirely discordand and even opposite lines of thought. I guess it speaks to the difference in psychological profiles and world views. 

I have read similar explanations of FA which had a similar if opposite effect on me - confirming by belief that TA is voodoo, and shaping my system into one with a fundamental basis. 

I actually found the passage you quoted amusing - the assumption that trends reflect FA, that seems so silly to me, what they reflect is nothing more and nothing less than the historical actions of an irrational market. (of which true fundamental investors are but a tiny part of)

Yet clearly the same words had a profound effect on you and shaped your investment strategy. 

I guess that is one reason I find human psychology such an interesting subject!

(mind you I also am happily holding CAB too!)


----------



## Shaker (27 September 2013)

Thanks for reposting that Julia

Great read for many of us trying to buy in what are volatile stocks. The Trend is our friend.

Shaker


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## Julia (27 September 2013)

galumay said:


> I
> (mind you I also am happily holding CAB too!)



Well, there you go!  Rather proves the point that Bunyip was making and endorses Tin Hat's view that it's a dog.
I'll hold off on the 'amusement' and wish you the best of luck with it.


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## bunyip (29 September 2013)

We do whatever works for us. If someone is making money from a method that’s very different to mine, then good luck to him. 
Personally I’ve never seen any sense in holding on to dogs for prolonged periods of time, when you could instead have your capital better employed in a stock that’s heading solidly upward.

The market decides the value of a stock. You or I do not. Time and again I’ve known people to buy stocks because they considered them realistic value or undervalued. And time and again I’ve watched those same stocks go down down down.
A mate used to pass on Renee Rivkin’s newsletter to me. Rivkin liked a stock called Pasminco so much that he recommended it in a number of his newsletters as ‘_good value at these prices’_. Pasminco continued heading south and the company eventually went broke.
A bloke I met at an options night told me he lost ‘well in excess of a six figure sum’ by buying more Pasminco shares every time they fell by another ten percent. He fell into the trap of thinking ‘it has to be good value at these prices, it has to be even better value now that it’s fallen even further. He could have avoided his big loss, and quite likely made substantial profits instead, simply by avoiding a dog like Pasminco and putting his money into some up trending stocks instead.


----------



## Smurf1976 (29 September 2013)

Ah yes, Pasminco.....

If the stock has gone down along with a broader market decline, or one-off events impacting the company, then it may well be a good buying opportunity if the business itself is sound going forward. Timing may not be ideal, but at least you end up owning shares in a sound business that pays dividends and the share price will likely reflect that reality at some future date.

On the other hand, if the stock is dropping because the business is going broke then you sure don't want to be buying into it.

As for CAB, it does bring in a lot of cash but it's the sort of business that doesn't seem to have a sustainable edge in the long term. Taxis and how to pay for and hire them isn't rocket science and in due course it's probable that someone will come up with a better way than Cabcharge or at least directly compete with a similar model. Likewise bus contracts are also a fairly straightforward business that lots of companies could go into if it's profitable enough. So I see CAB as a "good while it lasts, but it won't last forever" type of stock.


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## galumay (29 September 2013)

Julia said:


> Well, there you go!  Rather proves the point that Bunyip was making and endorses Tin Hat's view that it's a dog.
> I'll hold off on the 'amusement' and wish you the best of luck with it.




WOW! Thats a special kind of bitchiness! 

I guess you don't like being called out then?


----------



## Boggo (29 September 2013)

bunyip said:


> Personally I’ve never seen any sense in holding on to dogs for prolonged periods of time, when you could instead have your capital better employed in a stock that’s heading solidly upward.
> 
> The market decides the value of a stock. You or I do not.




Agree entirely.

Looks like someone needs to get this thing a bone and give it a pat.


----------



## bunyip (29 September 2013)

Boggo said:


> Agree entirely.
> 
> Looks like someone needs to get this thing a bone and give it a pat.




I’ll bet CAB has been a buy recommendation from various brokers and analysts and newsletters all the way down from $14.
They would have called it ‘good value at current prices’!

For the market technicians among you, Boggo’s monthly chart of CAB shows a classic sell pattern after it peaked out above $14. 
This pattern was outlined in the book _‘Trader Vic: Methods Of A Wall Street Master’. _

http://www.trading-naked.com/123-reversal.htm

Those of you who’ve studied Stan Weinstein’s _‘Secrets For Profiting In Bull And Bear Markets’_ will have recognized that Weinstein’s methodology also would have given a timely exit from CAB before the price really collapsed.


----------



## Boggo (29 September 2013)

bunyip said:


> I’ll bet CAB has been a buy recommendation from various brokers and analysts and newsletters all the way down from $14.
> They would have called it ‘good value at current prices’!




This is from an item published elsewhere in Nov 2012 when the price was already at $4 after it had just dropped from $5.80 in the previous two weeks !
People believe in and invest on the same theory as these guys 

_This sees JP Morgan's price target cut to $4.20 from $5.49. Macquarie has reacted similarly in cutting its target to $3.00 from $4.50. The consensus price target according to the FNArena database now stands at $4.80, down from $5.27 previously._


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## Country Lad (29 September 2013)

bunyip said:


> I’ll bet CAB has been a buy recommendation from various brokers and analysts and newsletters all the way down from $14.




Bunyip, you aroused my curiosity.  Here is one broker who shall remain nameless.

Cheers
Country Lad


----------



## Julia (29 September 2013)

galumay said:


> WOW! Thats a special kind of bitchiness!
> I guess you don't like being called out then?



Called out on what exactly?  And by whom?

I have simply responded in agreement to tinhat's post below:



tinhat said:


> Piopiou, I read your posts with interest. Look at the chart. Look at a monthly, weekly and daily charts for this stock. It's a dog. No point chasing "value" or yield if the market thinks the stock is a dog and you have to watch the capital value of your investment go down month after month. I haven't analysed this stock from a FA point of view nor analysed the quality of the management to make the transformative changes that are probably required for this company to prosper in the long term. The charts do tell me what the market thinks of this company....




and then offered an old post by Bunyip which I'd found interesting and helpful:



Julia said:


> The above reminded me of a post many years back by Bunyip which I've always remembered because it made so much sense and turned me into a trend follower.






bunyip said:


> We do whatever works for us. If someone is making money from a method that’s very different to mine, then good luck to him.
> Personally I’ve never seen any sense in holding on to dogs for prolonged periods of time, when you could instead have your capital better employed in a stock that’s heading solidly upward.
> 
> The market decides the value of a stock. You or I do not. Time and again I’ve known people to buy stocks because they considered them realistic value or undervalued. And time and again I’ve watched those same stocks go down down down.
> ...




Why have now repeated goes at me, despite my polite request to not continue any exchange, yet not raise a word against either tinhat or Bunyip, both of whose posts I simply agreed with?

If you have decided to continue holding the stock, that's your business.  Others are, however, entirely entitled to express an opinion about the stock and the general strategy of holding on to losing stocks.  I have no idea why you have chosen to turn such opinions into a personal attack.


----------



## galumay (29 September 2013)

Julia said:


> Called out on what exactly?




Your strawman arguments in the TGA thread.



> Why have now repeated goes at me,




Oh, please.



> despite my polite request to not continue any exchange,




Actually you didnt request anything of me, you said you were not going to comment anymore.



> If you have decided to continue holding the stock, that's your business.  Others are, however, entirely entitled to express an opinion about the stock and the general strategy of holding on to losing stocks.  I have no idea why you have chosen to turn such opinions into a personal attack.




More strawman nonsense, I have not personally attacked anyone for their opinion about holding this stock, nor have I suggested they are not entitled to hold opinions on this or any other matter.


----------



## Boggo (29 September 2013)

galumay said:


> Your *strawman* arguments in the TGA thread.
> 
> Oh, please.
> 
> ...




What's with all this strawman garbage.
https://www.aussiestockforums.com/f...=18617&page=52&p=796158&viewfull=1#post796158

If you are going to use the old English term straw man at least understand what it means and spell it correctly, its straw man, two words.

Little knowledge of and misuse of basic terms is the normal behaviour for and aids in the recognition of sciolists, an area where you seem to admirably tick all the boxes.


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## Smurf1976 (29 September 2013)

We're talking about opinions here, not hard facts.

Whilst the historic share price and dividends of CAB are a matter of fact, whatever happens in the future most certainly isn't. Whether you think the share price is headed to $1 or $100, that is a matter of _opinion_ based on whatever reasoning is being applied. It certainly isn't a fact, well not unless someone here has either inside information and/or the ability to effectively manipulate the market.

I don't see how anyone could be considered "wrong" or "unreasonable" for expressing an opinion, especially when that opinion is backed with some underlying reasoning. Whether or not anyone else agrees with that opinion, doesn't make it unreasonable as such.

The past ought to be factual but the future is necessarily a matter of opinion with many different possible outcomes. CAB could be bankrupt two years from now, or it could make investors an absolute fortune. Nobody here can say with certainty that either of those two scenarios won't happen.


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## galumay (30 September 2013)

Boggo said:


> What's with all this strawman garbage.
> https://www.aussiestockforums.com/f...=18617&page=52&p=796158&viewfull=1#post796158




No garbage, just pointing out where people are using a strawman argument.



> If you are going to use the old English term straw man at least understand what it means and spell it correctly, its straw man, two words.




I am not really needing a lesson in the derivation of the term, obviously I understand what it means, sorry for offending the spelling police.



> Little knowledge of and misuse of basic terms is the normal behaviour for and aids in the recognition of sciolists, an area where you seem to admirably tick all the boxes.




WOW, is that really called for? Ad hominem attacks usually dont reflect well on the perpertrator.

(there is more than a little sense of irony in one who would see fit to accuse another of being a sciolist.)


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## bunyip (30 September 2013)

Country Lad said:


> Bunyip, you aroused my curiosity.  Here is one broker who shall remain nameless.
> 
> Cheers
> Country Lad
> ...



This CAB chart with all the buy recommendations as the stock headed south reminds me of the presentation given by Nick Radge at an ATAA meeting in Brisbane.
Nick put up charts of a dozen or so stocks that had been in serious down trends for prolonged periods. On the charts he'd marked numerous points at which several brokers had given buy recommendations.


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## galumay (30 September 2013)

The really scary thing with that chart is that the brokers had picked so many of the peaks! Even with the fall in price over time there were many entry points where good profits could have been made subsequently, but at a glance they seem to have only picked a couple of them.


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## bunyip (30 September 2013)

galumay said:


> The really scary thing with that chart is that the brokers had picked so many of the peaks! Even with the fall in price over time there were many entry points where good profits could have been made subsequently, but at a glance they seem to have only picked a couple of them.




Yes, a nimble-footed trader could have found profitable buying opportunities even in that down trending stock. 
But just imagine how much more profitable the buys could have been in a stock that was trending consistently upward.

The easiest way to swim as far as possible as quickly as possible is to jump into a strongly flowing river and swim with the current, not against it.


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## 13ugs13unny (30 September 2013)

Smurf1976 said:


> We're talking about opinions here, not hard facts.
> 
> The past ought to be factual but the future is necessarily a matter of opinion with many different possible outcomes. CAB could be bankrupt two years from now, or it could make investors an absolute fortune. Nobody here can say with certainty that either of those two scenarios won't happen.




I don't have CAB sharers, but I don't understand the Kerfuffle. 

CAB is a payment gateway. Last week a start up online payment gateway called Braintree was bought by ebay for about $800 million dollars. - and that was just a start up.

CAB is a mobile a mobile payment system and a proven one. I don't understand why people are bearish with this stock, might just need some modernising.


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## craft (30 September 2013)

For my approach the best buys are made when the general consensus contradicts my own opinion. 
(Of course with the caveat – you have to be right - just contrarian won’t work)




Country Lad said:


> View attachment 54617




Brokers have now gone to a consensus sell.




Chartists are calling it a dog.



Boggo said:


> Agree entirely.
> 
> Looks like someone needs to get this thing a bone and give it a pat.




Boggo on TGA - 26/4/12 


> Guys, all this banter and posting is irrelevant, one look at a chart and a four year old could tell you what the reality is.
> 
> Reality - the price is going down, unless you are short it will cost you money





Forget about other peoples opinions - get an informed one of your own and do it your way – have fun. Personally I find the road less travelled most rewarding.

So long.


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## sinner (30 September 2013)

> Guys, all this banter and posting is irrelevant, one look at a chart and a four year old could tell you what the reality is.
> 
> Reality - the price is going down, unless you are short it will cost you money




I find it pretty funny that the so called technicians on this site are posting the CAB chart as a big "told you so", but they're actually posting the unadjusted chart, which obviously doesn't take into account dividend or split or anything else. Which is so stupid because if you are short you have to pay the dividend along with the cost of your margin. 

One look at the chart and a four year old could tell you that the reality is price has been in a range since the GFC, if you were short all this time then you're hardly a genius of trend following yourself *because the downtrend actually ended 4 years ago.*

I really wish the divisiveness between so called "value" and so called "technical" traders on this forum would be replaced by something constructive and useful. Of course, on this forum you can't call out a technical trader for being wrong without being accused of being an irrational value investor, nor can you convince a value investor that trend following is a useful technique without being accused of being one of those irrational technical traders


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## bunyip (30 September 2013)

sinner said:


> I find it pretty funny that the so called technicians on this site are posting the CAB chart as a big "told you so", but they're actually posting the unadjusted chart, which obviously doesn't take into account dividend or split or anything else. Which is so stupid because if you are short you have to pay the dividend along with the cost of your margin.




I didn’t mention shorting it. I simply stated that your capital could be better employed in up trending stocks rather than being tied up for prolonged periods in dogs.


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## sinner (30 September 2013)

bunyip said:


> I didn’t mention shorting it. I simply stated that your capital could be better employed in up trending stocks rather than being tied up for prolonged periods in dogs.




bunyip, I wasn't referring to anyone specifically, just railing against this stupid argument once again cropping up on ASF when it was supported by spurious data. However I'd point out that you have not provided any actual quantitative comparison or analysis of any kind to support claims that investing in any one given type of stock is going to return better than investing in any other given type of stock, you merely stated other posters should "imagine" how much more profitable it is. 

I am a proponent of quantitative analysis, and generally my testing shows returns for investing in value stocks has a comparable premium to investing in momentum stocks, maybe even stronger in Australia than other markets due to behavioral bias. It also shows that premiums are highest when both trend and valuation signals are favorable. This testing confirms what I have read in many research papers and journal articles. 

So what is the point of continuing this silly argument when 

a. Technicians on this discussion aren't even using valid data to support their claims
b. Actual testing across large sample size shows comparable (if un-correlated) returns from either strategy
c. Trend and Valuation are only two of a myriad of factors (size, volatility, liquidity, momentum, value, etc) which affect the price of a stock and making the discussion an argument of the two just narrows the discussion down to a boring argument?


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## skc (30 September 2013)

sinner said:


> So what is the point of continuing this silly argument when
> 
> a. Technicians on this discussion aren't even using valid data to support their claims
> b. Actual testing across large sample size shows comparable (if un-correlated) returns from either strategy
> c. Trend and Valuation are only two of a myriad of factors (size, volatility, liquidity, momentum, value, etc) which affect the price of a stock and making the discussion an argument of the two just narrows the discussion down to a boring argument?




Well said, Sinner. It is a debate as old as the forum itself. The only sensible conclusion is simply that both methods work well in the right hands. Yet the only conclusion many people on this forum reach is that, one instance of failure in the wrong hand proves the method doesn't work.


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## Julia (30 September 2013)

skc said:


> Well said, Sinner. It is a debate as old as the forum itself. The only sensible conclusion is simply that both methods work well in the right hands. Yet the only conclusion many people on this forum reach is that, one instance of failure in the wrong hand proves the method doesn't work.



Can you expand on what actually constitutes 'the method' you're referring to here, skc?


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## skc (30 September 2013)

Julia said:


> Can you expand on what actually constitutes 'the method' you're referring to here, skc?




Methods simply meant FA and TA. Other words I could have used include approaches, analysis techniques etc.

Is that what you are asking?


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## bunyip (30 September 2013)

sinner said:


> So what is the point of continuing this silly argument



No point at all as far as I can see. In fact I wasn’t aware I was in an argument. I’ve simply stated my opinion based on what’s worked best for me in the past. I’ve tried value investing and haven’t been able to make it work very well. On the other hand I’ve had reasonable success in simply jumping aboard a trend and going for a ride until the trend fizzles out.
I have no problem with anyone using whatever method they find is profitable for them. If they can make value investing work, that’s great. Considering that many people get hammered in the market, I’m not going to argue with anyone who’s making money from whatever method. 
I’ve argued with them in the past, but not any more. It’s not worth it. 
That’s why I made the statement below in an earlier post.



bunyip said:


> We do whatever works for us. If someone is making money from a method that’s very different to mine, then good luck to him.




Profit is the name of the game - we should keep doing whatever we find profitable.
I say good on you if you can make money from value investing, good on you if you can make money from trend following, good on you if you can invest profitably by throwing darts at a stock page to make your selections.


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## Julia (30 September 2013)

skc said:


> Methods simply meant FA and TA. Other words I could have used include approaches, analysis techniques etc.
> 
> Is that what you are asking?



More or less.  I'm just not aware of anyone completely dissing any single approach, i.e. saying that FA, Value Investing etc, never works, or similarly any kind of trending or more sophisticated TA is a failure.  The closest to the latter is the suggestion that it is 'amusing'.

All I've seen happening here is the assertion that

(a) holding onto a complete dog is futile, and
(b) declining to sell, either to avoid a downturn, or to take reasonable profits, simply because of the tax implications is possibly short sighted.
So Cynical offered what seemed to me to be a pretty sensible compromise in this respect.

Bunyip above has pretty well summed up my thoughts.  I'd have thought there is plenty of room for a variety of approaches without anyone feeling threatened.

All this is essentially aside from the proper discussion of the stock, so it's my suggestion that we consign the previous couple of pages to history, hopefully all having learned something about the dangers of miscommunication, and move on.


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## Knobby22 (1 October 2013)

I said back in May that from a fundamental view CAB would drop in price and be a buy below $3.50.
The reason is the slow growth and the risk. 

Risk is very hard to correlate so I am not surprised that other investors trying to price the company may have a higher or lower price. At present the market disagrees with me as we are still above the price I would accept.


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## Ves (25 February 2014)

Half year report looks pretty good to me.  Cash flow conversion is really good & top line growth is starting to appear.  Which is good because a lot of it falls to the bottom line. Balance sheet looks in especially good shape now that they've knocked off some of the debt.

Something that never seems to get mentioned in discussions of this company is the business / industry cycle and where we are currently.   I believe the market,  after adjusting for regulatory risk,  is still pricing this one as if it's in a better part of the cycle and as if there won't be much improvement in the underlying business environment (or "ex-growth").  

Cabcharge still has a fairly strong competitive advantage in the industry,  and has tendrils all the way through it,   and the core business requires very little capital to grow.   Any uptick the economy will really benefit this business, and with high margins,  profit will grow at a pretty good clip. They'll have plenty of cash flow generation to deal with whatever regulatory measures the governments of the day impose upon them.


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## galumay (25 February 2014)

Ves said:


> Half year report looks pretty good to me.




Agreed, I dont mind that they cut the divvy a bit too, focus on the debt and put the money to use inside the business. Happy to see my patience being rewarded with this one!


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## TikoMike (25 February 2014)

So smartphone apps not affecting revenue like people thought? Who would of thunk it?

The only thing I'm upset about is they didn't buy back their own shares as I talked about in this thread previously


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## ROE (25 February 2014)

I still hold a fair chunk, my average is probably around $4 - $4.10
dividend still pretty damn good and look like it navigates the environment well.

I think the market overly pessimistic about it, due for a reprice hopefully.

CAB control fundamental structure that hard for apps to break in, head line fear is good but
when it come down to nitty gritty stuff, CAB has iron gripped on it that why I am not let it
go despite all the headlines..


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## TikoMike (25 February 2014)

ROE said:


> I still hold a fair chunk, my average is probably around $4 - $4.10
> dividend still pretty damn good and look like it navigates the environment well.
> 
> I think the market overly pessimistic about it, due for a reprice hopefully.
> ...




To be honest the media has been crying wolf far too often with CAB. I don't even know if Reg won that defamation case, don't know, don't care as it doesn't really affect the underlying business of CAB.


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## ROE (25 February 2014)

Here is why I stand by CAB.

for apps to make money and take serious earning away from CAB, they need some serious volume
and because the apps is not centralise and fragmented, everyone want to get into the space 
thinking it easy money but once they get in they discovered upfront investment is expensive 
and they cant get the volume.

They then fight one another for volume and no one end up making any money as they cant get the volume and CAB jab in every so often to make their life difficult and eventually someone will burned out.

Also Taxi is not something that everyone use often, it much easier for them to call 13 
number and grab a cab rather fumble with apps and various other technology if they going to use it once or twice.

while all that is going on people forget that bus, eft solutions and taxi services and all other business CAB hold actually grow earning at a steady pace and contribute more and more to their bottom line each year.

I see CAB similar to Telstra a few years ago, everyone hate it, they price it for nothing
so if you happy to play the dividend game and wait for the return of the champion then CAB probably 
fit well.

Remember when people focus on Telstra decline fix line earning and phone call but don't pay much attention to their mobile and data growing at double digit rate?...now mobile and data contribute decent chunk to their earnings.


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## banco (25 February 2014)

Ves said:


> Cabcharge still has a fairly strong competitive advantage in the industry,  and has tendrils all the way through it,   and the core business requires very little capital to grow.   Any uptick the economy will really benefit this business, and with high margins,  profit will grow at a pretty good clip. They'll have plenty of cash flow generation to deal with whatever regulatory measures the governments of the day impose upon them.




