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DWS - DWS Limited

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alex keaton

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This company has been unfairly treated recently and been sold down heavily over the last year.

They have an amazing track record of growth and are still providing great returns.

Zero long term debt, amazing looking balance sheet, high margins (for it services)

It's looking good for a breakout over 60 this week, Volume picked up towards the end of last week.
 
Re: DWS - DWS Advanced Business Solutions

alex keaton said:
It's looking good for a breakout over 60 this week, Volume picked up towards the end of last week.
Click to expand...

And there she goes.. up 9% this morning (on light volume)

Chart has next short term resistance is at 75c
 
Re: DWS - DWS Advanced Business Solutions

This quality stock got hammered with everything else at the beginning of the year and is recovering to more appropraite levels. However, it has forecast growth for the year ahead and maintained a very healthy 9.5c dividend fullly franked. I bought stock midway through last week at $1.22 and closed on Friday at $1.305 will dip tomorrow as it goes ex-dividend but will be looking to top up as I believe this business model will shine over the long term.
 
Re: DWS - DWS Advanced Business Solutions

Any holders of this stock on here?
Half year results seemed to be well received by the market today.
 
Re: DWS - DWS Advanced Business Solutions

I'm looking at getting in on this stock but I'm not sure on what price to get on at. Its had a good run since June but its starting to track back down again, any suggestions? :)
 
Re: DWS - DWS Advanced Business Solutions

Good question, fanger. Did you take a position in DWS?

I've been looking at DWS closely for some time but my itchy finger hasn't quite pulled the trigger. Certainly seems to be a well-run company and I like the fact it has no debt. I'm also sentimental to the company because it's a sponsor of the mighty Hawks. :)

Share price seems to be a bit volatile at the moment, with a slight downtrend according to my uneducated eyes. Would be nice to see it break upwards.
 
Re: DWS - DWS Advanced Business Solutions

I got in around the $1.63 mark then the stock went up to $1.70 then took a dive and now its sitting around $1.58, so I'm down around 3%. I'm not worried the stock still is looking good plus it has a 7.5% fully franked dividend and an esimated 13% growth for 2011.
 
Re: DWS - DWS Advanced Business Solutions

Sharing your views, it is a good company, very well run business, good divvy and the report to the shareholders was good too. Roger Montgomery rates DWS as A1 business with very good fundamental values. I am, too, a holder.
 
Re: DWS - DWS Advanced Business Solutions

Nasty surprise in the market update released today. A major telco client of DWS informed DWS that reduced services from DWS would be required over Christmas-New Year's.

Share price dropped 10+% in the 90 minutes after the update was announced to the market.

I'm a bit surprised DWS didn't ask for trading in its shares to be traded, because you'd be laughing if you sold out of DWS in the morning, before the announcement was made.

The announcement has made me reevaluate my views on DWS.
 
Re: DWS - DWS Advanced Business Solutions

babka said:
Sharing your views, it is a good company, very well run business, good divvy and the report to the shareholders was good too. Roger Montgomery rates DWS as A1 business with very good fundamental values. I am, too, a holder.
Click to expand...

Bad announcement today that put a 20% dent in this proven past performer. The profit downgrade was ~10% which isn't a lot, but considering the market was probably expecting +10% earnings growth... also I found the message in the announcement a bit cryptic - why would a single client pausing work over a month and a half cause such a large downgrade in profits?

$1.50 was a good support level but now will probably turn resistance for a while.

OKN was another IT company with a recent downgrade... will it become a trend in the industry??
 
Re: DWS - DWS Advanced Business Solutions

This is a good buying opportunity in my opinion. The sell off has brought DWS to a nice discount to intrinsic value. Adjusting for the downgrade I have a 2011 value of $1.61 with a 12% required return. If they get back on track, which considering their history I have confidence they will, then 2012 is $1.83.

Having said that, it was in a downtrend before the news so I'm not buying in till it hits around $1.20
 
Re: DWS - DWS Advanced Business Solutions

I picked up some more after the stock tanked. I didn't get the bottom but not far from it.
 