Imposed on them?  They thrive through the regulations imposed on others.  They are one of the biggest rent seekers out there.


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## TikoMike (25 February 2014)

ROE said:


> Here is why I stand by CAB.
> 
> for apps to make money and take serious earning away from CAB, they need some serious volume
> and because the apps is not centralise and fragmented, everyone want to get into the space
> ...




I agree with what you say on volume however I don't agree that it's expensive. In fact the reason that low start up costs are required to get started in taxi apps is the reason why it will fail because of how easy it is to copy. 

How many apps is the taxi driver going to have on his phone just to keep up with bookings so they don't miss each and every important booking? With so many apps to choose which app is best for the customer? What if the chosen app by the customer isn't able to get a booking, should they retry with the next app? Is the customer going to have 20 taxi apps on their phone? The customer might just simply say "f*** it, I'll just use my EFTPOS/credit card instead". The driver isn't going to deny someone using card because of that all important fare. This is why I had a laugh when Uber created a "corporate account" as an incentive to lure corporates away from simply giving a Cabcharge voucher to their employees.


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## So_Cynical (25 February 2014)

ROE said:


> Here is why I stand by CAB.
> 
> for apps to make money and take serious earning away from CAB, they need some serious volume
> and because the apps is not centralise and fragmented, everyone want to get into the space
> ...




The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.


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## TikoMike (26 February 2014)

So_Cynical said:


> The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.




Yes you are correct. Kids not fumbling with apps will be the downfall of Cabcharge. Wish I realised this before investing my money.


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## skc (26 February 2014)

ROE said:


> Here is why I stand by CAB.
> 
> for apps to make money and take serious earning away from CAB, they need some serious volume
> and because the apps is not centralise and fragmented, everyone want to get into the space
> ...




Top post! Exemplary contrarian thinking. Changes my view on CAB a fair bit.

It was a good half year result. I bought on the open and closed on the finish, but I might actually consider this as part of a long term income portfolio.


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## KnowThePast (26 February 2014)

I have an opinion too!

I live in UK at the moment. Public transport here is much, much better and covers pretty much all of London, rather than selective areas as it is in Melbourne. Nevertheless, people use taxis very often. Sometimes, just for a short trip from the supermarket so they don't have to carry all the shopping. And they use apps/websites to find the cheapest deal. From that perspective, if that's where Aus taxi industry is heading, it doesn't look good.

But there are two things that are very different between the two markets:
- Cost. Due to low wages, I can get a taxi from supermarket to my house, about half a mile for ~£4. 
- Parking/public transport. Because of effectiveness of public transport and scarcity/cost of parking, lots of people don't own cars. So they regularly need to use taxis. In Australia, non-availability of public transport forces people to own cars. And it is much more convenient to take short trips in your own car, rather than pay and organise a taxi.

Another thing to consider is that the  new 5% surcharge rule did not come into effect until 1st February, so this half year result was not impacted by it.

Bus revenues are growing, which is great, but capital expenditure is much higher in that business and so is return on capital. 

Just random thoughts. I am a holder, in at $4.03. And with the current numbers, the price would need to at least double before I consider selling.


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## qldfrog (26 February 2014)

the reason I would not invest a cent is that sooner or later "private cars" will come.
http://venturevillage.eu/uber-taxi-paris as one example, 
They are doing a killing O/S in the last year and are a threat to the current  cosy taxi (and cabcharge) business.
people will not need to know how to play with apps to use these, and they will allow bookings, etc
DYOR


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## ROE (26 February 2014)

qldfrog said:


> the reason I would not invest a cent is that sooner or later "private cars" will come.
> http://venturevillage.eu/uber-taxi-paris as one example,
> They are doing a killing O/S in the last year and are a threat to the current  cosy taxi (and cabcharge) business.
> people will not need to know how to play with apps to use these, and they will allow bookings, etc
> DYOR




They been around for a while can't do it in Australia due to law and regulation ...they can only play in luxury hire car market ... Different market play differently...

This is a grey area because insurance and stuff can be tricky, what if you use your car and have an accident, insurance won't pay as you run as a business and you not paying insurance business etc...

It sound easy but a mine field when you get Into legal stuff like accidents and public property damage..

I can say with 99% certainty this won't destroy cabcharge business it just ride along the side with cab like everyone else.. 

Another apps another player, they won't be the last there will be more coming ...Hailo, SideCar etc...
Everyone is in it, the best thing that happen to cab is fragmented market
People soon need to install 10 apps on their phone to get a ride


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## craft (26 February 2014)

So CAB is seen by some as this rent seeking monster that going to have its evil monopoly snatched away from it by........

That view doesn’t accord with the numbers to me.

They currently only make something around 13% ROA which is leveraged up to 17-18% ROE.

Regulators actually need to make the industry more attractive not less if they want private enterprise to step up and improve the current system.  Every time they clamp down they limit appetite of potential new investment and competitors.

If booking apps are going to be a serious threat – CAB is in the best position to do an app – it isn’t hard technology.  They can just about instantly lock in the volume to stop all other taxi apps dead in their tracks in this country.  And their app would work seamlessly with their current taxi logistic and payment systems.

New entrants face a weak competitive position, low industry returns - an established competitor who already has scale in the niche and an early cash flow that would be initially negative then volatile and certainly a long time before it would be stable enough to be leveraged. 

CAB might not have the brightest prospects but it has some advantage. When you factor in the price I think it has investment appeal.


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## McLovin (26 February 2014)

ROE said:


> They been around for a while can't do it in Australia due to law and regulation ...they can only play in luxury hire car market ... Different market play differently...




Uber is already doing it Sydney. 40% cheaper taxi fares 10am-5pm everyday.


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## Psych (26 February 2014)

McLovin said:


> Uber is already doing it Sydney. 40% cheaper taxi fares 10am-5pm everyday.




And Macquarie with much more capital employed already *tried* doing it.


----------



## McLovin (26 February 2014)

Psych said:


> And Macquarie with much more capital employed already *tried* doing it.




Uber isn't running taxis, they're just running a loss on the fare. I'm not sure I'd call Uber unfunded, they got $250m in additional equity last year.


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## Psych (26 February 2014)

You're confusing me McLovin.  ROE said they cannot do Uber Taxis based on his reply to qldfrog. You basically said Uber is doing that now. Now you're saying they aren't running Taxis. Confusing.

I also never said they were unfunded just that Macquarie had more funding given their efforts to penetrate the market.

And how long can they continue running at a loss charging that cheap for their luxury cars?


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## craft (26 February 2014)

McLovin said:


> Uber isn't running taxis, *they're just running a loss on the fare*. I'm not sure I'd call Uber unfunded, they got $250m in additional equity last year.




If I was CAB - I would just be watching them bleed at this stage. If they don't look like they are going to bleed out all by themselves before attaining anything like CAB's scale benefits in this niche (country) - then I would match their app/pricing at the appropriate time and ensure the bleeding continues. Is Uber ready for a fight to the death in AUS without the expense advantage that CAB's niche scale provides? (CAB, as is any incumbent is automatically committed) I see CAB reacting rationally to loss leader competition rather than sitting idly by as it losses its scale advantage.

All worthwhile businesses' will be attacked - its their potential to defend that counts.

I thought the possibilities and probabilities were pretty well priced.


----------



## McLovin (26 February 2014)

Psych said:


> You're confusing me McLovin.  ROE said they cannot do Uber Taxis based on his reply to qldfrog. You basically said Uber is doing that now. Now you're saying they aren't running Taxis. Confusing.
> 
> I also never said they were unfunded just that Macquarie had more funding given their efforts to penetrate the market.
> 
> And how long can they continue running at a loss charging that cheap for their luxury cars?




Uber is a payment system, it's not running its own taxis anywhere. It is not running taxis in Paris and they don't own any luxury cars either. Uber's payment system is currently offering an up to 40% discount on taxi fares (not on hire cars) booked through it in Sydney. The fares are set by the government so obviously the driver is still being paid the regulation fare. I have no idea how long they can run at a loss, but given the $250m investment was made by Google, I'm sure there's a fair bit of planning that's gone into it.


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## McLovin (26 February 2014)

craft said:


> If I was CAB - I would just be watching them bleed at this stage. If they don't look like they are going to bleed out all by themselves before attaining anything like CAB's scale benefits in this niche (country) - then I would match their app/pricing at the appropriate time and ensure the bleeding continues. Is Uber ready for a fight to the death in AUS without the expense advantage that CAB's niche scale provides? (CAB, as is any incumbent is automatically committed) I see CAB reacting rationally to loss leader competition rather than sitting idly by as it losses its scale advantage.
> 
> All worthwhile businesses' will be attacked - its their potential to defend that counts.
> 
> I thought the possibilities and probabilities were pretty well priced.




I don't think Uber's intention is to try and takeover from CAB. It is afterall targeting a certain subset of taxi users (upper-middle class/executives). I'm sure the intention with the cheap taxi fares is just to build the customer base that can then be converted to paying for premium cars. That's my theory anyway.

The only point I was making is that there is no law that prevents Uber from undercutting the regulatory fares.


----------



## qldfrog (26 February 2014)

ROE:
"I can say with 99% certainty this won't destroy cabcharge business it just ride along the side with cab like everyone else.. "
I obviously do not share this view and the over regulation in australia will have to be crushed or the country will be.
In either case better to put your money elsewhere than in CAB.
We just need the recession we need to have to see these type of taxi monopoly diseappear, legally or not
" I am not an illegal  taxi, I am an unemplyed mining engineer (or V* designer) sharing petrol cost with a mate I found via a trip share app"
anyway, all good...


----------



## ROE (26 February 2014)

I always walk the talk  adding more to my holding not long ago when Mr Market price it too cheap.






I dont think CAB is risk free, there are always potential new player and disruption to the business but the price it offered is more than compensate for the risk according to my calculation.

The trick in the market is to recognise opportunity and avoid high risk 
sometimes over whelming fear got confused with high risk and therefore present opportunities

under $4.0 close to 8% fully franked yield double what bank rates pay with tax benefits.


----------



## qldfrog (27 February 2014)

might be right indeed: as long as you keep your eyes open and are ready to sell when need be and do not expect to have these shares in 10  years...
anyway, DYOR I am far from being a role model trader/investor


----------



## Klogg (30 March 2014)

Just started looking into CAB a little further and the case looks compelling. From the outside, it looks doomed to lose profits, but looking further into it I'm not really seeing that... (I'll save everyone my opinion - everything I'm seeing has been mentioned in one form or another)

However, my one big concern is the stock ownership of management. I get the feeling Reg Kermode is ready to hand over to someone else, but if I'm wrong, then why did he sell all of his holding in the company? And further on this point, only 3 of the 6 directors have any holding in the company... (as of last annual report)

Anyone with thoughts or info on this would be great...
(I'm still looking through reports - will post if I find the answer to my own question)

Thanks


----------



## McLovin (8 April 2014)

NSW looking to introduce 5% capped fee and give formal approval to apps.



> The NSW Government will explicitly allow consumers to use mobile apps like Uber and goCatch to book taxis for the first time under reforms to the state’s taxi laws.
> 
> The state government will also cap the surcharge on credit and debit card payments for taxis at 5 per cent, following similar moves by the Victorian Government last year, effectively halving the fee charged by incumbent Cabcharge.




http://www.afr.com/p/technology/nsw_government_reforms_taxi_laws_g87fvrIFEV6SnBL2LEgHvN


----------



## Huskar (8 April 2014)

Thought it would fall lower on the announcement actually - must have been priced in a fair amount already.

On Uber etc replacements, another interesting drawback I discovered (surely would be fairly easy to fix?) is you cannot actually book ahead with Uber. You can only use when you definitely want a ride. I had a friend in procurement at a large company who could not draft Uber onto books because of this inability to book ahead.

But I think Uber will be here to stay - CAB really needs to make haste on kinking out its booking system as it is notorious how often the booked taxi (by phone / internet / whatever) fails to turn up.

It is priced at present for half the earnings it currently has, which may be fair - then again, if half earnings don't materialise then it is undervalued. And sit with fairly consistent dividend stream all that time. Sounds like a situation where limited downside and fair amount of upside.


----------



## skc (8 April 2014)

Huskar said:


> Thought it would fall lower on the announcement actually - must have been priced in a fair amount already.
> 
> On Uber etc replacements, another interesting drawback I discovered (surely would be fairly easy to fix?) is you cannot actually book ahead with Uber. You can only use when you definitely want a ride. I had a friend in procurement at a large company who could not draft Uber onto books because of this inability to book ahead.
> 
> ...




When VIC made the changes everyone pretty much predicted that other states will follow suit. So hence the fall today is only 5-6%, rather than 15-25%.


----------



## Smurf1976 (8 April 2014)

Huskar said:


> On Uber etc replacements, another interesting drawback I discovered (surely would be fairly easy to fix?) is you cannot actually book ahead with Uber. You can only use when you definitely want a ride. I had a friend in procurement at a large company who could not draft Uber onto books because of this inability to book ahead.




Another factor with many companies would be reliability. Eg there are plenty who have a "use the cheapest" policy when it comes to air travel, with an exclusion on one particular airline due to a poor track record for reliability. So it's really "use the cheapest from the approved list". Uber would fall into the same category if there are problems with taxis not turning up - an individual might be OK with that but the cost of a delay to business travellers would in most cases far exceed any cost saving on the taxi fare.


----------



## McLovin (29 April 2014)

Kermode resigns. Apparently he has aggressive form of cancer. Doesn't sound good at all.


----------



## ROE (29 April 2014)

McLovin said:


> Kermode resigns. Apparently he has aggressive form of cancer. Doesn't sound good at all.




he in his 80s isn't it? time to let it go 

I think it is a good thing we need new blood on CAB board with fresh eyes.


----------



## ROE (29 April 2014)

Smurf1976 said:


> Another factor with many companies would be reliability. Eg there are plenty who have a "use the cheapest" policy when it comes to air travel, with an exclusion on one particular airline due to a poor track record for reliability. So it's really "use the cheapest from the approved list". Uber would fall into the same category if there are problems with taxis not turning up - an individual might be OK with that but the cost of a delay to business travellers would in most cases far exceed any cost saving on the taxi fare.




Not sure if driver look at their liability when they drive people around with Uber ..from what I understand all the liability is with you...this could bankrupt the driver if they are not properly insure


----------



## McLovin (29 April 2014)

ROE said:


> he in his 80s isn't it? time to let it go
> 
> I think it is a good thing we need new blood on CAB board with fresh eyes.




Yeah I agree he was probably due to step aside. But from a health perspective it sounds as though whatever he has is terminal.


----------



## ROE (29 April 2014)

McLovin said:


> Yeah I agree he was probably due to step aside. But from a health perspective it sounds as though whatever he has is terminal.




Yeah agree sound terminal but the guy should have resigned 20 years ago and smell the roses ...

I know he likes his Cabcharge and probably love to go to work but at some point you have to let go
and walk the earth..I don't think it is ideal work till you have terminal disease


----------



## Smurf1976 (29 April 2014)

ROE said:


> Not sure if driver look at their liability when they drive people around with Uber ..from what I understand all the liability is with you...this could bankrupt the driver if they are not properly insure




I was actually thinking of reliability of the service but liability for drivers is a good point too and one that I expect many wouldn't have thought of.

So far as reliability is concerned, if I'm just wanting to get home on a Saturday night then it might not matter too much and price and convenience will be deciding factors for most taxi users I'd expect. 

But for people going to the airport or business travelers needing to get across the city (any city) for meetings etc then reliability outweighs price - you need to be there on time, saving a few $ on a taxi fare isn't really a major consideration. So I'd expect that such users would tend to stick with the tried and tested rather than using something new that might not be as reliable. Potential savings (minor in the overall business context) versus the risk of using an unproven service etc - for some users a reliable taxi service is more important than the cost.


----------



## ROE (30 April 2014)

A bit of positive news for CAB
http://www.afr.com/p/technology/nsw_rules_out_uber_ride_sharing_U5UO037O0knjmozCQfAvjI


----------



## McLovin (30 April 2014)

ROE said:


> A bit of positive news for CAB
> http://www.afr.com/p/technology/nsw_rules_out_uber_ride_sharing_U5UO037O0knjmozCQfAvjI




That was a pretty cheeky move. I don't think anyone ever thought it would go through. Pretty much everywhere Uber has tried to roll that out it has been smacked down.


----------



## Bill M (30 April 2014)

ROE said:


> A bit of positive news for CAB
> http://www.afr.com/p/technology/nsw_rules_out_uber_ride_sharing_U5UO037O0knjmozCQfAvjI




How rediculous, a bloke buys a taxi plate for 400K, buys a new car, insures it and puts it on the road for around 450K and only then he can pick up passengers legally.

On the otherhand you got the cowboys, guy buys a 2005 model camry for 5k insures it with a cheap comprehensive policy and is on the road picking up passengers for 6K. That is just plain wrong, it should never be allowed unless they pay simlar costs just like the real taxis, glad that isn't going happen.


----------



## ROE (30 April 2014)

Bill M said:


> How rediculous, a bloke buys a taxi plate for 400K, buys a new car, insures it and puts it on the road for around 450K and only then he can pick up passengers legally.
> 
> On the otherhand you got the cowboys, guy buys a 2005 model camry for 5k insures it with a cheap comprehensive policy and is on the road picking up passengers for 6K. That is just plain wrong, it should never be allowed unless they pay simlar costs just like the real taxis, glad that isn't going happen.




I think these guys are trying to see how far they can push the boundary ...
and they put on brave face if their driver get a fine they stand by them

let see if they pay 100K fine


----------



## galumay (30 April 2014)

Meanwhile i bank another nice divvy!


----------



## PinguPingu (1 May 2014)

I don't this is over...they're going to duck and weave to see how they can get around this. I mean, whats the difference between charging a mate for petrol/car sharing in general and Uber? 

The biggest risk is car road worthiness, not drivers. Sorry to say, I've had Sydney taxi drivers who drove like loonies and didn't even know major roads near the CBD. 

Disruptive technologies never go away that quickly.


----------



## McLovin (1 May 2014)

PinguPingu said:


> I don't this is over...they're going to duck and weave to see how they can get around this. I mean, whats the difference between charging a mate for petrol/car sharing in general and Uber?




Profit.


----------



## ROE (1 May 2014)

PinguPingu said:


> Disruptive technologies never go away that quickly.




No one said anything about these technologies or other players going away .....profit, time and the market will determine how long some business last.... Vodafone operates at a loss for donkey years while Telstra racked up profit each year and Vodafone still around ... 

you just have to decide which side you tag along  everyone attack TLS sometimes ago and said nothing about vodafone or three or some other mob that burning cash each year .... all they talk is how these dudes take market share away from TLS ...mean while TLS racked in profit these guys operate at a loss.

The beauty of market noises


----------



## tinhat (1 May 2014)

I'm all for disruptive technologies where there has been market failure or distortion of the economics of an industry due to government regulation or subsidy that leads to non-socially optimal market outcomes.

Bring it on. The economic and environmental benefits of car sharing/pooling warrant it. I am sure there are creative ways to provide the Uber service within the technicalities of the law - making it peer to peer, membership/subscription based etc.


----------



## Ves (1 May 2014)

McLovin said:


> Kermode resigns. Apparently he has aggressive form of cancer. Doesn't sound good at all.



News out that he passed away this morning.

My thoughts and condolences to all of his family and friends.


----------



## ROE (1 May 2014)

Ves said:


> News out that he passed away this morning.
> 
> My thoughts and condolences to all of his family and friends.




yeah sad news RIP


----------



## ROE (1 May 2014)

This is a good way to run a business 

http://www.news.com.au/technology/g...postpones-launch/story-fn6vihic-1226902368254


----------



## Bill M (1 May 2014)

ROE said:


> This is a good way to run a business
> 
> http://www.news.com.au/technology/g...postpones-launch/story-fn6vihic-1226902368254




So funny, now why would Uber drivers offer their own private cars and time to pick up drunken strangers from the biggest red light district in Australia for free when there are real taxis available to drive and they can make real money? Publicity stunt maybe?


----------



## banco (1 May 2014)

Fingers crossed Cabcharge goes bankrupt.  They are a disgraceful bunch of rent seekers.


----------



## ROE (1 May 2014)

banco said:


> Fingers crossed Cabcharge goes bankrupt.  They are a disgraceful bunch of rent seekers.




There is pray and hope and finger crossed and there is another way if you got a cool 500m you can buy them out and shut them down for good


----------



## PinguPingu (1 May 2014)

Bill M said:


> So funny, now why would Uber drivers offer their own private cars and time to pick up drunken strangers from the biggest red light district in Australia for free when there are real taxis available to drive and they can make real money? Publicity stunt maybe?





Because taxi licensing is a rip off, and so are taxis (especially that 10% surcharge for cards crap) Its a blatant market failure. What's funny is the Government trying to regulate this and prove a passenger paid for the lift 'commercially' not just giving a mate petrol money.

Real money? As long as its legal tender, money is money.


----------



## galumay (2 May 2014)

banco said:


> Fingers crossed Cabcharge goes bankrupt.  They are a disgraceful bunch of rent seekers.




Very unlikely they will be going broke in any forseeable future, they are a highly profitable company. I do wonder whether the term 'rent seekers" is really interchangeable with "profitable company i dont like".

If you are taking the high moral ground over Cabcharge you wont have many other companies in your portfolio!


----------



## Bill M (2 May 2014)

PinguPingu said:


> Real money? As long as its legal tender, money is money.