Re: DWS - DWS Advanced Business Solutions

fanger said:
I picked up some more after the stock tanked. I didn't get the bottom but not far from it.
Click to expand...

Same with me. Dived in to pick up a nice chunk of this business today. Six months time everyone will be wondering what all the fuss was about.
 
Re: DWS - DWS Advanced Business Solutions

Brave move, I think, to dive into the market straightaway. I wouldn't be surprised to see DWS congest for a few months before taking off again. Could take up to six months to replace the revenue lost through this slow-down.
 
Re: DWS - DWS Advanced Business Solutions

McCoy Pauley said:
Brave move, I think, to dive into the market straightaway. I wouldn't be surprised to see DWS congest for a few months before taking off again. Could take up to six months to replace the revenue lost through this slow-down.
Click to expand...

You could be right. I have had DWS on my watchlist for a while now just waiting for it to get cheaper, though I wish I was looking in June @$1.12!! But hey a company like this does not come into my price range too often. I have no idea what the sp will do in the next six months but I am fairly confident the NPAT will grow fairly significantly in the second half of FY 2011.:2twocents
 
Re: DWS - DWS Advanced Business Solutions

skc said:
Bad announcement today that put a 20% dent in this proven past performer. The profit downgrade was ~10% which isn't a lot, but considering the market was probably expecting +10% earnings growth... also I found the message in the announcement a bit cryptic - why would a single client pausing work over a month and a half cause such a large downgrade in profit?
Click to expand...

Found the announcement a bit cryptic as well

"Based on the information available at this point DWS anticipates H1 EBITDA will be between $12.0M-$12.5M (PCP $13.4M) and expects the H2 EBITDA results will be impacted by not more than $1.0m."

Is this a profit warning or not? Notice they are talking about EBITDA not NPAT. If you take a look at DWS annual report you will see they are talking about increasing consultants from ~500 to ~ 1000 by 2014 also the new Business Analytics practice with IBM / Cognos delivering higher margins.

Everyone will have to make up their own mind on DWS but for me I became a shareholder yesterday and bought more today when they became cheaper.:D
 
Re: DWS - DWS Advanced Business Solutions

robusta said:
Found the announcement a bit cryptic as well

"Based on the information available at this point DWS anticipates H1 EBITDA will be between $12.0M-$12.5M (PCP $13.4M) and expects the H2 EBITDA results will be impacted by not more than $1.0m."

Is this a profit warning or not? Notice they are talking about EBITDA not NPAT. If you take a look at DWS annual report you will see they are talking about increasing consultants from ~500 to ~ 1000 by 2014 also the new Business Analytics practice with IBM / Cognos delivering higher margins.

Everyone will have to make up their own mind on DWS but for me I became a shareholder yesterday and bought more today when they became cheaper.:D
Click to expand...

Yep, I noticed that in their announcement earlier this week. Very strange, I thought. I think I'll wait for their next guidance to see what effect the slow-down will have on the bottom line.
 
Re: DWS - DWS Advanced Business Solutions

6 days of trading lower on increasing volume. Fri about equaled Thur volume. I'm dying to jump in to this one. I originally had a buy in at $1.20 but pulled it. From a purely TA point of view they say lower closing prices on increasing volumes is a bad sign short term. You want to wait for the volume to decrease significantly, the sp swings to moderate and you want that to consolidate for a period of time. It means the sellers are exhausted. The consolidating period though...who knows how long that is or should be. When a stock is sold off too hard and the RSI plummets south you will at least get a dead cat bounce. Whether the trend then reestablishes a northward travel depends on the real story of the company. DWS has a great history and one client pulling a bit of work does not mean disaster. It just means an over reaction by the market.