They said these drivers will work for *free, not for money*. They will be caught in no time if they take money. No shortage of people with mobile phones and cameras ready to take videos. Back to my question, why would a person drive their private car for free to pick up drunken passengers at Kings Cross when they do it for MONEY by driving a real cab? I certainly wouldn't work for free in my own car when I could hire someone elses taxi and make a living out of it.


----------



## Bill M (2 May 2014)

PinguPingu said:


> (especially that 10% surcharge for cards crap) Its a blatant market failure.




How do you think they would pay a Uber driver? By cash of course, you can pay cash in regular taxis too and avoid the 10% surcharge in it's entirety. 

Corporations like Cabcharge, they have been using it for decades. It is an easy way to get their staff and parcels around town without fiddling around looking for cash. There have been other companies around like "Taxi Credit" many years ago but they are gone now.


----------



## prawn_86 (2 May 2014)

Bill M said:


> How do you think they would pay a Uber driver? By cash of course, you can pay cash in regular taxis too and avoid the 10% surcharge in it's entirety.




Uber is completely cashless. Here in the states it is better and quicker than waiting to catch a cab and one of the biggest benefits is no money is exchanged and no tipping is required.

It automatically debits the credit card on your uber account, and I believe the drivers get 80-90% of the fare


----------



## Bill M (2 May 2014)

prawn_86 said:


> Uber is completely cashless. Here in the states it is better and quicker than waiting to catch a cab and one of the biggest benefits is no money is exchanged and no tipping is required.
> 
> It automatically debits the credit card on your uber account, and I believe the drivers get 80-90% of the fare




Ok so it works by crdit card payment over there, here the law has not changed.

---
“The law is clear and has not changed: *if a NSW driver is taking paying members of the public as passengers*, the driver and the vehicle must operate in accordance with the Passenger Transport Act,” Transport for NSW said in a statement on Wednesday morning.

“Under the Act, such services must be provided in a licensed taxi or hire car, by an appropriately accredited driver, authorised by Roads and Maritime Services,” the statement said.

“A person who carries on a public passenger service in breach of the Act may face prosecution and fines of up to $110,000. 

http://www.afr.com/p/technology/nsw_rules_out_uber_ride_sharing_U5UO037O0knjmozCQfAvjI
---


----------



## ROE (2 May 2014)

This is CAB best friend not competitor -
Look like they willing to break the laws, do
Stuff for free, not engage the regulators..

Sound like Uncle Sol from TLS not long ago having
A punch out with the government

When people get this defensive it usually hurts some where for the rage to come out
Could be fear could be burning cash at a fast pace could be too hard
to break the iron wall


----------



## skc (2 May 2014)

Ves said:


> News out that he passed away this morning.
> 
> My thoughts and condolences to all of his family and friends.




Paul Ramsey of RHC died of a heart attack. A bad week for ASX company chairs.


----------



## ROE (2 May 2014)

skc said:


> Paul Ramsey of RHC died of a heart attack. A bad week for ASX company chairs.




yeah, that was mighty quick as well, he was admitted to hospital like a few weeks ago.
Moral of the story, quit while you young and healthy


----------



## McLovin (2 May 2014)

Bill M said:


> How do you think they would pay a Uber driver? By cash of course, you can pay cash in regular taxis too and avoid the 10% surcharge in it's entirety.
> 
> Corporations like Cabcharge, they have been using it for decades. It is an easy way to get their staff and parcels around town without fiddling around looking for cash. There have been other companies around like "Taxi Credit" many years ago but they are gone now.




You can't use the app without entering a valid credit/debit card. It is completely cashless. I don't think corporations "like" Cabcharge, it's just that there weren't any other viable alternatives. The beauty of Uber when you book a taxi through it is you get in and get out at your destination, no need to produce cash or a CC.

Anyone who thinks Cabcharge isn't a rort must have shares in Cabcharge. The cost to process a transaction is fixed, yet the fee charged varies depending on the amount of the fare. A complete rort.



			
				skc said:
			
		

> Paul Ramsey of RHC died of a heart attack. A bad week for ASX company chairs.




I know a few people who were friends with him. A very good bloke by all acounts.


----------



## Bill M (2 May 2014)

McLovin said:


> Anyone who thinks Cabcharge isn't a rort must have shares in Cabcharge. The cost to process a transaction is fixed, yet the fee charged varies depending on the amount of the fare. A complete rort.




Can't people use Visa, Amex or Dinners? The last time I looked I thought these options were available. 

If cabcharge is so bad then why do people/corporations use it? Taxi divers like the vouchers too, they can use it as cash to buy LPG and Taxi hire for the night, it's like cash to them.


----------



## banco (2 May 2014)

galumay said:


> Very unlikely they will be going broke in any forseeable future, they are a highly profitable company. I do wonder whether the term 'rent seekers" is really interchangeable with "profitable company i dont like".
> 
> If you are taking the high moral ground over Cabcharge you wont have many other companies in your portfolio!




They are rent seeking scum because their whole business model is built on controlling the regulatory framework for taxis through their political donations etc.


----------



## McLovin (2 May 2014)

Bill M said:


> Can't people use Visa, Amex or Dinners? The last time I looked I thought these options were available.




You still get whacked 10% for using a Cabcharge terminal.



Bill M said:


> If cabcharge is so bad then why do people/corporations use it? Taxi divers like the vouchers too, they can use it as cash to buy LPG and Taxi hire for the night, it's like cash to them.




See above. Even if you're not using a Cabcharge voucher/card you still get charged by them. There's no choice other than giving employees cash.


----------



## galumay (2 May 2014)

banco said:


> They are rent seeking scum because their whole business model is built on controlling the regulatory framework for taxis through their political donations etc.




ORLY! Find me a business that doesnt seek to control regulatory impacts that way?! Have you met Rio and BHP? WOW?...etc etc.


----------



## PinguPingu (2 May 2014)

Bill M said:


> They will be caught in no time if they take money. No shortage of people with mobile phones and cameras ready to take videos.





Oh? Uber is cashless, there is no 'visible' transaction. Quite difficult as a member of the boys in blue or some other Government worker to prove that the person who just got out of a normal car was a customer of an uber driver and not just a regular dude getting out of a mates car. 


People are driving for Uber because the barrier to entry is far less than driving a 'real' taxi.

Also, from memory didn't the RBA regulate a limit on credit card surcharges? Woudn't cab charge be in breach with their ridiculous 10% blanket fee? If so, looks like they're also operating in the grey area of the law.


----------



## Smurf1976 (2 May 2014)

Bill M said:


> If cabcharge is so bad then why do people/corporations use it?




If I'm running a business and have employees who need to use taxis for business travel then my options are (1) give them cash and take their word for it regarding the cost of the taxi (2) give them a company credit card (3) use Cabcharge.

Many bosses prefer a method like Cabcharge simply because it's not so open to abuse when compared to handing out credit cards or cash. It's not totally safe in that regard, but it's the most accountable option available at present. Government departments in particular really struggle with handing employees cash for expenses from an administrative perspective - it's the last resort method of payment, any other means being preferable even if it costs more.

Also there is a point that most don't question the system and the term "Cabcharge" is used as though it were something other than a privately owned company. Eg if you have internal paperwork to complete for business travel, then in many cases you'll find it referred to as "cab charge". 

I suspect that if you asked 100 random people, a large proportion would have no idea that Cabcharge is an ASX listed company. I suspect that most would assume that it's either a service provided by the major banks or is just a generic term (ie "cab charge") that taxi companies use in reference to non-cash payment. I doubt that the average person realises the true nature of it.

Also, the cost of using it would be a minor expense for practically everyone (relative to the overall cost of running a business or household). Businesses worry about staff costs, getting work / sales in the first place, rent on buildings, vehicle fleet costs possibly, energy in some industries and so on. Households focus on mortgage payments, insurances, utilities, food etc. Nobody really spends enough paying the Cabcharge 10% fee to warrant seriously questioning it, it just doesn't come up as a big enough expense to worry about for anyone looking at a budget either business or personal.


----------



## Bill M (2 May 2014)

McLovin said:


> Even if you're not using a Cabcharge voucher/card you still get charged by them.




I didn't know that, now I can see why people are upset about these charges.


----------



## Bill M (2 May 2014)

PinguPingu said:


> People are driving for Uber because the barrier to entry is far less than driving a 'real' taxi.




I think this may end up in court in the end. The Roads and Maritime Services vs Uber, the case being whether the drivers are receiving financial reward either directly or indirecly and therefore breaking the law. Anyhow I'm interested to see where this ends up.

Smurf1976, thanks for that, I agree with your post and explanation.


----------



## DJG (3 May 2014)

Bill M said:


> I think this may end up in court in the end. The Roads and Maritime Services vs Uber, the case being whether the drivers are receiving financial reward either directly or indirecly and therefore breaking the law. Anyhow I'm interested to see where this ends up.




Suppose it makes it hard being that they don't employ a single driver. They're just a gateway between driver and passenger.
The law seems extremely grey when it comes to new issues they never thought would even exist.


----------



## ROE (3 May 2014)

DJG said:


> Suppose it makes it hard being that they don't employ a single driver. They're just a gateway between driver and passenger.
> The law seems extremely grey when it comes to new issues they never thought would even exist.




Got nothing to do with Uber, the regulator going after the drivers but I think Uber is being vague with the drivers that they may be breaking the law by picking up paying customers without proper license and all the paper work that goes with operating a hire car business.

The law is the law it maybe bad or some people may not like it but you have to obey it until such time 
the law no longer exist or change...you cant have people going around breaking the laws without getting penalise, it wont be a civilise society.


----------



## ROE (8 May 2014)

http://www.theage.com.au/digital-li...s-as-media-gaffe-surfaces-20140508-zr6yp.html


----------



## tinhat (8 May 2014)

So that is what Graeme Samuel is up to these days "Taxi Services Commissioner". What a dud.


----------



## ROE (12 May 2014)

Lot of scary articles on CAB ... anyone want to sell I have some fund for a trade 

http://www.afr.com/p/business/sunday/cabcharge_faces_tough_road_ahead_iI0xl1qH8PPkNT3UdTKyhO


----------



## ROE (16 May 2014)

All about vision not profit luck is on their side when money is cheap and come out free from the printer so people can speculate on potential  

http://www.theage.com.au/business/w...ised-to-join-the-10b-club-20140516-38dk5.html


----------



## qldfrog (29 May 2014)

http://www.brisbanetimes.com.au/dig...rideshare-the-green-light-20140529-zrrm2.html
could be a sell incentive....


----------



## Smurf1976 (29 May 2014)

Once one state does it, the others usually follow in due course.

There's probably an exception or two somewhere, but in general that's how the Australian states work. Once a significant change from the status quo (in anything) is introduced in one state the others eventually follow.


----------



## McLovin (30 May 2014)

Smurf1976 said:


> Once one state does it, the others usually follow in due course.
> 
> There's probably an exception or two somewhere, but in general that's how the Australian states work. Once a significant change from the status quo (in anything) is introduced in one state the others eventually follow.




I agree. At the very least it might make the governments end up taking an approach similar to London, with the more expensive metered black cabs and less expensive minicabs. On the other hand, it won't take much (assault of passenger or driver) to shut the whole thing down. But Uber does give users (both drivers and passengers) ratings, so it's not like picking someone up cold off the street.

Here's a comparison of UberX compared to a cab fare...

I know a few people who have used it and they really liked it.


----------



## prawn_86 (30 May 2014)

McLovin said:


> I know a few people who have used it and they really liked it.




Here in LA it is pretty much impossible to get a cab so we just about only use Uber. Always felt totally safe.

Its just a matter of if the Aus regulations will allow it, and with so many easily accessible cabs in Aus Uber would have to be planned rather than just hailing a cab


----------



## craft (30 May 2014)

prawn_86 said:


> Here in LA it is pretty much impossible to get a cab



 Why?


----------



## McLovin (30 May 2014)

prawn_86 said:


> Here in LA it is pretty much impossible to get a cab so we just about only use Uber. Always felt totally safe.




Yeah, I've experienced trying to get a cab in LA. It's easy enough from a hotel but trying to get one off the street is like trying to get blood out of stone. Although in Sydney on a Friday/Saturday night it's all but impossible after about 1:30am.


----------



## prawn_86 (31 May 2014)

craft said:


> Why?




I think its a number of reasons, but they are all just my theories. I think there are less cabs per capita, spread out over a much, much bigger geographical distance than a centralized Australian city. And if you do happend to see one, cabs here generally also dont take passengers just off the street (aside from hotels and airports), you need to book ahead, whether that is a safety thing i am unsure.


----------



## Hoborg (2 June 2014)

Not totally related to CAB, but definitely to Uber, this talk on behavioural economics and how it fits into the taxi business model is interesting:
http://www.farnamstreetblog.com/2014/05/rory-sutherland-this-thing-for-which-we-have-no-name/
(Go to 42:38)

The whole talk is definitely worthwhile IMO.


----------



## TikoMike (22 June 2014)

qldfrog said:


> http://www.brisbanetimes.com.au/dig...rideshare-the-green-light-20140529-zrrm2.html
> could be a sell incentive....




http://www.brisbanetimes.com.au/que...oser-to-uber-app-approval-20140621-zshh6.html

So much for "not regulating".


----------



## piggybank (19 July 2014)

So you want to earn extra cash!!

https://partners.uber.com/signup/me..._medium=boss_EarnCashHours_Make30_28510930510

Make $30 an hour in Melbourne driving your own car. No previous driving experience required.


----------



## KnowThePast (19 July 2014)

piggybank said:


> So you want to earn extra cash!!
> 
> https://partners.uber.com/signup/me..._medium=boss_EarnCashHours_Make30_28510930510
> 
> ...





Lower prices and higher costs - a great competitive advantage. But one that is not going to make money.

It will be interesting to see how much money they'll end up spending and how long they will keep up the assault.


----------



## JTLP (21 July 2014)

http://www.huffingtonpost.com/david-fagin/life-as-an-uber-driver_b_4698299.html

Have a read of this...it may not be all roses for Uber drivers.

PS I actually took Uber for the first time the other day and absolutely loved it. Ripper service and the guy was a champion + cheaper than a taxi.


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## McLovin (22 July 2014)

JTLP said:


> http://www.huffingtonpost.com/david-fagin/life-as-an-uber-driver_b_4698299.html
> 
> Have a read of this...it may not be all roses for Uber drivers.
> 
> PS I actually took Uber for the first time the other day and absolutely loved it. Ripper service and the guy was a champion + cheaper than a taxi.




It is a great service. I landed in Rio a couple of weeks ago requested a black car while I was waiting at immigration, friendly driver was waiting for me when I walked out. Did the same on return to Sydney. No cash, nothing to sign.


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## Huskar (12 August 2014)

Now strongly through 52 week high..


----------



## goccipgp (12 August 2014)

It has an ongoing P/E of 9.13, which indicates that it is undervalued, according to au stoxline.


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## prawn_86 (12 August 2014)

Interesting move, nothing spectacular in the volume. Hard one to read


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## ROE (12 August 2014)

CAB has been a dog lately 

and despite all the threat and all the negativity around it
under $4.00, if you applied the worse case scenario toward it you can still come out better than $4
bucks at the end of it but if not you have a decent chance of making very good return.

with that calculated risk I bought more for my SMSF at $3.85 and still hold on.

Same reason I bought TLS at $2.64

at some point the market price the business so bad it becomes a very low risk play despite its problem.

I made the same calculation on FXJ but I didnt buy for some reason   DOH!!


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## galumay (12 August 2014)

ROE said:


> CAB has been a dog lately
> 
> and despite all the threat and all the negativity around it
> under $4.00, if you applied the worse case scenario toward it you can still come out better than $4
> ...




Agreed, I bought at just under $4 applying similar reasoning. Picked up nice yield while watching a steady increase in capital value.


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## xinyucao (18 August 2014)

If UBER continues to grow, is CAB a good shorting stock next year?


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## hiddencow (18 August 2014)

The market sentiment on CAB seems to have turned around quite a bit.
Price has run up without any new economic news except for the associate figures which had a slightly negative impact on release.

Results out this Thursday, won't get the full impact of the taxi reforms yet though so we might have to wait until 2015. Hopefully, in that time organic growth of taxi use and card usage will offset the lower fee percentage somewhat.

I got in at 3.70 a few months earlier, it's certainly not cheap anymore with the risks hanging over it. I'm hoping after all the reform effects are passed and known, CAB can regain it's premium status and multiple, much in the same way Telstra has.


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## goccipgp (20 August 2014)

CAB has an ongoing P/E of 9.43 according to au stoxline, which indicates that it is still undervalued. Would like to see a break above 5.00.


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## galumay (20 August 2014)

goccipgp said:


> CAB has an ongoing P/E of 9.43 according to au stoxline, which indicates that it is still undervalued. Would like to see a break above 5.00.




Personally I wouldn't use P/E as an indicator of value, and I think its getting close to IV unless CAB can get the earnings growing again and avoid further regulatory impacts. I think the diversification is starting to help the business, although there have been a few bumps in the road this year with the loss of contracts.

I did consider selling this week, but on reflection I am going to hang in there, the dividend is up round 6.8% on my buy price so cant complain about that.


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## prawn_86 (24 August 2014)

No comments on the recent results?

Seems to have found some support from the market with a lot of buying recently


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## hiddencow (24 August 2014)

Sold out the majority of my position.
$4.5million impact on revenue from just 5 months of the 5% fee in Victoria. Once it's implemented in NSW as well for a full year there is going to be a major impact on revenues and profits. Although there was higher turnover, this was no where near enough to make up for the lower %. Doesn't look like there is much growth elsewhere to compensate for the loss either.
Bus business requires a lot of capital for an ok return and the UK business still a disaster and will probably require further impairments.

The market keeps pushing it up though and at these prices, I'll take the money.


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## piggybank (28 August 2014)

Although the story was released on Monday, I thought some of those who hadn't seen it might like to know what's going on with Uber, especially in South Australia.

Ride-sharing company Uber is operating illegally in South Australia and its drivers should expect to be fined, the state treasurer says. The California-based company held its official Adelaide launch on Friday, with Port Adelaide captain Travis Boak and Adelaide captain Nathan van Berlo sharing its first service. Uber allows ordinary drivers to offer a ride-sharing service and the company claims a typical fare will cost less than the average Adelaide taxi.

The service is limited to licensed drivers aged at least 24, whose vehicle has at least four doors and was manufactured after 2005. But Treasurer Tom Koutsantonis says.....

https://au.news.yahoo.com/a/24801558/uber-drivers-will-be-fined-sa-govt/


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## qldfrog (28 August 2014)

pushing the delay a bit further but seriously CAB better carry on paying the brides (off course legal) it does to the policy makers and make hay while it can 
aka sucking the suckers (us) while the sun shines
who do I trust more, a yellow cab driver or Uber;
unless you live in a different world from mine, the usual taxi driver conversation I have had for the last 5 years in Brisbane (mostly daytime for work /business meeting) has been:
I 'd like to go to......(usually within a 5km radius of CBD)
after 2 minutes wasted with at a driver trying to be on the road while typing on his gps with wrong spelling
..I will guide you if you want...
you go right//left/etc

then you have a chat :
how long have you been there?
usually between 3 weeks and 3 months, never years
Usually friendly guys by the way, horrendous driving but nice....
anecdotal sure but thinking about it probably 15 times out of 20 or so in the last year only.

So these highly checked persons have to be more trusted than Uber?
People hate taxi companies and do not trust them, feel rorted, and i never use a credit card within taxi irrespective of amount due to this total lack of trust (and you'd better check the change)
CAB has a product which has a temporary shelf life and is now in my opinion expired.
I do not own (but could for trading, not for investing)
DYOR and yeollow cab was just example, I used both yellow and B&W


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## prawn_86 (30 August 2014)

Interesting to note that 2 Singaporean based funds are increasing their holdings. Aberdeen Asia now owns >15% and FIL has just ticked over the 5% mark, so 20% held between them.

What are they seeing that everyone here isn't?


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## galumay (30 August 2014)

prawn_86 said:


> Interesting to note that 2 Singaporean based funds are increasing their holdings. Aberdeen Asia now owns >15% and FIL has just ticked over the 5% mark, so 20% held between them.
> 
> What are they seeing that everyone here isn't?




Well not everyone! I am happy to continue to hold. I think a lot of the negative sentiment here and elsewhere is emotionally driven. I am more focussed on the actual business and its financials.


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## VSntchr (30 August 2014)

qldfrog said:


> CAB has a product which has a temporary shelf life and is now in my opinion expired.
> I do not own (but could for trading, not for investing)
> DYOR and yeollow cab was just example, I used both yellow and B&W




You know, this is quite a common theme on ASF and elsewhere..and I don't completely disagree.
I get annoyed if I go to pay for fuel at (I think its Caltex??) and they charge me 1.5%....now 10% is just a smack in the face  !

I have never really looked deep enough into CAB to understand exactly how they make their money. I know it is from the 10% (or 5% in some states?) surcharge on Credit Card payments..but what exactly justifies the charge? Is it merely the fact that they have an exclusive agreement with the Cab companies to facilitate the CC terminals that are used? Do they provide any other 'service'? Do they provide the Cab companies with any other assets or service?
Hoping that a holder can save me the effort of reading a few more reports to find out!