Having said all that I'm going to buy some at $1.20 then wait till the selling settles and then buy a lot more. :)

If you're looking for other great quality stocks to follow check out MCE, SWL, ARP, MLD. Another, FGE, has been sold off after a short burst following a profit UPGRADE. Just fast money going in and out. Opportunity there for sure. Good luck. :)
 
Re: DWS - DWS Advanced Business Solutions

ubtheboss said:
6 days of trading lower on increasing volume. Fri about equaled Thur volume. I'm dying to jump in to this one. I originally had a buy in at $1.20 but pulled it. From a purely TA point of view they say lower closing prices on increasing volumes is a bad sign short term. You want to wait for the volume to decrease significantly, the sp swings to moderate and you want that to consolidate for a period of time. It means the sellers are exhausted. The consolidating period though...who knows how long that is or should be. When a stock is sold off too hard and the RSI plummets south you will at least get a dead cat bounce. Whether the trend then reestablishes a northward travel depends on the real story of the company. DWS has a great history and one client pulling a bit of work does not mean disaster. It just means an over reaction by the market.

Having said all that I'm going to buy some at $1.20 then wait till the selling settles and then buy a lot more. :)

If you're looking for other great quality stocks to follow check out MCE, SWL, ARP, MLD. Another, FGE, has been sold off after a short burst following a profit UPGRADE. Just fast money going in and out. Opportunity there for sure. Good luck. :)
Click to expand...

Profit warnings usually come in sets of 2 or 3. So often you see management predicts a return to higher profits in the second half, but without providing any valid points on how that would happen. That always suggests to me there is more pain before any turnaround. Take someone like PRG or NOD for an example...

I like buying good companies when they get sold off for no reason. I don't like buying when they get sold off for a proper reason. A semi cryptic profit warning announcement is a proper reason for a sell off.

Many of these IT firms tend to trade around PE 15 with 10-15% growth. If DWS will flatline for 2 years then current PE ~10 doesn't suggest immediate bargain to me.
 
Re: DWS - DWS Advanced Business Solutions

skc said:
Profit warnings usually come in sets of 2 or 3. So often you see management predicts a return to higher profits in the second half, but without providing any valid points on how that would happen. That always suggests to me there is more pain before any turnaround. Take someone like PRG or NOD for an example...

I like buying good companies when they get sold off for no reason. I don't like buying when they get sold off for a proper reason. A semi cryptic profit warning announcement is a proper reason for a sell off.

Many of these IT firms tend to trade around PE 15 with 10-15% growth. If DWS will flatline for 2 years then current PE ~10 doesn't suggest immediate bargain to me.
Click to expand...

DWS is an IT services company, providing services to ASX 50 companies and government agencies. (ATO Etax...)

When business conditions are tough the easiest thing for business to cut is the IT company. DWS has grown revenue for nineteen years. This includes the GFC. DWS had revenue in 2010 of ~ $95 million, 2009 ~ $88 million.

robusta said:
"Based on the information available at this point DWS anticipates H1 EBITDA will be between $12.0M-$12.5M (PCP $13.4M) and expects the H2 EBITDA results will be impacted by not more than $1.0m."

Is this a profit warning or not? Notice they are talking about EBITDA not NPAT. If you take a look at DWS annual report you will see they are talking about increasing consultants from ~500 to ~ 1000 by 2014 also the new Business Analytics practice with IBM / Cognos delivering higher margins.
Click to expand...

So back to the original question, Is this a profit warning or just one telecommunication company needing less service over christmas?

This from the annual report

"One of the major successes for DWS NSW during the year was the engagement for a prominent telecommunications organisation to deliver content via the internet directly to the home through set-top devices, PCs and internet enabled televisions. The solution developed and implemented by DWS provides services for users to register fot the service, stream available content, allow trailer viewing, and purchase and securely view the selected content... This is simply one example of numerous successfully completed projects we have delivered during the preceding 12 months"

Hmmm Sounds a bit like Telstra's THub to me. Not sure if anyone has noticed but there has not been a massive uptake of THub. You used to have to buy it but now it is been given away with Foxtel deals. Telstra is also desperately cutting costs.

So the questions I am asking are:

Is this loss of revenue from one customer to be followed by more?

I know how DWS performs in tough economic conditions, how do they perform in good conditions?

Is the company worth 20% less than two weeks ago because one customer has reduced demand?

Can the consultants employed by the Telecommunication company be able to be employed elsewhere?

Will DWS be able to meet the goal of doubleing consultants (~500 - ~1000) by 2014 ?

Will DWS be able to maintain historically high ROE?
 

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