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## ROE (30 August 2014)

VSntchr said:


> You know, this is quite a common theme on ASF and elsewhere..and I don't completely disagree.
> I get annoyed if I go to pay for fuel at (I think its Caltex??) and they charge me 1.5%....now 10% is just a smack in the face  !
> 
> I have never really looked deep enough into CAB to understand exactly how they make their money. I know it is from the 10% (or 5% in some states?) surcharge on Credit Card payments..but what exactly justifies the charge? Is it merely the fact that they have an exclusive agreement with the Cab companies to facilitate the CC terminals that are used? Do they provide any other 'service'? Do they provide the Cab companies with any other assets or service?
> Hoping that a holder can save me the effort of reading a few more reports to find out!




They make a lot of money from payment but they are more than just a payment company ....their grip on
the taxi infrastructure enable them to do this....other don't have the same grip so they cant make the same money as CAB.

Market doesn't agree up until now but with their hooks in the industry, I say they are nearly unbreakable 
monopoly, other payer can comes up with competing products but unless you have CAB iron grip on the infrastructure it nearly impossible for anyone to break their grip.

They do taxi finance, insurance, driver training, radio network, bus transport, one of the best EFT solution provider (some banks outsource their work to CAB for this) 

There are more to CAB than meet the eye but the scary headline usually scarier than the reality

the 5% charge maybe blessing in disguise as you need even more volume to be profitable and only CAB has the volume most other players will slowly bleed and dies.

plenty of stories on smaller players trying to steal other player customers with dirty tricks to make up volume all play nicely in CAB hand ....


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## ROE (30 August 2014)

VSntchr said:


> I have never really looked deep enough into CAB to understand exactly how they make their money. I know it is from the 10% (or 5% in some states?) surcharge on Credit Card payments..but what exactly justifies the charge?




they take 5% on total bill, say your trip cost $100, CAB charge you $105 if you paid with credit card or cabcharge
anything but cash, you have an option to pay cash $100 and it cost you nothing extra.

CAB provide all the payment terminal in the Taxi mostly free of charge and develop EFT solution to process
these payment, they also wear the risk of default, taxi driver always get pay, all these upfront capital CAB has to fund and they recoup via the 5% surcharge

it cost a lot of money initially but as time goes on they have the advantage of charging the same but spend less
on their network, so the argument they arent allow to do this is a bit rich, just because they successful fund 
and create a taxi payment network that make them money.

what if that investment didn't pay off? who pay? people has the option of paying cash and don't face the surcharge so people do have a choice, pay cash or pay with card.

and that is also their competitive advantages, anyone want to get into this game,  has to fund the initial large capital cost with CAB at the door, you can try and steal CAB customers but CAB can hit you back with a bleeding noise by matching your payment or better and slowly bleed you.

they have the financial strength to bleed you where the new player cant.


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## TikoMike (30 August 2014)

prawn_86 said:


> Interesting to note that 2 Singaporean based funds are increasing their holdings. Aberdeen Asia now owns >15% and FIL has just ticked over the 5% mark, so 20% held between them.
> 
> What are they seeing that everyone here isn't?




No disrespect, but you need to re-read the thread buddy.

Also Fidelity do their homework pretty thoroughly, it wouldn't surprise me if they had a long talk with Andrew Skelton.


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## Smurf1976 (30 August 2014)

ROE said:


> anyone want to get into this game,  has to fund the initial large capital cost with CAB at the door




CAB has an effective monopoly on what could be considered a utility-like services. Practically every city in the world has taxis, and in Australia's case CAB has a monopoly on non-cash payment in a society that increasingly prefers to pay by non-cash means.

I can foresee a situation where government mandates that CAB allows rivals to use their infrastructure for a fee in much the same way as Telstra (for example) has to allow competitors access to its' communications network. Needless to say, the fee charged to competitors would be set by government regulation, not by CAB. Other natural monopoly industries have been down this track already so it's not a new idea.

The biggest risk I see with CAB is political. If you have a monopoly then sooner or later government takes in interest and that's especially so in an industry (taxis) which is already more heavily regulated than most.


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## galumay (30 August 2014)

Smurf1976 said:


> CAB has an effective monopoly on what could be considered a utility-like services. Practically every city in the world has taxis, and in Australia's case CAB has a monopoly on non-cash payment in a society that increasingly prefers to pay by non-cash means.
> 
> I can foresee a situation where government mandates that CAB allows rivals to use their infrastructure for a fee in much the same way as Telstra (for example) has to allow competitors access to its' communications network. Needless to say, the fee charged to competitors would be set by government regulation, not by CAB. Other natural monopoly industries have been down this track already so it's not a new idea.
> 
> The biggest risk I see with CAB is political. If you have a monopoly then sooner or later government takes in interest and that's especially so in an industry (taxis) which is already more heavily regulated than most.




Maybe that could happen, although I am not sure the Telstra analogy is a good one. It was OUR infrastructure, owned by the taxpayers, then by slight of hand the government of the day stole our infrastructure and then sold it back to us by floating Telstra! Then the government had to regulate to allow access to our infrastructure by other companies to break a rorting monopoly.

In the case of CAB i think there are some legislative risks, although as ROE has pointed out they may actually play into CAB's hands, any monopoly is much less obvious than the sense that telstra held a monopoly over our telecommunications infrastructure.


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## ROE (30 August 2014)

There is nothing stopping other players building a similar infrastructure to CAB, in fact there are player doing that already GM cabs, and dozen of other smaller and apps player...whether you are profitable or not is another story.

Just like Coke distribution network, you can start up a new soft drink that may taste better than
coke and build the distribution network to supplies them to all corners of Australia, whether you are 
profitable or not is another story.

I call CAB monopoly but technically they are not because you can pay with cash
but they have system that mirror a monopoly without being a monopoly if I can explain it right

where as TLS in Australia, there is no alternative to use the copper line, I cant just run a plastic cable to my house and use it for the phone ... but CAB you do have a choice, cash, no one force you to pay with plastic card.

I guess I can call Coke distribution network a monopoly too because no one can replicate its distribution network without spending multi Billions and with that there are chance they aren't make a cent profit so effectively coke distribution network that is a near unbreakable monopoly.


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## piggybank (8 September 2014)

Hi,

I thought that this maybe of interest to those with opinions (good or bad) about Uber. I'm not sure if you have to join up in order to read the thread which is 99 pages long 

Here is the link:- http://forums.whirlpool.net.au/forum-replies.cfm?t=2253674&p=99

Regards
PB


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## McLovin (9 September 2014)

piggybank said:


> Hi,
> 
> I thought that this maybe of interest to those with opinions (good or bad) about Uber. I'm not sure if you have to join up in order to read the thread which is 99 pages long
> 
> ...




That discussion seems to be about UberX, not Uber. Interestingly, I was passing through LA last week and apparently California has come up with a new set of regulations to deal with ride sharing type services which addresses things like insurance. This is how I see Uber playing it in Australia. Once people have a taste of something it's very hard for a politician to take it away (unless they want to lose their job) so instead they will regulate it. That seems to be Uber's disruptive model to force regulatory change. Pretty much every large city in the world has a resident Cabcharge and they're all complaining.


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## TPI (10 September 2014)

*Re: CAB - Cabcharge Australian*

Anyone know what proportion of CAB's revenue and/or earnings come from payments as opposed to other services like taxi finance, taxi insurance etc.?

Will new methods of payment like using iPhones threaten CAB's infrastructure?

Will the EFTPOS machine become obsolete if payments can be made for free with an iPhone app?

Chequebooks, coins, notes, credit/debt cards a thing of the past?

Just playing devil's advocate here, not owning CAB at present.


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## Smurf1976 (10 September 2014)

*Re: CAB - Cabcharge Australian*



TPI said:


> Chequebooks, coins, notes, credit/debt cards a thing of the past?




Ask someone under 30 about cheques and they'll assume you mean a bank cheque or one issued by a large business or government department. Those are the only people who can issue cheques, right? Personal cheques are already pretty much finished - an entire generation has basically never used them.


----------



## ROE (11 September 2014)

*Re: CAB - Cabcharge Australian*



TPI said:


> Anyone know what proportion of CAB's revenue and/or earnings come from payments as opposed to other services like taxi finance, taxi insurance etc.?
> 
> Will new methods of payment like using iPhones threaten CAB's infrastructure?
> 
> ...




Coins and Notes will still exist in some form
far from the dead of credit card, it will grow at a faster fast in place of cash.

Despite all the advance, credit card still the best and very convenient way to pay for most things

I got CBA pay tag on my iPhone and all other form of electronic payment, after a while
I find it a bit of a hassle and reverse to credit card ... 

much easier to pull out the plastic card, than fumble through the iPhone or fire up the apps and then half of
the time it doesn't work as well as the credit card and when it does it limit your purchase to $100
so you have to use credit card anyway if it is above $100 bucks.

after a while it is just too much hassle and I just going back using credit card.
these stuff are nice to have in an emergency but for day to day I just pull out the credit card.

Anything is possible but at this stage lot of noises but I don't see it make much of an impact
on CAB, those who think it will are jumping the gun and don't understand CAB business that well.

5% regulation has much more impact but then again it not just CAB everyone else get hits as well
as I mentioned earlier maybe blessing in disguise.

According to the expert at morningstar analyst CAB has absolutely no moat whatsoever so they say sell away


----------



## galumay (11 September 2014)

Apple's iWallet will be a massive gamechanger, it is typically Apple, others have fiddled around the edges with half arsed NFS systems, despite consumer critisism Apple waited until they had nailed it and then released it. 

Its a whole new ball game, its super secure, much better than physical credit cards, and will take over where ever you currently use a credit card. 

It will take a while to filter through to all payment points obviously, and I have no idea what abilty CAB will have to negotiate a fee for use like they currently do for credit cards, but I suspect this may be a bigger threat than legislation or Uber.


----------



## piggybank (11 September 2014)

Up just over 7% today on no news released to the market - any idea(s) why?

Cheers
PB


----------



## galumay (11 September 2014)

piggybank said:


> Up just over 7% today on no news released to the market - any idea(s) why?
> 
> Cheers
> PB




No, but there has been a LOT of support for CAB lately, something unfolding i guess.


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## ROE (11 September 2014)

piggybank said:


> Up just over 7% today on no news released to the market - any idea(s) why?
> 
> Cheers
> PB




Maybe a take over target from their Singaporean friends
They virtually own half of Asia public bus and taxi transport and they have a large stake in CAB

just speculating, decent volume up 7% something has to be brewing and 10c Div still coming in 2 weeks


----------



## TPI (11 September 2014)

*Re: CAB - Cabcharge Australian*



ROE said:


> Anything is possible but at this stage lot of noises but I don't see it make much of an impact
> on CAB, those who think it will are jumping the gun and don't understand CAB business that well.
> 
> 5% regulation has much more impact but then again it not just CAB everyone else get hits as well
> ...




Fair points ROE, regardless of the method of payment CAB may still be able to take advantage, exactly how it pans out is perhaps too early to tell.


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## TPI (11 September 2014)

galumay said:


> Apple's iWallet will be a massive gamechanger, it is typically Apple, others have fiddled around the edges with half arsed NFS systems, despite consumer critisism Apple waited until they had nailed it and then released it.
> 
> Its a whole new ball game, its super secure, much better than physical credit cards, and will take over where ever you currently use a credit card.




This was my initial feeling too, but widespread adoption might take some time.

Here is an interesting article on Apple Pay and near field communication (NFC) technology:

http://www.forbes.com/sites/stevenb...ay-is-doomed-unless-it-can-do-these-7-things/

I think payments is an area where there maybe disruption with technological innovation, so something to be mindful of.

Others have failed in this area, so it will be interesting to see how well Apple executes on this.


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## ROE (11 September 2014)

at of the day you got to make a judgement call on the business and if you not comfortable owning it then don't
stock market has lot of noises and it is important you have enough knowledge to counter these noises and be your own man...listening to someone else could be costly including me..

this is one of the report on CAB post about a week or so ago and if you just follow these noises you would have missed out 10% run after that.

“We rate Cabcharge as a no-moat company with high fair value uncertainty.”
Morningstar’s “no-moat” classification means the company returns will gravitate towards its cost of capital more quickly than company with “moats”.

for at least 2 years now everyone call CAB worth in their $2 or $3 but it refuses to trade any where near that level all that time ....


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## ROE (11 September 2014)

TPI said:


> This was my initial feeling too, but widespread adoption might take some time.
> 
> Here is an interesting article on Apple Pay and near field communication (NFC) technology:
> 
> ...




I like Apple products and I have lot of their products but this is something where they just be another payment guy in a crowded market.

what they doing is similar to paypal, what apple can comes up paypal can do the same with their paypal apps.. 

Paypal is pretty good where they lack other features are not them per say but they limit by the hardware available... if Apple comes up with NFC and embed chips and all the other stuff in their phone, paypal can easily make use of those new technology via their apps

it can use the same API call as Apple and paypal already has a foothold, most people are already on paypal and they just end up using paypal unless apple offer something remarkably better or some sort of freebie I cant see them upsetting the existing guy like paypal


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## McLovin (11 September 2014)

The base case for me is that in ten year's time CAB's payment business will be very different. As is the incumbent they have a natural advantage however new technology has shown over and over again to be the worst enemy of the entrenched rent seeker. I have little confidence in CAB's ability to adapt. Maybe I'll be wrong. I'm happy to watch from the sidelines.


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## TikoMike (11 September 2014)

McLovin said:


> The base case for me is that in ten year's time CAB's payment business will be very different. As is the incumbent they have a natural advantage however *new technology has shown over and over again to be the worst enemy of the entrenched rent seeker*. I have little confidence in CAB's ability to adapt. Maybe I'll be wrong. I'm happy to watch from the sidelines.




Not to put you on the spot McLovin, but do you have any specific examples to elaborate your point on "rent seekers" being done over and over again?


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## McLovin (11 September 2014)

TikoMike said:


> Not to put you on the spot McLovin, but do you have any specific examples to elaborate your point on "rent seekers"?




Rent seeking was probably not the best choice of words. Although I think CAB earns rent, I was thinking more along the lines of the lazy, un-innovative incumbent. FXJ is the one that comes straight to mind and guys like Uber are far better funded than SEK, REA or CRZ were in their start up days.

Think about it this way, virtually everyone who uses Uber uses it because they like the product, no one uses CAB for any other reason than there is no other option.


----------



## TPI (11 September 2014)

ROE said:


> at of the day you got to make a judgement call on the business and if you not comfortable owning it then don't
> stock market has lot of noises and it is important you have enough knowledge to counter these noises and be your own man...listening to someone else could be costly including me.




Yes well said, not enough knowledge and reading too many opinions... a dangerous combination! 

I am still learning this - just need more spare time to build the knowledge part .


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## TikoMike (11 September 2014)

McLovin said:


> Rent seeking was probably not the best choice of words. Although I think CAB earns rent, I was thinking more along the lines of the lazy, un-innovative incumbent. FXJ is the one that comes straight to mind and guys like Uber are far better funded than SEK, REA or CRZ were in their start up days.
> 
> Think about it this way, virtually everyone who uses Uber uses it because they like the product, no one uses CAB for any other reason than there is no other option.




I disagree that they had no choice, people have always had a choice even before Uber. ie cash. I wouldn't label CAB as being lazy given how they have been changing their existing products and diversifying into other transport areas. Kind of like saying Coca-cola are lazy for selling the same products for the last 100 years.


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## McLovin (11 September 2014)

TikoMike said:


> I disagree that they had no choice, people have always had a choice even before Uber. ie cash. I wouldn't label CAB as being lazy given how they have been changing their existing products and diversifying into other transport areas. Kind of like saying Coca-cola are lazy for selling the same products for the last 100 years.




Find me a company that prefers its employees to pay cash rather than use a credit card. 

As for diversifying, the economics of a bus company are very different to those of their payment system. I'm sitting in an airport about to get on a flight but from memory, CAB's bus venture has about $1b in assets and generates the same EBIT as their taxi/payment service which has about $250m in assets.


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## TikoMike (11 September 2014)

McLovin said:


> Find me a company that prefers its employees to pay cash rather than use a credit card.
> 
> As for diversifying, the economics of a bus company are very different to those of their payment system. I'm sitting in an airport about to get on a flight but from memory, CAB's bus venture has about $1b in assets and generates the same EBIT as their taxi/payment service which has about $250m in assets.




If the company "prefers" then how is that forced? Not trying to start arguments but sorry that's an oxymoron if I have ever seen one.

Economics is now a different subject, I was addressing your accusation of them being lazy and un-innovative.


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## galumay (12 September 2014)

ROE said:


> it can use the same API call as Apple and paypal already has a foothold, most people are already on paypal and they just end up using paypal unless apple offer something remarkably better or some sort of freebie I cant see them upsetting the existing guy like paypal




Its a lot different to Paypal, as I said the implementation and security with iWallet is going to be a game changer, not just in the case of CAB, but across the board. There are good reasons Apple took so long to come to the market with NFS technology and its not about the reader, its all about the implementation, security and ease of use.

Its going to take a couple of years to take over, but I think people will be well advised to do some research and have a think about how it make affect our lives - and therefore our investments.


----------



## prawn_86 (12 September 2014)

galumay said:


> Its going to take a couple of years to take over, but I think people will be well advised to do some research and have a think about how it make affect our lives - and therefore our investments.




As someone with an Apple logo in their avatar you may be biased?

Android actually has a bigger market share than iOS, so if Apple only has 50% of the mobile market I don't see how it can 'take over'. It will likely be another product for Apple fanboys and something similar and possibly better could come along on Android


----------



## VSntchr (12 September 2014)

prawn_86 said:


> As someone with an Apple logo in their avatar you may be biased?
> 
> Android actually has a bigger market share than iOS, so if Apple only has 50% of the mobile market I don't see how it can 'take over'. It will likely be another product for Apple fanboys and something similar and possibly better could come along on Android




I agree.
Apple was a game changer with the iPod...because at the time the alternative was crap.
Payments is different, I like my physical wallet...and I don't wan't to ditch it...sure I may become a user of some sort of phone payment method - but I don't see it taking over completely, just an additional option for me.


----------



## ROE (12 September 2014)

galumay said:


> Its a lot different to Paypal, as I said the implementation and security with iWallet is going to be a game changer, not just in the case of CAB, but across the board. There are good reasons Apple took so long to come to the market with NFS technology and its not about the reader, its all about the implementation, security and ease of use.
> 
> Its going to take a couple of years to take over, but I think people will be well advised to do some research and have a think about how it make affect our lives - and therefore our investments.




you just spruike the apple marketing crab before they even has anything to prove... iWallet was a massive failure
now they comes up with Apple Pay, just like they try Ping in itunes to get into facebook space...they failed that too and decommission that as well...They are good at making Phones and computer doesn't mean they are good in other area.

History will tell you, it is not easy to unseat the incumbent like paypal or other establishing system when that is
not your main business. 

I know what Apple Pay is all about and it not that different from paypal
they still takes your credit card and you use use their payment system to pay 

the way they implement them maybe difference but the process is EXACTLY the same.

Let just say when it comes to IT security I know a fair bit. 

and Apple security crap, no better than paypal, in fact Apple security is much weaker until they got hacked recently
(not the nude picture) even the hacked before that where hacker start using other people Apple ID to buy stuff.

I never put my credit card in AppleID account I always use itune prepaid card because I know its weakness.

who would think Apple doesn't encourage or enforce 2 factor authentications until recently, I been using paypal 2 factor authentications for yonks now.

but again no system is 100% secure, the nature of the beast is that someone, somewhere, will stuffed up
and it is a race against time with hackers and system owner who ever get to exploited or closed the loop up first.

I am not anti Apple I just dont get emotionally attached to stuff like most people... I give credit where credit due ... I love Apple products, I got their Phones, iPods and their Computers.
but when it comes to payment my choice currently is paypal and credit card nothing else.

when and if Apple did something really awesome with payment I adopt what is good and benefits me.


----------



## McLovin (12 September 2014)

TikoMike said:


> If the company "prefers" then how is that forced? Not trying to start arguments but sorry that's an oxymoron if I have ever seen one..




Prefers = will only use unless absolutely necessary. Do we really need to parse sentences?

If you don't think they're a fat, lazy company then we fundamentally disagree. (and there's nothing wrong with that of course!)


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## Smurf1976 (12 September 2014)

TikoMike said:


> If the company "prefers" then how is that forced? Not trying to start arguments but sorry that's an oxymoron if I have ever seen one.



It's extremely easy to enforce and widely done.

Employee pays via credit card = no problem, the boss can see proof that it's a legit purchase and there's proof of the amount paid. Easy.

Employee pays via cash and asks for reimbursement = boss promptly points out that it's company policy to pay via credit card and as such, the employee is not entitled to have a cash purchase reimbursed unless they can demonstrate why paying by card was not possible. This will be the first and last time the employee pays cash in a situation where paying by card was possible.

I can't recall having any job where cash was an accepted means of payment for anything other than truly unavoidable situations (eg parking meters). Everything else has always been accounts, purchase orders or credit cards. Never cash.


----------



## galumay (12 September 2014)

I have done a bit more research of the Apple iWallet pay system and I actually dont think it will have any negative impact on CAB. Merchants will be able to use existing electronic pay hardware, eg eftpos machine, its just a matter of adding code for it to function with Apple iWallet. The impact I see for all business is less cash customers, and that impact will be greater in the US where the take up of non cash payment has been a lot slower than in Australia.

It looks like the big breakthough will be ease of use - better than existing platforms for electronic payment, and security which is the real advance in the Apple system. Should lead to the removal of the $100 limit without PIN for iPhones using iWallet so basically instant, unlimited payments (up to credit limit).


----------



## TikoMike (13 September 2014)

Smurf1976 said:


> It's extremely easy to enforce and widely done.
> 
> Employee pays via credit card = no problem, the boss can see proof that it's a legit purchase and there's proof of the amount paid. Easy.
> 
> ...




So in summary the Employer is the real customer and they PREFER to use card over cash? I don't understand your point or McLovin's, but anyway regardless I don't see this scenario being bad for CAB either before Uber came or after.


----------



## Smurf1976 (13 September 2014)

TikoMike said:


> So in summary the Employer is the real customer and they PREFER to use card over cash? I don't understand your point or McLovin's




I don't have any stats, but the corporate and government market for taxi services would be significant I'd expect. Attending business meetings, airport transfers, in some cases transport home for normally 9 to 5 employees working late on occasion. Etc. There are also various state government based travel subsidy schemes and they also necessarily involve non-cash account based payments.

In general, that part of the market won't use a taxi service that can't be paid by card, account or by vouchers and will steer well clear of anything not run by a "proper" taxi business as such. It's not about cost, it's about accountability (financial) and what happens if something goes wrong (OH&S). 

For the time being at least, this part of the market will be sticking firmly with established operators using Cabcharge facilities for payment unless a directly comparable and fully licensed alternative comes along. Maybe that will change someday, but for the moment at least CAB is a very entrenched operator there.


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## McLovin (14 September 2014)

Smurf1976 said:


> For the time being at least, this part of the market will be sticking firmly with established operators using Cabcharge facilities for payment unless a directly comparable and fully licensed alternative comes along. Maybe that will change someday, but for the moment at least CAB is a very entrenched operator there.




There's a few corporates that have switched to Uber. Seriously, once you try Uber you won't go back to fobbing about for CC. You get in and you get out. It's convenient. Of course CAB could come up with something similar but they'll have competition.


----------



## galumay (14 September 2014)

McLovin said:


> There's a few corporates that have switched to Uber.




Really? Which ones? I cant imagine any significant corporate taking that sort of risk, its way outside their comfort zone with OH&S, insurance, legality, etc.


----------



## McLovin (14 September 2014)

galumay said:


> Really? Which ones? I cant imagine any significant corporate taking that sort of risk, its way outside their comfort zone with OH&S, insurance, legality, etc.






Taxis and hire cars are insured and regulated.

EY does or was about twelve months ago.


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## ROE (14 September 2014)

There is Uber and their is UberX 

Uber is the Premium Limo type service like any other Limo service and I am sure there are users just as there are Limo user, which all the cost associated like running a hire transport service like insurance, public liability etc...

UberX is the free for all options with any man and a car and I doubt many corporate will use it 
with no regulation and insurance .. all the risk is passed on to the driver 

if the worker got injured, they aren't going to sue the driver they going after the corporate with more money 
who direct them to use this service.


----------



## galumay (14 September 2014)

ROE said:


> There is Uber and their is UberX ......




Thanks for the explanation ROE, that makes sense, I was surprised at McLovin's suggestion that some corporates user Uber because I was assuming he was referring to what in fact is the UberX service. My bad!


----------



## ROE (14 September 2014)

5% fee start killing smaller players ....blessing in disguise  

that explains the recent price jump ...so now the market isn't fearful of 5% but probably say more
5% please to all states  ...so going forward the more state roll out the better for CAB
man a disaster the market fear turn out to be a blessing that is unique 

http://www.afr.com/p/business/companies/cabcharge_rival_live_taxi_mulls_7nAeK6Rz6O58uDwHrh14gI


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## goccipgp (15 September 2014)

CAB has an ongoing P/E of 11.04, which indicates that it is undervalued. Technical buying signal at au stoxline with the short term target of 6.95.


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## galumay (15 September 2014)

goccipgp said:


> CAB has an ongoing P/E of 11.04, which indicates that it is undervalued. Technical buying signal at au stoxline with the short term target of 6.95.




Can you please stop posting this spam? P/E is NOT an accurate indictor of value and your continuing advertising of the commercial site, stoxline looks very suspicious. If you have anything of value to contribute we look forward to seeing it!


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## Joe Blow (15 September 2014)

galumay said:


> Can you please stop posting this spam? P/E is NOT an accurate indictor of value and your continuing advertising of the commercial site, stoxline looks very suspicious. If you have anything of value to contribute we look forward to seeing it!




goccipgp is now on his final warning. One more mention of that particular website and his account will be suspended. Enough is enough.

Please report it if it happens again.


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## galumay (15 September 2014)

Here is a publicly available link to the story ROE mentioned,

http://www.smh.com.au/business/cabc...er-new-taxi-payment-laws-20140912-10g1td.html


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## McLovin (1 October 2014)

Now they're going square at the corporate market. 



> Online car hire business Uber will step up its battle with taxi giant Cabcharge on Wednesday, launching an upgraded app that aims to take the hassle out of the way companies order and pay for car travel.
> 
> The Uber For Business product was launched in the US, Britain, France and Canada earlier this year, and will be available here from Wednesday.
> 
> It will let employees book all work car travel through the existing mobile app and have the bill sent directly to the *company accounting system without the need to fiddle about with paying drivers or keeping receipts.




http://www.afr.com/p/technology/uber_targets_the_business_market_plHEtAf1GmqXycSNnpS9EM


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## skc (20 October 2014)

Another day, another article on the pending demise of CabCharge.



> Race on for technology-age taxi dollars
> 
> On Friday, some of the country’s most successful entrepreneurs and rich-list families backed an equity raising of taxi booking and payments app goCatch in the race to “break apart” the country’s powerful $5.4 billion taxi industry.Some of the backers of the business include billionaire family the Kahlbetzers, the Millner family, fund manager David Paradice, Malcolm Turnbull’s son, Alex, and Square Peg, a technology venture capital firm backed by James Packer, Seek co-founder Paul Bassat and the billionaire Liberman family.
> 
> ...




http://www.afr.com/p/technology/race_on_for_technology_age_taxi_tYMqzmSzocJ13QBFgssm9H

But I think the key quote is this



> The brutal reality is that the disruptive technology carries all the hallmarks of what happened in the media industry, the music industry, the book industry and some other traditional enterprises.




I think CAB probably still has a 1-2 year window to morph and evolve and actually has a chance of emerging the winner. It will involve giving away some of its monopolistic profits and attacking the newcomers front on. (OR they could takeover GoCatch and go from there). 

Or they can join the likes of FXJ (vs REA/CRZ/SEK)... clutching onto its old bag of gold while it drowned.


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## So_Cynical (7 March 2015)

http://en.wikipedia.org/wiki/Lyft said:
			
		

> Lyft is a privately held, San Francisco–based American transportation network company. The company's mobile-phone application facilitates peer-to-peer ridesharing by connecting passengers who need a ride to drivers




This industry is in transition, 100% no doubt about it....the new guys are queuing up to kill the incumbents.

https://www.lyft.com/


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## ROE (7 March 2015)

So_Cynical said:


> This industry is in transition, 100% no doubt about it....the new guys are queuing up to kill the incumbents.
> 
> https://www.lyft.com/




Those compared CAB to Newspaper is generalizing all disrupting technology will killed off incumbent and probably misunderstood CAB business.

I am of the view CAB will eventually beat them all like FLT  with the internet, as you need more than just the Apps to kill CAB, you need much much more more  and none of the new entrance has any of it


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## ROE (7 March 2015)

skc said:


> Another day, another article on the pending demise of CabCharge.
> 
> 
> 
> ...




I agree they been predicting CAB doom day for a while they actually maintaining their profit, it only decline because of the 5% reduction and share price correct accordingly but the blessing of this is

it will WIPE out most other player and it will emerge to be a very powerful one down the road.

they should be predicting the doom day of Uber  40 Billion private companies that burn hundred of million a year, and no end in sign when they make a profit what happen when the music stop?

I stick with my conviction my average price is under $4 and dividend has been oh so good


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## So_Cynical (7 March 2015)

ROE said:


> Those compared CAB to Newspaper is generalizing all disrupting technology will killed off incumbent and probably misunderstood CAB business.
> 
> I am of the view CAB will eventually beat them all like FLT  with the internet, as you need more than just the Apps to kill CAB, you need much much more more  and none of the new entrance has any of it




So the story goes, the guys at Kodak, the guys that played a big part in developing digital saw the rise of digital as inevitable and were super conscious of the fact that Kodak had to under go massive change to survive...and they failed miserably.

FLT from memory didn't reinvent themselves, just carried on...i cannot see CAB surviving if they just carry on.


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## Smurf1976 (7 March 2015)

Kodak is best described as a case of "why CEO's are paid far more than they're worth".

Plenty of people at Kodak knew where the future lay. They were the technical types coming up with the ideas. Trouble is, they weren't the people running the company and the rest is history.

So far as taxis are concerned, I suspect that the future is going to be radically different to what we have today. My thoughts are along the lines of driverless cars, fares considerably lower than at present (due to the lack of a human driver) and a substantially increased usage of taxis in inner city areas.

Driverless cars - very much on the way. In the context of taxis, it just means a need for some system to input the required destination and pay the fare - not overly difficult given the existence of Google maps and credit / debit cards. Plus some means of monitoring that the vehicle isn't damaged - doable with an assortment of sensors and noting that the customer's ID etc is already known by virtue of the payment method. The odd one might get trashed and set on fire, but the lack of having to pay drivers, plus the greatly reduced mechanical wear due to non-human driving, would easily offset that I'd expect. 

Electric - easy if you have the taxis return to a number of central points (eg an on-street taxi rank) and just use induction to charge them at that location whilst they're waiting for the next job.  

Sometime in the future, I expect that "taxi" means a driverless electric vehicle. If you want one with a human driver, that's a "hire car" in the same context that they exist today. 

As a business, I see this future as not much different to industries (past and present) such as VHS / DVD rental, electricity / gas retailing, fast food and many more. 

There was never any fundamental reason to stop you or I setting up a single VHS (or Beta for those old enough to remember) rental store and many did that in the early days. Just like there's nothing to stop us having 1000 electricity retailers and there's nothing to stop me selling hamburgers complete with fries and a soft drink and doing so by means of an outlet with tables, take away and drive through options. 

In reality however, a few big players came to dominate the Beta / VHS / DVD rental industry, electricity retailing has become concentrated heavily into the "big 3" and a handful of smaller players, and the burger business is largely in the hands of McDonald's and Hungry Jack's. 

I see the future of taxis as much the same. Nothing fundamental to stop a one car operator but in reality a small number of big operators will absolutely dominate it. Whether or not CAB is one of them remains to be seen.


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## banco (7 March 2015)

Sooner uber/lyft drive  CAB into bankruptcy the better.


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## galumay (7 March 2015)

Smurf1976 said:


> I see the future of taxis as much the same. Nothing fundamental to stop a one car operator but in reality a small number of big operators will absolutely dominate it. Whether or not CAB is one of them remains to be seen.




History tells us it wil likely be CAB, they are the dominant player with a lot of competitive advantage. I think your vision of the driverless car is outside my lifetime, but CAB will see off the likes of uber in the medium term. They will lose some market share along the way, but traditional taxis arent going out of business any time soon.


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## So_Cynical (7 March 2015)

galumay said:


> I think your vision of the driverless car is outside my lifetime




The driverless car has been around for a few years now, google has pretty much perfected it.
~
[video=youtube_share;bDOnn0-4Nq8]http://youtu.be/bDOnn0-4Nq8[/video]
~
[video=youtube_share;Orzgw4GPA10]http://youtu.be/Orzgw4GPA10[/video]


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## Smurf1976 (8 March 2015)

So_Cynical said:


> The driverless car has been around for a few years now, google has pretty much perfected it.




There are already driverless trucks on mine sites and associated private roads and now at least one Australian state (SA) is proposing the appropriate legislation to make them legal on public roads.

I suspect that many (most?) will still prefer to manually drive their own private vehicles, but for taxis I can see a definite move to driverless at some point given the financial incentive. I can see some arguments against it too, but most of those also apply to things like self serve checkouts and having electronics in aircraft. In reality, those things have happened so I do think I'll live to see driverless cars on the road in due course, taxis being an obvious application of them so far as passenger vehicles are concerned.


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## qldfrog (8 March 2015)

Smurf1976 said:


> So far as taxis are concerned, I suspect that the future is going to be radically different to what we have today. My thoughts are along the lines of driverless cars, fares considerably lower than at present (due to the lack of a human driver) and a substantially increased usage of taxis in inner city areas.



fully with you on that one: driverless car will be here surprisely quickly IMHO and that will change the game.
competition for the companies become global and that will annihilate CAB;
the same system doing the booking, routing dispatching and pay will drive the car too.I can bet you it will not be CAB.

what is CAb except a monopoly?
no technical advantage, no more way to bribe the driver operators  thru pay back of some fees
anyway, make hay while the sun shine 
Why should really care about what is in store in 10y time for a company when a fed decision or the next election can devastate the stockmarket overall;
as you can imagine, not a great fan of value investing, at least not on a high overpriced market


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## qldfrog (8 March 2015)

Smurf1976 said:


> There are already driverless trucks on mine sites and associated private roads and now at least one Australian state (SA) is proposing the appropriate legislation to make them legal on public roads.
> 
> I suspect that many (most?) will still prefer to manually drive their own private vehicles, but for taxis I can see a definite move to driverless at some point given the financial incentive. I can see some arguments against it too, but most of those also apply to things like self serve checkouts and having electronics in aircraft. In reality, those things have happened so I do think I'll live to see driverless cars on the road in due course, taxis being an obvious application of them so far as passenger vehicles are concerned.



And taxi is one area where I would much prefer deal wioth a machine that the human we usually have as drivers.
But i do prefer manned checkout at woolies....


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## Smurf1976 (8 March 2015)

qldfrog said:


> Why should really care about what is in store in 10y time for a company when a fed decision or the next election can devastate the stockmarket overall;




If you look at the past 30 years, a key defining theme economically is that what were once monopoly or at least very dominant utility-like businesses have been deregulated and opened up to competition. That's happened in everything from banking to airlines to actual utilities such as gas and electricity. 

CAB / taxis is one of the very few businesses of that nature still around which hasn't been deregulated and opened up to competition. And yet it's one of the easiest to do - there's no physical gas pipes or power lines to worry about, no major safety concerns and high barriers to entry like with aviation, no worries about collapsing the entire economy as with banks. But government has deregulated all the rest, so the risk that taxis are deregulated at some point seems _extremely_ high to me, partly because it's one of the very few things left that hasn't already been deregulated.


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## galumay (8 March 2015)

Smurf1976 said:


> CAB / taxis is one of the very few businesses of that nature still around which hasn't been deregulated and opened up to competition.




Not sure about that, I think the Taxi industry is already deregulated in the manner that you are speaking about. There will always be a level of regulation to protect consumers, just like banking and airlines, health insuarance etc. 

BTW I am not dogmatic in my overall view, CAB do have legislative and competitive threats, but I do think the impact of changes in the industry may have been over stated by those who seem to have some sort of emotional dislike of CAB. They are still a healthy business and they are not expensive by any metric I use. 

I may well be entirely wrong about the driverless taxi too, but I will honestly be surprised to see them within 20 years, and of course a company like CAB might find a way to gain enterprise value from such a breakthrough anyway.


----------



## Wysiwyg (8 March 2015)

galumay said:


> I think your vision of the driverless car is outside my lifetime, but CAB will see off the likes of uber in the medium term.



The US has passed legislation in some states to allow this experiment. The annoyance these high caution programmed vehicles will cause human drivers is foreseeable. The anxiety a passenger would feel is foreseeable. This automation does work in a controlled environment such as a work site but the road space where free wills operate it is never going to work.


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## Smurf1976 (8 March 2015)

galumay said:


> Not sure about that, I think the Taxi industry is already deregulated in the manner that you are speaking about. There will always be a level of regulation to protect consumers, just like banking and airlines, health insuarance etc.




It might be deregulated somewhere in Australia (?), but it isn't in Vic and Tas at least.

You need a "taxi plate" to legally operate as a taxi, and government has gone as far as to actually limit the number of such licenses issued to a fixed quantity, to the extent that the license itself holds considerable value. In Victoria, they even regulate what colour the taxi vehicle is.

If taxis were deregulated, then anyone who meets the criteria and pays a modest fee (no more than $1000) could obtain a taxi license with no limit on the number issued. And there certainly wouldn't be any law about the colour of vehicles unless that law was some general traffic law applying to all vehicles on the road, not just taxis.

If I want to run a bright blue Camry as a taxi then it should be straightforward to get a "taxi plate" and that shouldn't involve needing to buy it from another operator. In a free market, governments don't regulate supply.

The current model is essentially economic regulation to ensure that taxis are profitable for those who operate them, achieved by means of artificially restricting supply. That approach has long since been done away with in other industries from airlines (the old two airline policy) to supermarkets to petrol retailing (anyone remember petrol rostering?).


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## hiddencow (8 March 2015)

Regulations have recently changed in Vic, the price is around$22k a year for a taxi license and I don't think there is any limit.


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## qldfrog (9 March 2015)

galumay said:


> I may well be entirely wrong about the driverless taxi too, but I will honestly be surprised to see them within 20 years.



can I do a bet with you Galumay: by december 2020, some will be driving in Australia;
the only risk is Australia is often 20 y behind but I believe it will not be the case for the taxi
a picture of me wearing a silly hat posted on that thread if I loose...and if I win that CAB thread might not be that active anymore!!!!so up to you to choose your own cost 
Wait and see


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## ROE (9 March 2015)

There is a more profitable way than betting 

If you think CAB is doom short the sucker  and if you think it will do well long it.

and if you just hate CAB for some reason or another then just bag it out, the market 
is a weighting machine, short term it will reacts to all sort of good news, bad news, rumour, 

prediction, doom day scenario but all will gravitate toward the weighting machine years down the road and 
the only thing that matter is cash flow and profit, and Mr market will weight it according to its cash flow
and profit.

Business heavy with those 2 artefacts will be weight on the upper scale and those light in those 2 will weight down lower scale everything else will be place under the weighting table and get throw out


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## qldfrog (9 March 2015)

ROE said:


> prediction, doom day scenario but all will gravitate toward the weighting machine years down the road and
> the only thing that matter is cash flow and profit, and Mr market will weight it according to its cash flow
> and profit.



True, as I wrote before, it is not because I believe that company will be pulverised within 10 years that you can not make money tomorrow
but please do not use any "value" argument on that bet


----------



## galumay (10 March 2015)

qldfrog said:


> can I do a bet with you Galumay: by december 2020, some will be driving in Australia;
> the only risk is Australia is often 20 y behind but I believe it will not be the case for the taxi
> a picture of me wearing a silly hat posted on that thread if I loose...and if I win that CAB thread might not be that active anymore!!!!so up to you to choose your own cost
> Wait and see




I can do a silly hat!


----------



## qldfrog (10 March 2015)

galumay said:


> I can do a silly hat!



Done deal, remind me if you win and I forget
Cheers


----------



## So_Cynical (10 March 2015)

So_Cynical said:


> This industry is in transition, 100% no doubt about it....the new guys are queuing up to kill the incumbents.
> 
> https://www.lyft.com/




And theres another one.

http://www.ztrip.com/


----------



## McLovin (25 August 2015)

The CAB result wasn't so bad. I think that the regulators sparing the radio network has worked to CAB's advantage in a big way. It's been pretty well worked over in the last few months. It's still too pricey for me to buy, but it's around fair value, or my judgement of it anyway.

I don't really  know why they still persist with the bus thing. Surely that cash is better in the hands of shareholders.


----------



## galumay (26 August 2015)

McLovin said:


> The CAB result wasn't so bad. I think that the regulators sparing the radio network has worked to CAB's advantage in a big way. It's been pretty well worked over in the last few months. It's still too pricey for me to buy, but it's around fair value, or my judgement of it anyway.
> 
> I don't really  know why they still persist with the bus thing. Surely that cash is better in the hands of shareholders.




I think the market has seriously over estimated the impact of things like Uber, the cash burn is astronomical at Uber, I know its funded by Google, but there must be some finite limit to the amount of money they are prepared to lose - and all the while CAB is continuing to make a healthy profit.


----------



## ROE (26 August 2015)

galumay said:


> I think the market has seriously over estimated the impact of things like Uber, the cash burn is astronomical at Uber, I know its funded by Google, but there must be some finite limit to the amount of money they are prepared to lose - and all the while CAB is continuing to make a healthy profit.




I reckon it is an absolutely bargain, I am back into big time recently.

I price it for the worse it it still crazy cheap, I price in earning can decline to 30-35c and it should stabilise from
there and easily match inflation grow.

Seriously Uber is convenience but if they play the same rule as Cabbie they aren't cheap, they talking about Cabbie
has the protection but Uber is the one that has the unfair advantage doing dodgy stuff.

I am all for law passing ride sharing and legislate it and make it take on some of the cost of the Cabbie, CAB can stand up and fight there easily.


----------



## ROE (26 August 2015)

McLovin said:


> I don't really  know why they still persist with the bus thing. Surely that cash is better in the hands of shareholders.




I agree, they need to spend money building a unified apps for all cabbie and make it easier to catch taxi
lot of people still catching taxi especially tourist and business so Uber may carve out a market but it wont take away all the cabbie lunch.

Also something you may know as I recently got into it, a while ago they bought MTData system
I cant find in annual report any where that they own it, what the heck happen to it?
this is a very decent stuff and there is huge value in this system.

http://www.mtdata.com.au/

"Cabcharge announces investment in MTData Dispatch System
Cabcharge will be investing in the region of $20m to purchase what we consider
the most sophisticated Taxi Dispatch system. This investment will be spread
over the financial years 2010/11/12"

CAB payment and dispatching system worth a lot more than what the current market value it, there is a rumour not long ago on AFR an American company approach CAB to buy out their payment system for $500m
CAB said no and it never made to the ASX announcement stage.

The sum of all part of CAB is easily worth more than CAB market cap, just like FXJ on its trouble day.


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## So_Cynical (26 August 2015)

galumay said:


> I think the market has seriously over estimated the impact of things like Uber.






WSJ]Uber Technologies Inc. has completed a new round of funding that values the five-year-old ride-hailing company at close to [B]$51 billion[/B][/QUOTE]

Above quote from July 31 - 2015

[url]http://www.wsj.com/articles/uber-valued-at-more-than-50-billion-1438367457[/url]

-----------------

[QUOTE=ROE said:


> Seriously Uber is convenience but if they play the same rule as Cabbie they aren't cheap, they talking about Cabbie has the protection but Uber is the one that has the unfair advantage doing dodgy stuff.




Its called disruptive technology.


----------



## sinner (26 August 2015)

So_Cynical said:


> Its called disruptive technology.




I work in the technology startup field. I have a lot of experience in this stuff, yes tooting my own horn on that.

Uber is *not* disruptive technology. There is nothing disruptive about its technology!

Uber is nothing more than a regulatory arbitrage firm (which is exactly what ROE said). Just like Airbnb and the other idiot startups that idiots call "the sharing economy". They are also corporate scum of the worst order. I'd never invest, even if I had a time machine that showed me that all Uber investors become billionaires in 1 year time.


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## skyQuake (26 August 2015)

sinner said:


> I work in the technology startup field. I have a lot of experience in this stuff, yes tooting my own horn on that.
> 
> Uber is *not* disruptive technology. There is nothing disruptive about its technology!
> 
> Uber is nothing more than a regulatory arbitrage firm (which is exactly what ROE said). Just like Airbnb and the other idiot startups that idiots call "the sharing economy". *They are also corporate scum of the worst order.* I'd never invest, even if I had a time machine that showed me that all Uber investors become billionaires in 1 year time.




Care to elaborate? 

They've steamrolled any and all opposition encountered so far.


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## So_Cynical (26 August 2015)

sinner said:


> Uber is *not* disruptive technology. There is nothing disruptive about its technology!




OK fair enough - Disruptive innovation then, Uber has and will continue to disrupt the old business model.


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## McLovin (26 August 2015)

C'mon guys

The threat to CAB is not from UberX it's from people being able to completely circumvent CAB's in taxi payment system. GoCatch/Uber/Ingogo/Lyft, they all allow users to pay for taxis without using an in-taxi payment service. It's unlikely the payment system will ever have a zero value, but you can't be so dimissive of the alternatives that currently offer something that CAB does not (which in itself shows just how poorly CAB have dealth with this competition). That's why I think not taking Fels' recommendation to remove compulsory membership of a radio network has done CAB a HUGE favour; it's given them a $100m/year revenue buffer.

Forget UberX, the real money is in how people pay for their taxi. AFAIK, goCatch is the most popular taxi app in Australia.


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## sinner (26 August 2015)

skyQuake said:


> Care to elaborate?
> 
> They've steamrolled any and all opposition encountered so far.




I am not sure exactly how to elaborate on the "not" but speaking as someone who has lived and breathed technology, who is employed by exactly those kind of startups to deploy, maintain and operate the large scale distributed systems which make up their infrastructure: I can emphatically state that nothing they are doing in the technology space is disruptive or even remotely innovative.

On being corporate scum, you can read any of the accounts of people who were Uber drivers or pretty much any journalism on Uber at all. The bullcrud that Uber spouts about their drivers, how much they make, how their jobs are, etc doesn't even stand up to the vaguest of scrutiny. In fact, I would advise doing that, to really see what this "sharing economy" is all about (hint: it's just plain old regulatory arbitrage dressed up in Silicon Valley robes).

Looks like the drivers are starting to revolt though: http://www.wired.com/2015/08/uber-class-action-lawsuit/

In neither case does steamrolling opposition constitute evidence to the contrary. Consumers are flocking to the service now, specifically because the business model has been tuned to do exactly that. They are happy to get you trapped into the service (because where will you go after the competition is dead) before worrying about asking you to pay what it really costs (hint: the delta is almost entirely in regulatory compliance).This is exactly the kind of Silicon Valley business model that geeks like Richard Stallman have been railing against for 30+y and people are only just starting to wake up to now.

My 2c: here is what happens in society:

* Some dude drove around for money
* After a time he was making big bucks doing this so others joined in
* After a time, some people doing this cut corners to make more bucks
* After a time, cut corners caused issues and consumers demanded something be done
* After a time, the government passes regulations to stop the cut corners
* After a time, the government regulations increase and begin to become a barrier to market entry

Normally this is approximately where the story ends. But today we have a new thing:

* After a time, some people show up claiming to be disrupting the old regulated business model but actually they are just bypassing regulations and (in aggregate) charging for the privilege.

"Free market" proponents might say "but that's good! regulations r bad herr derr" but actually what was bad was just the onerous regulations which decrease healthy competition. The correct thing is to roll back a portion of the regulations, the most onerous portion which makes the least sense.

Not to burn the whole thing to the ground and hand over control to a bunch of idiots like Uber or Airbnb.

ROE said it already in much fewer words:


> Seriously Uber is convenience but if they play the same rule as Cabbie they aren't cheap, they talking about Cabbie
> has the protection but Uber is the one that has the unfair advantage doing dodgy stuff.






> OK fair enough - Disruptive innovation then,




As we say on the internet: forgive my lulz.

Australians, next time you're on Uber, ask yourself (or the driver):
* Is this human making minimum wage?
* Is this human protected from working crazy hours?
* Is this human forced to act with my safety and interest in mind, as the consumer?
* Is my fare going back into the Australian economy to pay for Medicare and Education, or is it going to Silicon Valley to repay Venture Capitalists?
and so on...


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## Klogg (26 August 2015)

sinner said:


> In neither case does steamrolling opposition constitute evidence to the contrary. Consumers are flocking to the service now, specifically because the business model has been tuned to do exactly that. They are happy to get you trapped into the service (because where will you go after the competition is dead) before worrying about asking you to pay what it really costs (*hint: the delta is almost entirely in regulatory compliance*).This is exactly the kind of Silicon Valley business model that geeks like Richard Stallman have been railing against for 30+y and people are only just starting to wake up to now.




I agree with the most part of your post - but I don't fully agree with the bold section in the quote above.

I believe that CAB pay a commission to the taxi 'group' (I don't know the official term) to keep them using the CAB POS terminals. Now that the 10% has been reduced to 5%, I'm almost certain it has been reduced, but there's still some fat to be cut there.

If you add to that the cost of taxi licenses (which did not reflect the cost of regulation) it again introduced extra fat into the system. If they cut this right back, then yes, it's purely regulatory arbitrage.

Of course, you did say 'almost', and you certainly know more than me on the issue, so I won't argue anymore


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## sinner (26 August 2015)

Klogg said:


> Of course, you did say 'almost', and you certainly know more than me on the issue, so I won't argue anymore




For full disclosure, I don't hold CAB and have not looked at their books very closely. I'm not an expert business analyst (especially compared to other posters in this thread) and I know nothing about the cab business specifically, except as a frequent customer when I'm working.

All I know is the inside of the technology industry, especially startup stuff over the last 3y. If the path we are on now is "sustainable" and the likes of Uber is the next Google or Amazon in 10y from now then lord help us.

Current Uber valuation: $50bn
Current Amazon valuation: $209bn (Amazon Web Services literally changed the entire game)
Current Netflix valuation: $39bn (and guess what Netflix is hella innovative and disruptive! their work with microservices and stuff like ChaosMonkey is true gold)
Current IBM valuation: $137bn
Current HPQ valuation: $46.5bn


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## McLovin (26 August 2015)

Klogg said:


> I agree with the most part of your post - but I don't fully agree with the bold section in the quote above.
> 
> I believe that CAB pay a commission to the taxi 'group' (I don't know the official term) to keep them using the CAB POS terminals. Now that the 10% has been reduced to 5%, I'm almost certain it has been reduced, but there's still some fat to be cut there.
> 
> ...




Sinner is talking about UberX. Unless i'm mistaken.


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## skc (26 August 2015)

McLovin said:


> C'mon guys
> 
> The threat to CAB is not from UberX it's from people being able to completely circumvent CAB's in taxi payment system. GoCatch/Uber/Ingogo/Lyft, they all allow users to pay for taxis without using an in-taxi payment service. It's unlikely the payment system will ever have a zero value, but you can't be so dimissive of the alternatives that currently offer something that CAB does not (which in itself shows just how poorly CAB have dealth with this competition). That's why I think not taking Fels' recommendation to remove compulsory membership of a radio network has done CAB a HUGE favour; it's given them a $100m/year revenue buffer.
> 
> Forget UberX, the real money is in how people pay for their taxi. AFAIK, goCatch is the most popular taxi app in Australia.




I agree. I think CAB is a dying company and priced accordingly.

It's business is about facilitating payment and communication in a taxi. These can now be done with an app on a mobile phone, which every driver and passenger have.

The government should regulate the taxi industry... in terms of driver background checking, training, car safety standards etc. Licensing... I guess is still needed as a result of these, while licensing quota is really not required imo. But the government shouldn't have to regulate which payment system to use, or which communication system a taxi needs. 

If we were to start from scratch a taxi system now, you really don't need any of those crap machines sitting in a cab these days. 

CAB will probably still make money for some years... but it's been taking way too big a clip on services that have simple substitutes now.


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## Klogg (26 August 2015)

> Current Uber valuation: $50bn
> Current Amazon valuation: $209bn (Amazon Web Services literally changed the entire game)
> Current Netflix valuation: $39bn (and guess what Netflix is hella innovative and disruptive! their work with microservices and stuff like ChaosMonkey is true gold)
> Current IBM valuation: $137bn
> Current HPQ valuation: $46.5bn




I agree with the companies you've called out here - but the only problem with this is that disruptive does not mean profitable, so company valuations probably isn't a valid comparison. In fact, as great as AWS is, it's not very profitable at all... (I predominantly use VMWare ESXi [and the related VMWare software] but I'm well aware of the concepts). 

I'm going off on a tangent here, but I do wonder what Uber's competitive advantage is. What's stopping another company hooking up an app to Paypal (the ownership of Paypal aside) and doing the same thing? There's minimal switching costs (even for drivers), and a little marketing will make people feel comfortable with using a different provider. Just thinking out aloud...




skc said:


> CAB will probably still make money for some years... but it's been taking way too big a clip on services that have simple substitutes now.




Agreed. Which also makes me curious when companies like SmartPay are trying to beat CAB at this game... Why would you bother? (and Ivan Hammerschlag is no idiot)


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## ROE (26 August 2015)

McLovin said:


> Forget UberX, the real money is in how people pay for their taxi. AFAIK, goCatch is the most popular taxi app in Australia.




True but none of them has taxi companies and that is where it hard for these guys to break in, CAB owns a lot of taxi companies and they continue to use CAB payment system by default.

also it cost Taxi driver nothing having CAB terminal and it cost Taxi driver nothing processing it, what CAB throw on top has no effect on driver earnings, so the incentive for Cab drivers to have CAB terminal is a no brainer  as you can see they growing in number each year any new taxi put out ...free CAB charge terminal, I think CAB do pay commission to large taxi companies using their payment system so the incentive for using CAB stuff is fairly straight forward, more will sign up not less

These terminal is not ancient dinosaur, they just look old but they are the state of the art stuff
and provide services just like the apps or better...

most taxi can not afford not to have CAB terminal as you can get to places where there is no data or your phone doesn't work.

eventually a market will carve out for each player, some will disappear, other survive and some get bigger  and I think CAB will be one of the surviving one.

all the other players can play but out of all the player I think CAB has the upper hand because of its infrastructure.

Before the apps there are a few already trying to break into CAB market but it not easy due to its infrastructure control and all of them failed to make any impact .. time will tell if the apps onslaught has a different path.


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## So_Cynical (27 August 2015)

sinner said:


> As we say on the internet: forgive my lulz.
> 
> Australians, next time you're on Uber, ask yourself (or the driver):
> * Is this human making minimum wage?
> ...




OK im not saying its a good thing, just stating that the old business model is broken - disrupted, changed forever...and yeah its a race to the bottom.

Note that taxi driving was never a popular, sort after avenue of employment...its a **** job, always has been and will continue to be.


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## PinguPingu (7 September 2015)

Timely article? 

http://www.theage.com.au/business/m...ess-ripped-away-from-you-20150906-gjgibi.html


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## galumay (7 September 2015)

PinguPingu said:


> Timely article?
> 
> http://www.theage.com.au/business/m...ess-ripped-away-from-you-20150906-gjgibi.html




I guess it depends whether you concur with the view of Uber as a disrupter, as pointed out in this thread its not really a disruptive technology or company.

Its a massive multi national flexing its weight in the marketplace, prepared to run up almost inconcievable losses for an outcome that is not actually all that clear and obvious.

Time will tell how all of that plays out. Of more interest to me is whether CAB can adapt to the challenges provided by the legislative changes that have impacted them and whether they can continue to develop and grow their payments systems - and there are signs that they can.


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## McLovin (12 October 2015)

ACCC has released draft ruling denying iHail authorisation to launch. The gist of the reasoning is that other players in this space are having to recruit taxis to their app but ihail would, because of who owns it, enter the market as the dominant app, not through competition. 

It seems like the ACCC is taking the view that this new app is really just an extension of CAB's in-car payment system and will lead to the same competition outcomes.


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## galumay (12 October 2015)

McLovin said:


> ACCC has released draft ruling denying iHail authorisation to launch. The gist of the reasoning is that other players in this space are having to recruit taxis to their app but ihail would, because of who owns it, enter the market as the dominant app, not through competition.
> 
> It seems like the ACCC is taking the view that this new app is really just an extension of CAB's in-car payment system and will lead to the same competition outcomes.




Its an interesting restriction on technology by the ACCC, no wonder UBER are happy with the interim ruling! 

Still the ACCC have already shown they have very little idea of technology and the impacts of decisions it makes - the NBN, POI decision being the most obvious.


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## McLovin (24 October 2015)

Worth a read...

http://aswathdamodaran.blogspot.com.au/2015/10/the-ride-sharing-business-playing-pundit.html


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## Rainman (24 October 2015)

McLovin said:


> Worth a read...
> 
> http://aswathdamodaran.blogspot.com.au/2015/10/the-ride-sharing-business-playing-pundit.html




Good point by Damodaran.  He's effectively saying that the ride-sharing services lack the key structural element that has traditionally elevated a dominant player in a technology-based industry and allowed that player to remain dominant: a genuine network effect.   

There is no enduring competitive advantage (as opposed to a first-mover advantage which is what Uber has and which is neither enduring nor competitive nor an advantage) in ride-sharing services.  There is nothing in the industry that will ever protect the dominant player from having their market-share constantly eroded or under threat of erosion.  

In the end, each ride-sharing service will only ever be able to compete on price: the price the service pays its drivers and the price it makes its users pay.


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## Rainman (28 October 2015)

Is anyone else in this stock?   At $2.85, it is starting to look attractive even after factoring in a full year of the cap on credit card surcharges.  

Does anyone know what proportion of these charges have typically made up total revenue?  I've skimmed through the annual report but I can't find a breakdown of it.


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## Wysiwyg (28 October 2015)

Rainman said:


> Is anyone else in this stock?   At $2.85, it is starting to look attractive even after factoring in a full year of the cap on credit card surcharges.



I fear the UBER shadow most. CAB looks due for a swing up in this long persistent down trend.


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## Rainman (28 October 2015)

Wysiwyg said:


> I fear the UBER shadow most. CAB looks due for a swing up in this long persistent down trend.




I personally think that the Uber threat is way overblown.   Sure, Uber and other ride-sharing service companies will cut into some of CAB's market share.  But people are assuming that because individual ride-sharing service companies are disrupting traditional taxi services, that fact says something about the economics of individual ride-sharing service companies as businesses.  It does not say anything about the economics of ride-sharing service companies as businesses.  

In fact, the more I learn about the economics of ride-sharing service companies, the more I am beginning to suspect that they will never be the super-profitable, capital-light, high-return-on-capital businesses that people forecast them to be.  Rather, their economics are more likely to resemble the economics of airlines than the economics of REA or of Microsoft.


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## galumay (28 October 2015)

Rainman said:


> I personally think that the Uber threat is way overblown.




I agree with the gist of your post, Uber arent even really a "disrutper", they are hugely unprofitable company, who treat their 'employees' like slave labour. Uber are back already looking to investors for more billions to keep the company afloat. 

Taxis will be round for a long time yet and there is still plenty of money to be made by the CABs of the world. 

I am not convinced the ride sharing business is viable in the long term, it may well go the way of a lot of other tech companies, the recent Damodaran article that was linked was an interesting insight.

I am not sure what the real value of CAB is going to end up, probably need to see all states & territories cut the CC fee to 5% and then see what the bottom line looks like, so far the impact has been much less than the drop in share price would suggest and they may well prove to be very cheap. 

I still hold and happy to collect the healthy yield everytime the divvy bus drives past! Its still 7% based on my purchase price.


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## craft (28 October 2015)

galumay said:


> I agree with the gist of your post, Uber arent even really a "disrutper", they are hugely unprofitable company, who treat their 'employees' like slave labour. Uber are back already looking to investors for more billions to keep the company afloat.
> 
> Taxis will be round for a long time yet and there is still plenty of money to be made by the CABs of the world.
> 
> ...




Return on those dam buses is why I'm no longer interested in CAB. The ride share threat the credit card caps - all known and probably even priced in *IF* they milked the declining business and returned the cash to shareholders, but not if they keep investing in low return buses to try and diversify.


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## Rainman (28 October 2015)

galumay said:


> ... I am not sure what the real value of CAB is going to end up, probably need to see all states & territories cut the CC fee to 5% and then see what the bottom line looks like, so far the impact has been much less than the drop in share price would suggest and they may well prove to be very cheap.




This is why I would like to know just what proportion of CAB's revenues is made up of the 10% surcharge.  

If you reduce that portion of CAB's revenue by 5%, make the necessary adjustments to operating margins and NPAT, you should end up with a reasonably good idea of what this regulatory change will mean for CAB going forward.  After that, you might make some further assumptions about any reduced revenue resulting from the inroads made by the ride-sharing service companies into the traditional taxi market.  But, in my view, any reduction of revenue under that heading should be modest because I don't think the ride-sharing service companies are going to have that much of an impact.  

I have already taken a small position in CAB at the $2.85 level.  But I will build on it once I've gone through CAB's full report more thoroughly and am able to address the question above with a bit more confidence.  

Some of the most profitable opportunities arise when you can gauge the extent to which some widely held fad - like ride-sharing service companies decimating the traditional taxi industry - depresses a stock price and delivers you a juicy mispricing that becomes blindingly apparent after just a little digging.


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## McLovin (29 October 2015)

Rainman said:


> In fact, the more I learn about the economics of ride-sharing service companies, the more I am beginning to suspect that they will never be the super-profitable, capital-light, high-return-on-capital businesses that people forecast them to be.  Rather, their economics are more likely to resemble the economics of airlines than the economics of REA or of Microsoft.




That may be true, although not my own personal view, but that hardly bodes well for CAB's payment system.



			
				craft said:
			
		

> Return on those dam buses is why I'm no longer interested in CAB. The ride share threat the credit card caps - all known and probably even priced in IF they milked the declining business and returned the cash to shareholders, but not if they keep investing in low return buses to try and diversify




I give the bus thing 12 months, as in they will get rid of it. It starts to get interesting under a scenario of them selling their bus investment. Public transport companies seem to trade on abot 15-23x earnings. Comfortdelgro is on 22x itself. At that price, CAB's share in the JV is worth pretty much the entire value of CAB, leaving the payment and taxi service biz for free.


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## craft (29 October 2015)

McLovin said:


> I give the bus thing 12 months, as in they will get rid of it. It starts to get interesting under a scenario of them selling their bus investment. Public transport companies seem to trade on abot 15-23x earnings. Comfortdelgro is on 22x itself. At that price, CAB's share in the JV is worth pretty much the entire value of CAB, leaving the payment and taxi service biz for free.





Impairment considerations in the annual report for CDC is based on nil growth for the next five years and a terminal growth rate of 2.5%. They dropped their discount from 8.9% to 8.4% and by my math if they hadn't done that they would have had to take a right down on the balance sheet value. 22x Is not something I would ever dream of paying for those sorts of numbers - but who knows maybe I'm missing something. If they did flog it off for 22x and return the cash to shareholders it would make a decent asset play with the upside of the ongoing business not turning out as bad as the popular Armageddon scenario. Still whilst interesting its not my sort of thing anymore, getting fussy/lazy in my old age.


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## McLovin (29 October 2015)

craft said:


> Impairment considerations in the annual report for CDC is based on nil growth for the next five years and a terminal growth rate of 2.5%. They dropped their discount from 8.9% to 8.4% and by my math if they hadn't done that they would have had to take a right down on the balance sheet value. 22x Is not something I would ever dream of paying for those sorts of numbers - but who knows maybe I'm missing something. If they did flog it off for 22x and return the cash to shareholders it would make a decent asset play with the upside of the ongoing business not turning out as bad as the popular Armageddon scenario. Still whilst interesting its not my sort of thing anymore, getting fussy/lazy in my old age.




Sorry, that was more me thinking aloud than suggesting they'll get 22x, although if they found a sucker to pony up that it would be bonanza! But, toward the lower end of that pe range I wouldn't put as totally left field. I really don't see CAB holding the bus JV for long, wouldn't surprise if they're already sounding out options (I have no confirmation that they are, just speculation). Reading the FY prezzo it was like CdC didn't even exist. Dare I say that perhaps the SP is being supported because of the sum of parts valuation?


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## Rainman (29 October 2015)

McLovin said:


> That may be true, although not my own personal view, but that hardly bodes well for CAB's payment system.




If you think that Uber and the other ride-sharing service companies are seriously going to shrink the market for CAB's payment system, don't you first need to satisfy yourself that Uber and these other ride-sharing service companies have a profitable business model?  

At some point, the investors that are funding these massive money-losers are going to demand to see a return.  I have not seen any evidence yet that ride-sharing service companies are capable of making any return, let alone a cost-of-capital return, on investors' funds.


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## craft (29 October 2015)

Rainman said:


> If you think that Uber and the other ride-sharing service companies are seriously going to shrink the market for CAB's payment system, don't you first need to satisfy yourself that Uber and these other ride-sharing service companies have a profitable business model? .




No! somebody that believes its a land grab in a new paradigm can be much more damaging to an incumbent then somebody interested in an immediate profitable business model.




Rainman said:


> *At some point*, the investors that are funding these massive money-losers are going to demand to see a return.  I have not seen any evidence yet that ride-sharing service companies are capable of making any return, let alone a cost-of-capital return, on investors' funds.



  At some point - maybe that point is after the incumbents are displaced.


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## Rainman (29 October 2015)

craft said:


> No! somebody that believes its a land grab in a new paradigm can be much more damaging to an incumbent then somebody interested in an immediate profitable business model.




Land grab:  pretty analogy.  Now care to back that up with any real world examples?


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## McLovin (29 October 2015)

Rainman said:


> Land grab:  pretty analogy.  Now care to back that up with any real world examples?




Amazon.


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## Rainman (29 October 2015)

McLovin said:


> Amazon.




Amazon?  Amazon is profitable.  And as far as I am aware HVN, JBH and any other number of retailers are unaffected.  Amazon has affected book retailers but that's it.  Despite a lingering fear that Amazon is going to shake up retailing as we know it, which retailers has it really driven out of business apart from book retailers?


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## McLovin (29 October 2015)

Rainman said:


> Amazon?  Amazon is profitable.




Err yeah. It's a 21 year old company. It took 10 years for it to turn a profit while it ate away at the incumbents' businesses.


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## Rainman (29 October 2015)

McLovin said:


> Err yeah. It's a 21 year old company. It took 10 years for it to turn a profit while it ate away at the incumbents' businesses.




By "_incumbents' business_", you mean bookstores?

One of the reasons why the Amazon/Uber analogy is not very compelling is that all Amazon had to do was to steal bookstore customers away from bookstores whereas Uber and the other ride-sharing service companies are going to have steal passengers way from taxis as well was taxi drivers.  There are many reasons why the latter in particular is going to be a herculean task - practically and legally - and one that is always going to be shifting one way, then another.  

I predict that the bargaining power in that equation will lie with the taxi drivers, not with the ride-sharing service companies.


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## craft (29 October 2015)

Rainman said:


> By "_incumbents' business_", you mean bookstores?
> 
> One of the reasons why the Amazon/Uber analogy is not very compelling is that all Amazon had to do was to steal bookstore customers away from bookstores whereas Uber and the other ride-sharing service companies are going to have steal passengers way from taxis as well was taxi drivers.  There are many reasons why the latter in particular is going to be a herculean task - practically and legally - and one that is always going to be shifting one way, then another.
> 
> I predict that the bargaining power in that equation will lie with the taxi drivers, not with the ride-sharing service companies.




The similarities of the Amazon analogy is that there is plenty of financial backing for the revenue build of the new model without the need for near term profit. Its tough when your competitor doesn't need to focus on near term profits - It doesn't matter if their business plan will ultimately be successful or not - what matter is if you can survive a prolonged period of fierce and potentially profitless completion for all players.

CAB and Aus is rather insignificant in the bigger picture that will eventually prevail in this customer empowerment via the internet/regulation snubbing/share economy/micro business thing that is playing out globally in many fields. I don't know how it will finish up for CAB perhaps it comes out O.K. But I can see by the weight of money backing the other story that the fight is going to be bloody enough that I don't want my money involved (either side).  

You seem to like Damodaran.

http://aswathdamodaran.blogspot.com.au/2014/10/if-you-build-it-revenues-they-profits.html


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## Rainman (30 October 2015)

craft said:


> The similarities of the Amazon analogy is that there is plenty of financial backing for the revenue build of the new model without the need for near term profit.




I don't deny that.  But that was not the point of the Amazon analogy.  The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.   

But the reality is that Amazon has impacted only brick-and-mortar bookstores.   Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.


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## skc (30 October 2015)

Rainman said:


> I don't deny that.  But that was not the point of the Amazon analogy.  The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.
> 
> But the reality is that Amazon has impacted only brick-and-mortar bookstores.   Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.




I think there are 2 different points.

1. Does Uber need a profitable business model to compete with CAB's business? You seemed to use that as argument against the case. But the Amazon analogy showed that there are always a bunch of fools with their fantasy valuation models willing to fund the bleeding contest, so a profitable business model (short term or long term) is not a pre-requisite.

2. Will Uber successfully inflict damage on the incumbent? This is where the Amazon analogy isn't perfect...although it has taken sales away from incumbents that would otherwise have been there, and probably brought down margin in those specific categories that it sells. But these damages are hard to measure and involved what-ifs. Perhaps Xero would be a better example. Having said all this.... judging by how upset the Cabbies are, I am guessing Uber isn't exactly enhancing their business. 

http://www.abc.net.au/news/2015-09-10/taxi-drivers-protest-outside-nsw-parliament-over-uber/6764398



Rainman said:


> If you think that Uber and the other ride-sharing service companies are seriously going to shrink the market for CAB's payment system, don't you first need to satisfy yourself that Uber and these other ride-sharing service companies have a profitable business model?
> 
> At some point, the investors that are funding these massive money-losers are going to demand to see a return.  I have not seen any evidence yet that ride-sharing service companies are capable of making any return, let alone a cost-of-capital return, on investors' funds.


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## Rainman (30 October 2015)

skc said:


> I think there are 2 different points.
> 
> 1. Does Uber need a profitable business model to compete with CAB's business? You seemed to use that as argument against the case. But the Amazon analogy showed that there are always a bunch of fools with their fantasy valuation models willing to fund the bleeding contest, so a profitable business model (short term or long term) is not a pre-requisite.
> 
> ...




Governments the world over will sooner or later take steps to regulate share-riding service companies and their contract drivers.  I can guarantee that.  What that regulation will look like is hard to say.  How the cost of that regulation will be shared between the drivers and the share-riding company is even harder to say.  For those reasons, I'd be very reluctant to forecast ride-sharing service companies as offering a sizeable and sustainable threat to CAB - and I say this as someone who uses Sydney cabs regularly and would prefer an Uber car any day if it was as convenient.


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## McLovin (30 October 2015)

Rainman said:


> I don't deny that.  But that was not the point of the Amazon analogy.  The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.




So between 1994 and 2003, while it was unprofitable, in your view Amazon did not wreck the traditional book business? 
Was Amazon not at least partly responsible for Circuit City closing or for the trouble Radioshack has been in? 

What explains the stagnation in Best Buy's revenue while Amazon chased them down and breezed past them? 





That graph is the high water mark for BB, revenue has now fallen ~20%. On the other hand, Amazon's revenue has doubled. Just a coincidence? Maybe. Pretty damn big one though.

You'll never get a comparison that fits like Cinderella's slipper, but this sort of conclusion seems to be viewing things the way you want to view them...



> But the reality is that Amazon has impacted only brick-and-mortar bookstores. Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.


----------



## McLovin (30 October 2015)

Rainman said:


> Governments the world over will sooner or later take steps to regulate share-riding service companies and their contract drivers.  I can guarantee that.  What that regulation will look like is hard to say.  How the cost of that regulation will be shared between the drivers and the share-riding company is even harder to say.  For those reasons, I'd be very reluctant to forecast ride-sharing service companies as offering a sizeable and sustainable threat to CAB - and I say this as someone who uses Sydney cabs regularly and would prefer an Uber car any day if it was as convenient.




Everyone seems so hung up on UberX. The threat to CAB's business remains the proliferation of app based payment systems for taxis. UberX has done a pretty good job of distracting everyone though. Given the stance of the ACCC it seems to be open season on that side of CAB's business.


----------



## Rainman (30 October 2015)

McLovin said:


> So between 1994 and 2003, while it was unprofitable, in your view Amazon did not wreck the traditional book business?




No, I didn't say the "_traditional book business_".  I said:



Rainman said:


> ... The point of the analogy was to show the damage that Amazon was supposed to have inflicted *on incumbent retailers* while it remained unprofitable.






McLovin said:


> Was Amazon not at least partly responsible for Circuit City closing or for the trouble Radioshack has been in?




I don't know.  Is it?  



McLovin said:


> That graph is the high water mark for BB, revenue has now fallen ~20%. On the other hand, Amazon's revenue has doubled. Just a coincidence? Maybe. Pretty damn big one though.




I don't know enough about Best Buy to say whether its decline in revenue is due to Amazon stealing market share from it.  Was does Best Buy sell?  I thought it was a big box electronics retailer.

But if that's the case, why has JBH not suffered a similar decline in revenue?  Is it because Amazon is not in Australia?  But there are plenty of Amazon-like on-line retailers in Australia selling exactly what JBH sells.


----------



## McLovin (30 October 2015)

Rainman said:


> No, I didn't say the "_traditional book business_".  I said:
> 
> 
> 
> ...




Fark mate. Are you a lawyer perchance?

If you don't know about Best Buy and Amazon's impact on their business then how did you reach the conclusion...



> But the reality is that Amazon has impacted only brick-and-mortar bookstores. Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.




WTF is a brick and mortar bookstore if not a traditional book business?

Anyway, I'll leave the parsing of statements to you. I made my point, you made yours, clearly we disagree.


----------



## Rainman (30 October 2015)

McLovin said:


> ... If you don't know about Best Buy and Amazon's impact on their business then how did you reach the conclusion...




Calm down, Josephine.  My remarks were intended for Australia.  I simply don't know enough about U.S. retailing to meaningfully comment on the situation there.  Maybe you do.  But the fact remains that I was and am talking only about Australia.  



McLovin said:


> WTF is a brick and mortar bookstore if not a traditional book business?




I really don't understand your point here.  To be clear, I accept that Amazon, profitable and unprofitable, has wiped out traditional bricks-and-mortar bookstores.  

But the contention that Amazon (and Amazon-like companies) have had or will have a significant impact on traditional retailing in Australia is less clear.  I have offered JBH as a case in point whose ongoing business strength I don't think can be just explained away by saying that it is due to Amazon not being here, since there are plenty of on-line retailers in Australia selling exactly what JBH and HVN sell and both businesses are doing excellently.


----------



## craft (30 October 2015)

McLovin said:


> Fark mate. Are you a lawyer perchance?




He's an excellent driver.


----------



## Smurf1976 (30 October 2015)

Rainman said:


> I have offered JBH as a case in point whose ongoing business strength I don't think can be just explained away by saying that it is due to Amazon not being here, since there are plenty of on-line retailers in Australia selling exactly what JBH and HVN sell and both businesses are doing excellently.




Books - if I know what book I want then all I need to do is purchase it. Online is far easier than going to a physical book shop. It is also reality that physical book stores, like record / CD stores, only ever carried a very small percentage of the total books / music available. If you want something that isn't absolutely mainstream then physical stores were always at a disadvantage there.

In contrast, if I'm buying furniture or a new TV then I want to see the furniture prior to purchase. Stores selling furniture won't disappear anytime soon for that reason. Some might buy a new sofa or dining table online but many will want a close look at it first and that requires a real, physical shop not just a website.

Taxis are a very different beast. It's a physical service, an actual car with a human driving it. You can't get from home to the airport online, you need a real car (or bus or train) to do that. All you can do online is the administrative side. 

A better analogy than the likes of HVN is solar power in my view. It was never illegal to generate electricity for your own use, but doing so was totally impractical and uneconomic for 99.99% of ordinary households prior to the emergence of cheap solar equipment. What solar has done is to give consumers the means to use a resource they already have, sunlight, to provide a service comparable to that which was previously only available from a utility company. As a broad concept that's similar to ride sharing - technology enabling the use of cars that already exist to provide a service that was previously only available from a licensed taxi operator.


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## Value Hunter (1 November 2015)

I think Taxi drivers will start becoming Uber drivers en masse over the next few years. I recently caught a taxi that was passing by because I was in a hurry to get somewhere. It was a short trip and I paid the guy about $12. When I was talking to him he said he was going to become an Uber driver in a few months time. 

He said he has been driving a taxi for 20 years. He said he paid $150 per day to rent the taxi for 12 hours. After paying this $150 he was netting $120 per day for driving 12 hours (and in busy areas of Sydney, not in the middle of nowhere). The reason is because although taxis still get some customers when they drive around, customers who actually phone a taxi to come and get them and mostly using Uber now, hence the volume of business for many taxi drivers is not enough to make a living. The taxi driver said the guy he rents the taxi from had 70 taxis originally but has now taken 30 of them off the road due to waning demand.


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## galumay (1 November 2015)

Value Hunter said:


> I think Taxi drivers will start becoming Uber drivers en masse over the next few years.




I doubt it, the UBER model is based on paying their drivers next to nothing, its basically slave labour. I dont think Taxi driving is paid as poorly generally as your driver implied.


----------



## Rainman (1 November 2015)

Value Hunter said:


> ... The taxi driver said the guy he rents the taxi from had 70 taxis originally but has now taken 30 of them off the road due to waning demand.




I seriously question this.  Are you sure the driver didn't say 7 instead of 70 and that he had taken 3 cabs off the road instead of 30?

There is scuttlebutt.  Then there is good old fashioned BS.  I think your taxi driver's claims are the latter.


----------



## Wysiwyg (4 November 2015)

Another stock selection lesson regarding buying in a downtrend. As I mentioned before, the lure to buy at cheap, bargain, perceived value levels is overwhelming for myself (very much less nowadays) and many others. 

p.s.  this could be the bottom :dimbulb:


----------



## Value Hunter (6 November 2015)

Rainman the cabbie struck me as an honest guy and I sensed he was telling the truth and yes he said 70, and the cab fare was $10.40 and he said just to pay him $10.00. I ended up giving him a tip and paid $12.00. Can I be absolutely sure he was not lying? No.

He  (cab driver) said that he thought he could net $250 a day in profit (for 12 hours driving) if he was an uber driver. A work colleague of mine does Uber driving on the side one day a week. He says he drives a 12-14 hour day (he is available for 12-14 hours but is obviously not drivin the whole time and is at home a fair chunk of it) and makes an average of $500-600 in revenue per day. I guess once you properly deduct petrol and depreciation and maintenance on your car you are making a similar hourly rate to an entry level job. Not great but not terrible either.


----------



## galumay (6 November 2015)

Value Hunter said:


> He says he drives a 12-14 hour day (he is available for 12-14 hours but is obviously not drivin the whole time and is at home a fair chunk of it) and makes an average of $500-600 in revenue per day. I guess once you properly deduct petrol and depreciation and maintenance on your car you are making a similar hourly rate to an entry level job. Not great but not terrible either.




mmm....thats a hell of a lot more than my understanding of what Uber drivers earn. Like more than double.


----------



## Rainman (8 November 2015)

Value Hunter said:


> A work colleague of mine does Uber driving on the side one day a week and... makes an average of $500-600 in revenue per day...




$500 day?  That is $2,500 for a 5 day week and $10,000 a month.  That is far, far in excess of what I've heard Uber drivers are making.


----------



## Triathlete (8 November 2015)

Wysiwyg said:


> Another stock selection lesson regarding buying in a downtrend. As I mentioned before, the lure to buy at cheap, bargain, perceived value levels is overwhelming for myself (very much less nowadays) and many others.
> 
> p.s.  this could be the bottom :dimbulb:




Agree with your comments .....the question has to be does the stock hold here or continue to fall or does it go sideways now for who knows how long????

Definitely one to stay away from at this point in time...

Uber has had an impact on this stock.


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## McLovin (17 December 2015)

UberX legalised in NSW. This is a big announcement I think. CAB now has to not only fight to maintain it's traditional payment's business, but now has at risk the $100m or so in taxi services revenue, especially the radio network requirement for taxis.



> Owners of taxi licence plates in NSW will receive compensation after the Baird government decided to legalise ride-sharing services such as UberX.
> 
> In a widely expected decision, the NSW cabinet has signed off on a compensation package for about 6000 people who own taxi licence plates in perpetuity, which is understood to include payments of $20,000.
> 
> Transport Minister Andrew Constance will hold a press conference on Thursday afternoon to unveil the details of the reform package following the decision to legalise UberX and other ride-sharing services, which is expected to include about $300 million a year in reduced regulatory costs.




Read more: http://www.smh.com.au/nsw/uberx-leg...ate-owners-20151217-glpt6r.html#ixzz3uXjqLVcb


----------



## Klogg (17 December 2015)

What's more is they're also under threat from SmartPay (SMP). They're growing relatively quickly in VIC - shown in their AGM presentation...


----------



## So_Cynical (17 December 2015)

So_Cynical said:


> (25th-February-2014) The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.






TikoMike said:


> (26th-February-2014) Yes you are correct. Kids not fumbling with apps will be the downfall of Cabcharge. Wish I realised this before investing my money.




What's the bet Mike comes back saying he miraculously sold out in Sept 2014 at 6 bucks  ~ CAB was $4.25 when Mike and i expressed our differing views.

---------------------------

Just watched the CAB CEO interviewed on ABC24 re the NSW Govt Uber decision today, the guy seemed to be out of his depth.
~


----------



## Smurf1976 (17 December 2015)

McLovin said:


> UberX legalised in NSW.




Once one state does something then the others usually follow, especially when the state that does it first is a big one (in terms of population).

Certainly government regulators of other industries (eg utilities) do look very heavily at what others are doing when making their decisions (a point that's very obvious if you simply read any report from any regulator of anything, they'll almost always include a table showing what the other states do and comparing with their proposal).


----------



## So_Cynical (17 December 2015)

A $1 taxi fare levy to fund the 250 million industry compo package, each plate holder to get 20K 

http://www.businessinsider.com.au/nsw-is-about-to-say-yes-to-uber-2015-12

One of my workmates drives for Uber and loves it, showed me the partner app and how it works, very impressive and so so easy.


----------



## Triathlete (18 December 2015)

I tried *UBER* for the first time last week and must say I was impressed with how easy it was to use.

The person who came had a very nice vehicle that was very well maintained and clean.

 Had a lift in 7 minutes from the time I organized it and around $20 cheaper than using a taxi, also not having to exchange money at the end of the trip was great*..."Impressed so far".*


----------



## herzy (24 May 2016)

I don't know anybody in my demographic (sub-30) who uses taxis anymore. 

I can only see any real endurable market (for the incumbents) in corporate car hire. I've spoken with a lot of drivers and they also seem happy to work for uber. 

Contrary to some of the other comments, there's no need to actually poach taxi drivers. Anyone with a licence can do it, and heaps of people do it one day a week. Dangerous times for taxis when both consumers and workers (and now regulators) are happy with uber.


----------



## galumay (24 May 2016)

Yep, nup, i am not so sure. Cabcharge's own financials show taxis are still very popular and I suspect will always have a significant place in the "cars for hire" market. Uber are a really nasty company with a model that relies on mistreating employees. Companies that treat employees in that way usually end up underperforming. 

Longer term there will likely be a mix of players in the "cars for hire" market, taxis will probably continue to be a very significant part of that market, Uber will come under competitive threat from companies that treat their employees better and there will probably be a range of companies fill this space.


----------



## So_Cynical (25 May 2016)

galumay said:


> Yep, nup, i am not so sure. Cabcharge's own financials show taxis are still very popular and I suspect will always have a significant place in the "cars for hire" market. Uber are a really nasty company with a model that relies on mistreating employees. Companies that treat employees in that way usually end up underperforming.




I work in the city (SYD) late nights, the ONLY people i see getting taxis are drunk bogans and middle aged drunks who clearly don't know Uber exists, they stand in the middle of the road waving their arms frantically at full taxis.

Morons.


----------



## VSntchr (25 May 2016)

galumay said:


> Uber are a really nasty company with a model that relies on mistreating employees. Companies that treat employees in that way usually end up underperforming.



What do they do that's so bad? A few drivers I know seem relatively satisfied with the PT job.




So_Cynical said:


> I work in the city (SYD) late nights, the ONLY people i see getting taxis are drunk bogans and middle aged drunks who clearly don't know Uber exists, they stand in the middle of the road waving their arms frantically at full taxis.
> Morons.



LOL :iagree:


----------



## Knobby22 (25 May 2016)

galumay said:


> Longer term there will likely be a mix of players in the "cars for hire" market, taxis will probably continue to be a very significant part of that market, Uber will come under competitive threat from companies that treat their employees better and there will probably be a range of companies fill this space.





Uber are run by bast-rds and are scum of the earth imo. They want to create a poorer class of worker (serf). They are taking a larger and larger percentage of the fare and are ruthless in sacking anyone who complains.

They are now into predatory lending.
http://brontecapital.blogspot.com.au/


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## herzy (26 May 2016)

All this talk of Uber being awful misses the point: 
- it's still a far better product for consumers than a taxi, so will affect CAB
- even if Uber fails, alternative will pop up (and are popping up) that are more ethical etc (still bad for CAB)
- I have spoken with a lot of Uber drivers who are more than happy (and none who are unhappy)
- I have spoken with a lot of taxi drivers who are unhappy with Uber (clearly they see competition)
- I have spoken with a lot of taxi drivers who are unhappy with CAB/being a taxi driver

Galumnay I agree with the latter part of your post. Their may well be other players - but that doesn't say anything about the success of CAB. 

My question is this: what does a taxi offer that an alternative (Uber or another) can't match or beat? I can't think of a single competitive advantage. Can easily think of many advantages of Uber.


----------



## prawn_86 (26 May 2016)

herzy said:


> My question is this: what does a taxi offer that an alternative (Uber or another) can't match or beat? I can't think of a single competitive advantage. Can easily think of many advantages of Uber.




Agreed. While i dont necessarily agree with some of Ubers pricing and tactics, if people are willing to drive for them then so be it.

From a user perspective with Uber/Lyft, unlike cabs, i have:
* Never been refused a ride
* Never felt unsafe
* Never had to explain directions in turn by turn detail
* Always had water and sometimes more provided in car
* Always had hygienic drivers

To be honest for me it is more about the convenience than the cost. I never user Uber Pool/Lyft Line as i feel that that is too cheap for the service you get.


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## McLovin (26 May 2016)

herzy said:


> My question is this: what does a taxi offer that an alternative (Uber or another) can't match or beat? I can't think of a single competitive advantage. Can easily think of many advantages of Uber.




Zero. If it's not Uber then it's GoCatch (both have a tonne of cash behind them). Over time others will enter the market. And even when I do use a taxi, it's usually through Uber or GoCatch.

I agree with herzy, I don't know anyone my age (34) who uses anything but Uber.


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## galumay (18 August 2016)

I know its a bit of confirmation bias - but hey its a very respectable source!

This confirms a lot of my thoughts about UBER, http://pages.stern.nyu.edu/~adamodar/

I do think ride sharing apps have their place, but it will always be something thats in addition to Taxis - and probaby will become integrated in the taxi business model anyway. In the long run it will be a positive for the taxi companies, the competition will mean more focus on customer satisfaction and the model of ride sharing apps will be adopted by taxis, (CAB already moving down that path.) Governments will legislate to control and ticket clip the UBERs of the world, and they will stop the employees/drivers from ripped off. The real winners in the long term are the consumers.


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## McLovin (18 August 2016)

galumay said:


> I know its a bit of confirmation bias - but hey its a very respectable source!
> 
> This confirms a lot of my thoughts about UBER, http://pages.stern.nyu.edu/~adamodar/
> 
> I do think ride sharing apps have their place, but it will always be something thats in addition to Taxis - and probaby will become integrated in the taxi business model anyway. In the long run it will be a positive for the taxi companies, the competition will mean more focus on customer satisfaction and the model of ride sharing apps will be adopted by taxis, (CAB already moving down that path.) Governments will legislate to control and ticket clip the UBERs of the world, and they will stop the employees/drivers from ripped off. The real winners in the long term are the consumers.




Interesting article, I assume you mean this one...

http://aswathdamodaran.blogspot.com.au/2016/08/the-ride-sharing-business-is-bar.html

The most interesting bit, imo, is about Google and Apple entering the market. I don't really see anything in that post that could be called a positive for CAB, and if Google or Apple were to enter you'd have to call it a decidedly negative for them. Taxis will always exist (how long will drivers though??), but CAB's strength isn't as a taxi business it's as a payments business. If they lose the big returns they get on that then CAB is a totally different business.


----------



## galumay (18 August 2016)

McLovin said:


> Interesting article, I assume you mean this one...
> 
> http://aswathdamodaran.blogspot.com.au/2016/08/the-ride-sharing-business-is-bar.html
> 
> The most interesting bit, imo, is about Google and Apple entering the market. I don't really see anything in that post that could be called a positive for CAB, and if Google or Apple were to enter you'd have to call it a decidedly negative for them. Taxis will always exist (how long will drivers though??), but CAB's strength isn't as a taxi business it's as a payments business. If they lose the big returns they get on that then CAB is a totally different business.




I think the only real 'market' there is in apps, which is why he mentions Google & Apple. All that a company like UBER offers beyond a booking and payment app is a universal business name, otherwise they are just a ticket clipper trying to dodge regulation and proper treatment of employees. (in fact they try to avoid the obligations involved in an empolyer/employee relationship completely by sham contracting.)

Once taxis implement the same sort of apps for bookings and payments, (like CAB are developing), then I think the d'disruption' will dissapate. We have already seen that capping CAB's margin on payments didnt make as much of an impact on profits as expected, partly because of the increase in volume - at the same time as they were supposedly losing business to UBER, while UBER had all the advantage of no regulation, no compliance, and very low payments to employees.

I guess my view is just that its not as binary as people claim - "Taxis are the scum of the earth, UBER are wonderous disrupters, doing community benefit work, therefore Taxi companies will all go bankrupt and UBER will start making a profit soon"

I dont see the much liklihood of driverless cars in my lifetime, certainly not in any meaningful and widespread sense.


----------



## McLovin (18 August 2016)

galumay said:


> I think the only real 'market' there is in apps, which is why he mentions Google & Apple. All that a company like UBER offers beyond a booking and payment app is a universal business name, otherwise they are just a ticket clipper trying to dodge regulation and proper treatment of employees. (in fact they try to avoid the obligations involved in an empolyer/employee relationship completely by sham contracting.)




CAB's business is largely just ticket clipping as well. The dominance in payments stemmed from CAB's radio network. The radio network still exists, but the advent of the smartphone has short circuited the need for in-car payment terminals to make a non-cash payment.



galumay said:


> Once taxis implement the same sort of apps for bookings and payments, (like CAB are developing), then I think the d'disruption' will dissapate. We have already seen that capping CAB's margin on payments didnt make as much of an impact on profits as expected, partly because of the increase in volume - at the same time as they were supposedly losing business to UBER, while UBER had all the advantage of no regulation, no compliance, and very low payments to employees.




At the last half they reported a 28% fall in taxi payment revenue on pcp. Unless I'm missing something, there was no increase in volume, fares processed was basically unchanged. So CAB treaded water even as it dropped the cost of its service by almost  a third.

I don't think this is a story that reaches its conclusion in 12 or 24 months, it will take 7-10 years.


----------



## Ves (18 August 2016)

McLovin said:


> At the last half they reported a 28% fall in taxi payment revenue on pcp. Unless I'm missing something, there was no increase in volume, fares processed was basically unchanged. So CAB treaded water even as it dropped the cost of its service by almost  a third.



Effective rate was 5.5%  (according to the graph in the presentation)  but WA didn't change the cap until half way through the period.

So for the 2H result (and going forward) it'll be closer to 5% (but slightly higher because SA/NT etc.  haven't changed the law yet from memory?).  QLD looks like the law has passed now.  But won't show in the P&L until it's introduced. Probably 2017FY.

Based on the total taxi fares revenue of $568m (for the half) for every 0.1% the average "ticket clip" drops they lose $0.568m in EBIT.  If the effective service fee reduces by 0.5% over the long term (no doubt it will) there is an annualised EBIT impact of $5.68m.

Segment result from Taxi Services restated in such a manner for the 1H16 would be $19.30m vs $22.143m reported.

The Dec 2014 HY was $36.306.   That's almost a 50% drop.   I wouldn't call that holding up at all.  That's a disaster.

And all this is before you even bother considering competition.

There's no reason why this should be trading at such a premium to book value IMO.

edit:  I also note they increased Network Operations revenue by a few million.  Not sure if those are just fee hikes or they made an acquisition.  Without those increases the EBIT looks even worse.


----------



## McLovin (18 August 2016)

Ves said:


> edit:  I also note they increased Network Operations revenue by a few million.  Not sure if those are just fee hikes or they made an acquisition.  Without those increases the EBIT looks even worse.




Combination of both? They added 88 cars to their fleet. I seem to vaguely recall radio network subscription charges were in the order of $550/month. A modest network fee increase plus the addition of 88 new taxis would explain away the extra $1.8m in network revenue. Although network subscription doesn't really divide into number of taxis in the fleet and give a number close to $550, so I might be totally wrong, or different states/cities have different network fees.

And I agree with everything else in your post.

ETA: CAB's announcement re Qld caps is that it will cost them $10.7m in service income. Some of this of course may be recouped in higher usage of the system.


----------



## Ves (18 August 2016)

McLovin said:


> Some of this of course may be recouped in higher usage of the system.



I still don't really buy this part of the company's rationale.

This business is all about scale (it's pretty obvious the operational leverage is massive).  If lower the processing fees resulted in more usage of taxi services they would have explored this by charging less than the 10% cap years ago and found the "sweet spot."


----------



## McLovin (18 August 2016)

Ves said:


> I still don't really buy this part of the company's rationale.
> 
> This business is all about scale (it's pretty obvious the operational leverage is massive).  If lower the processing fees resulted in more usage of taxi services they would have explored this by charging less than the 10% cap years ago and found the "sweet spot."




I don't buy that it will offset the decline (halving the fee means you'd have to double the fares processed to stay still), but it is reasonable, imo, to assume that it will have some positive "kick". It has in Victoria and NSW. Although the kick has been much less in NSW than it was in Victoria. It will be interesting to see what happens in Qld.


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## galumay (18 August 2016)

This years AR will give a pretty good insight into the real impact of the changes in the industry, its been long enough in Vic and NSW to see pretty well full flow through, still need to extrapolate numbers for the effect of Qld.

Every time I read through all the negative posts about CAB I get nervous, then I go back and look at my analysis and they still look good value to me! I am going to run the rule over them very carefully this year and make a decision whether to stay invested or find another home for the capital!


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## Knobby22 (18 August 2016)

galumay said:


> This years AR will give a pretty good insight into the real impact of the changes in the industry, its been long enough in Vic and NSW to see pretty well full flow through, still need to extrapolate numbers for the effect of Qld.
> 
> Every time I read through all the negative posts about CAB I get nervous, then I go back and look at my analysis and they still look good value to me! I am going to run the rule over them very carefully this year and make a decision whether to stay invested or find another home for the capital!




Cab is on a long term down trend. Look at 5 year graph. There are better choices.


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## ROE (19 August 2016)

I still have them on and off, bit of trading in and out and  a bit of hold for dividend.

probably not the best stock I have but overall it not too bad with the current strategy.

Unfortunately, cheap money is still here so the competitor still has access to funding  running at a loss.

Last report gocatch is in trouble and required further funding else they won't last past next FY.

Uber cash burn rate still high and their revenue is no longer growing and their valuation now comes off a bit.

They have been beaten in China as investors are nervous about the 
 amount of money they burned. The model still unprofitable and investors now asking the hard question, when will they turn a profit now that they have done with growing the market and revenue.

That my little up with what is happening, good luck to whatever you decide to do


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## galumay (29 August 2016)

Knobby22 said:


> Cab is on a long term down trend. Look at 5 year graph. There are better choices.




I have no interest in historical price movements, or graphs of same. It doesn't inform me as an investor.

None the less, there may be better choices! 

On the other hand, it may be better to stay invested in CAB. 

Its possible to find arguments for each alternative.


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## Knobby22 (29 August 2016)

galumay said:


> I have no interest in historical price movements, or graphs of same. It doesn't inform me as an investor.
> 
> None the less, there may be better choices!
> 
> ...




I invest also and I can't see your argument for staying in.  How is Cab going to stay relevant in this Uber future. Where is the growth? There is certainly a higher level of risk.
i think long term trends (and by long term at least 2 years) are important to investors. Maybe an assumption is wrong.  Compare CAB with CCP of which I own quite a few. You can see where the growth is coming from and the long term chart confirms it.


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## So_Cynical (30 August 2016)

galumay said:


> I have no interest in historical price movements, or graphs of same. It doesn't inform me as an investor.
> 
> None the less, there may be better choices!
> 
> ...




The industry has been disrupted, Kodak went under even though they invented digital photography FFS, CAB has to reinvent its self completely to come out on top, thats a 10000 to 1 shot at best.

Incumbents hang on and change slowly, reluctantly...old dogs can learn new tricks but mostly they dont...do you want your money in a new dog or an old dog?


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## Klogg (30 August 2016)

So_Cynical said:


> do you want your money in a new dog or an old dog?




Given Uber's valuation and the amount of cash they're bleeding, the old dog is likely the better investment.


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## poverty (30 August 2016)

Klogg said:


> Given Uber's valuation and the amount of cash they're bleeding, the old dog is likely the better investment.




Uber doesn't need to make money in order to make CAB worthless with it.  Neither of these dogs is likely a good investment, never mind which one is better.  CAB's ripoff monopoly that gauged consumers for decades doesn't leave me much pity for them either.


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## galumay (30 August 2016)

poverty said:


> Uber doesn't need to make money in order to make CAB worthless with it.  Neither of these dogs is likely a good investment, never mind which one is better.  CAB's ripoff monopoly that gauged consumers for decades doesn't leave me much pity for them either.




Beware of your emotional responses over ruling logic, most businesses can be portrayed as 'gouging consumers' - thats pretty well a pre-requisite for profit. Banks do it, supermarkets do it, mining companies, utilities, insurers.. virtually ever business in every sector has been accused of it by someone, sometime.

CAB may or may not be a good investment at current prices, but its probably wise to analyse any potential investment on the facts rather than the emotions.


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## ROE (1 September 2016)

I dont think CAB is worthless by any stretch even if Uber and other ride-sharing company are successful
there is an opportunity here for trade and dividend.

they have bus division and other payment development for third party that may carry reasonable value.

at some stage thing will settle down with taxi and ride sharing co-exist, until then it hard to value it but 
you can use volatility to your advantage


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## ROE (1 September 2016)

Klogg said:


> Given Uber's valuation and the amount of cash they're bleeding, the old dog is likely the better investment.




rough calculation Uber is way over value even if they are profitable 
ride sharing or taxi market is probably around 100bn a year world wide.

say Uber capture 20% of that whole market and that is huge and generous  that bring it to 20bn a year in transaction
say they cut a fee of 20% that bring to 4bn in fee, say they have 30% net profit margin that brings it to say 1.2bn profit at 65bn odd value there is no room to move.

that is the very very bull case, this is where thing can go against them, at that margin more people will join the game.

people will find out they works for peanuts once they factor in all the cost of running their own car and independent contractor, some will leave and some new players will join at at some stage it even out and they can no longer grow or worse they lose more driver than they acquire and have to up incentives and that burned more cash.

Taxi market is very local and as they get into new market they face stiff competition and the larger the market the more cash they burned.

They have to reduce 20% and offer incentives in new market and they may not win
China case they pretty much lost and sell out to rival and take a join venture.

I can’t see them having this sort of valuation for long, more around 10bn mark if they are profitable and if they listed it will be a target of a shorter.

Another 5-10 years of cash burned and I think backer will have enough, anything that cant turn profit in 10-15 years are broken model.

so as long as CAB chucking a long at lower profit for another 5-10 years, most of these guys will be broke.

Here are the latest stats on Uber will they ever become profitable?

"In the first quarter of this year, Uber lost about $US520 million ($682 million) before interest, taxes, depreciation and amortisation, according to people familiar with the matter. In the second quarter the losses significantly exceeded $US750 million, including a roughly $US100 million shortfall in the US, those people said. That means Uber's losses in the first half of 2016 totalled at least $US1.27 billion.?"


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## Klogg (1 September 2016)

ROE said:


> they have bus division and other payment development for third party that may carry reasonable value.




CDC is a dog of a business... not really worth much.


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## McLovin (6 September 2016)

Klogg said:


> CDC is a dog of a business... not really worth much.




CDC is hopeless, and I don't know why CAB keep throwing money at it. CAB tries to sell themselves as a payments business, but direct so much of that cash into a capital heavy, low return business like buses. Getting out of the CdC biz makes total sense, imo. It's also worth noting it barely rates a mention in the prezo.

An interesting observation, imo, is that in the states where there is a LfL comparison without a price cap change (Qld and Victoria) fares processed went down. In Queensland they blamed it on mining (but WA went up?!?!), but Victoria's economy is doing fine at the moment. I guess we should expect a spike in Qld in the next year and a fall in NSW.


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## Klogg (6 September 2016)

McLovin said:


> CDC is hopeless, and I don't know why CAB keep throwing money at it. CAB tries to sell themselves as a payments business, but direct so much of that cash into a capital heavy, low return business like buses. Getting out of the CdC biz makes total sense, imo. It's also worth noting it barely rates a mention in the prezo.




You actually have to dig through the notes of their annual report to get a clear picture of it (unless I missed it?). Given CDC is listed as a $252m asset, surely they should focus on it.
I guess the fact that it returned ~6% (14.5m PAT on ~252m) on the investment is probably why they don't... What makes it even worse is the cost of debt is 3.7%. Surely they realize additional investment here is destroying shareholder capital (unless the COC applied to equity is also quite low).


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## McLovin (27 December 2016)

McLovin said:


> I give the bus thing 12 months, as in they will get rid of it. It starts to get interesting under a scenario of them selling their bus investment. Public transport companies seem to trade on abot 15-23x earnings. Comfortdelgro is on 22x itself. At that price, CAB's share in the JV is worth pretty much the entire value of CAB, leaving the payment and taxi service biz for free.




Well it ended up taking 14 months.


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## pixel (2 March 2017)

I can see a potential drop back to $3.10, but at a grossed-up divi of $1.29, even that would leave quite a bit of beer money. Disappointed that I hadn't seen this early today, but buying even now.


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## skc (2 March 2017)

pixel said:


> I can see a potential drop back to $3.10, but at a grossed-up divi of $1.29, even that would leave quite a bit of beer money. Disappointed that I hadn't seen this early today, but buying even now.




It's 90c dividend fully franked and you only get the benefits of the franking if you hold >45 days or have less than $5k in franking credit to claim for the financial year. So make sure you don't count the gross up dividend without satisfying the ATO rules.

Chart looks like it ants to break $4... and ex-div is not until 30 March so plenty of time for the price to move before the actual dividend drop off occur.


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## pixel (5 March 2017)

skc said:


> Chart looks like it ants to break $4... and ex-div is not until 30 March so plenty of time for the price to move before the actual dividend drop off occur.



no sooner said than done 






Friday's Close came out at $4.08, at which price the dividend will still yield 31.5% *for the HALF year*. As regards the franking rights, you are correct about the 45 day rule and $5000 threshold. I wrote the program with the assumption that users don't have to be told the Rules.


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## galumay (5 March 2017)

pixel said:


> at which price the dividend will still yield 31.5% *for the HALF year*




Isnt that just about meaningless though? CAB is not going to be able to be sold for anything like $4 after it goes ex div.

I sold out earlier in the year - and in hindsight it was a terrible error of timing because I could have got much nearer $4 had I held on until they announced the special divvy - and in that case I would have made a real gain, but if you buy it for $4, get the divvies and sell afterwards you might be only breakeven.


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## pixel (5 March 2017)

galumay said:


> Isnt that just about meaningless though? CAB is not going to be able to be sold for anything like $4 after it goes ex div.
> 
> I sold out earlier in the year - and in hindsight it was a terrible error of timing because I could have got much nearer $4 had I held on until they announced the special divvy - and in that case I would have made a real gain, but if you buy it for $4, get the divvies and sell afterwards you might be only breakeven.



Of course I'm not counting on reaping the full 30%+. I use my program to alert me early enough to participate in the buy-up into ex-div. It then depends on trading patterns (and a bit of experience) to decide whether to sell before ex, or stay on and collect the dividend.
That aside, it's only *one *strategy that helps earning a living.


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## galumay (5 March 2017)

Ok, i guess if you buy at significantly less than $4 then there is a reasonable chance that you can make a good capital gain prior to it going ex div and if you hold it and collect the div then the divvies plus the price when you sell should see some level of profit. 

The real winners would be the long term holders that bought in years ago at a sub $2 price, whether they sell before it goes ex div or after, its a great opportunity to exit a business which is slowly dying, with great returns.


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## skc (5 March 2017)

pixel said:


> Of course I'm not counting on reaping the full 30%+. I use my program to alert me early enough to participate in the buy-up into ex-div. It then depends on trading patterns (and a bit of experience) to decide whether to sell before ex, or stay on and collect the dividend.
> That aside, it's only *one *strategy that helps earning a living.




I think big special dividends often see a bit of franking gets priced in. Although CWN was ex 80c special last week and held very well. A positive report certainly helped too. I don't know if CAB report was or wasn't positive....


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## System (30 November 2018)

On November 30th, 2018, Cabcharge Australia Limited (CAB) changed its name and ASX code to A2B Australia Limited (A2B).


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## peter2 (7 June 2020)

So this is the old Cabcharge hey. I didn't twig until I saw the prior post. Well, this has been one disappointing company. COVID-19 hit this company very hard. 
But it still paid it's April div (0.04), impressive. 

This might be worth monitoring for a rebound as the lock down restrictions ease and there's no huge 2nd wave of infections (more lock downs). Price has perked up recently, probably with the news of the easing of restrictions. 

I've only shown the daily chart because the weekly is just so bad.


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## Tommy Shelby (13 January 2022)

A2B signed an MOU to do a land swap for a commercial grade builder. It looks good at face value due to the low valuation on the existing property in the balance sheet.






But... they just gave up 8,665 SQM of land with a 2:1 FSR and 35m building height for 1,700 SQM only 22m wide. 

I'd like to buy shares in Addenbrooke instead


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