CPU - Computershare Limited

[So_Cynical]

Nice to see the forum investors with plenty of time up their sleeves. Oh and the probable 28c partially franked dividend per year, is that like about less than 3% return at current share price?

CPU is a crappy yield-er like so many in the top 50...i hold CPU mostly for the growth potential, when the world/US takes off again so to will CPU.

 

[skc]

CPU is a crappy yield-er like so many in the top 50...i hold CPU mostly for the growth potential, when the world/US takes off again so to will CPU.

It's been 3 months since their Mellon deal annoucnement. There's got to be some update soon on that front. Any upward momentum on positive news might provide you with a decent exit sooner than May 2012.

 

[ROE]

man CPU got hammered hard ... the price now start to get my attention

 

[RandR]

man CPU got hammered hard ... the price now start to get my attention

Im going to disclose that I actually bought myself a parcel of CPU about a week ago entry price was 7.31

Id be interested in hearing your valuations and thoughts on this stock ROE.

Fundamentally I think its a good company, value wise I think i got a decent entry price (but not outstanding) and the stock has been uptrending for the last month and half now.

 

[skc]

Im going to disclose that I actually bought myself a parcel of CPU about a week ago entry price was 7.31

Id be interested in hearing your valuations and thoughts on this stock ROE.

Fundamentally I think its a good company, value wise I think i got a decent entry price (but not outstanding) and the stock has been uptrending for the last month and half now.

Short term catalyst definitely a decision on the NY Mellon deal. Although the price rising over the last month may mean the market is pricing in a positive outcome, and good old "sell the news" will come into play. All just speculation on my part of course.

BTW with the $AUD falling by 10% CPU is in a better place earnings wise. Although the deal also just got 10% more expensive.

 

[RandR]

Short term catalyst definitely a decision on the NY Mellon deal. Although the price rising over the last month may mean the market is pricing in a positive outcome, and good old "sell the news" will come into play. All just speculation on my part of course.

BTW with the $AUD falling by 10% CPU is in a better place earnings wise. Although the deal also just got 10% more expensive.

Thanks for that SKC.

I wasnt looking at this as a currency play on the AUS/USD as there earnings seemed far too diversified to get leverage off the movement downward on the AUS dollar if commodities collapse. I believe (and its been shown in the last week) that CSL is a much much better play in that regard.

I do like the fact that there planning on using long term USD fixed debt to finance the acquisition of NY Mellon, with interest rates so low over there it should almost be free money for CPU.

If they can achieve an operating margin on NY mellon of 20% (not unreasonable I think given CPU's operating margins have been around or just above 30%) The NY Mellon deal could add about $58 million in EBIT. Based upon NY Mellon revenues of 291 million in 2010. So possibly around $40 million NPAT. So for 550 million of long term low rate USD debt its not a bad deal. Especially if they can increase revenues. Based upon my rough calculations there it would add about 7 cents EPS. (which coincidentally is about the same increase in EPS analysts are forecasting between 2011 and 2013 FY's.)

Your technical analysis is much better then mine SKC, what are your thoughts on CPU technically ?

 

[So_Cynical]

I don't really rate my technical analysis that highly but the chart is pretty obvious imo.

It's done much better than others since early Aug but still remains in a firm down trend.

If it churns between $7 and $8 for a few more months then things are going to be bit less bearish.

View attachment 44768

Quick...wrong chart, you have like 3 minutes to edit your post before its locked.

---------

CPU will recover, fundamentally its a true Aussie, international success story.

 

[skc]

quick...wrong chart.

Indeed. Now I lost my words but the picture says it all.

 

[budfox26]

CPU - ComputerShare

I bought into this stock around the $10 mark. Its now trading closer to the $7 mark. It was a really bad trade for me and I don't really know what's happening with the company. Should I ditch now and cut my losses?

Thanks

 

[snsdmonkey]

Re: CPU - ComputerShare

First question: why'd you buy into it?

 

[ROE]

Re: CPU - ComputerShare

I bought into this stock around the $10 mark. Its now trading closer to the $7 mark. It was a really bad trade for me and I don't really know what's happening with the company. Should I ditch now and cut my losses?

Thanks

Cant advice on what to do but at $7 the down side is low and
the upside is better.

CPU is a good business with very reliable earning stream so you dont have to worry
about it fall off a cliff with some shock earning down grade...

CPU activities is dependent on market action, take over, more companies listing etc
these activities generates registry activties which is CPU main business...

Once the market pick up you can see up tick in CPU earning if you prepare to wait
that long....

I'm more of a buyer at these price than a seller...

 

[matty77]

yup i have recently averaged out on CPU and am now back in the green.

I hold a long term view (as in longer than 3 years) on this stock.

 

[budfox26]

What do you think the price will be in 3 years matty77

 

[matty77]

No idea to be honest.

The best answer I can give you is "more than it is now"

 

[ROE]

Own CPU for the first time During the August Panic

I just wait for each panic, then load up wonderful business at a fair price

 

[RandR]

Own CPU for the first time During the August Panic

I just wait for each panic, then load up wonderful business at a fair price

Quite pleased with my entry at 7.31 Im seriously considering whether to take my capital back out and leave the profits in to ride free. Id like to ride this baby all the way but I just dont think its very prudent in this market, im feeling very inclined just to leave the profits in and preserve my capital back into my ubank account

 

[RandR]

I decided against taking profit to see if I can ride this up more. Its come back quite decently since the jump up on monday. But needs to now have a green day and form a higher high before getting more comfortable technically. Because of the uncertainty in markets worldwide, im placing a stop at 7.75 Will at least ensure I exit my position in CPU at a profit, if the SP gaps back down with the market.

Will be interesting to see how the market reacts to there increased Debt to equity that will go up quite substantially once the NY Mellon deal is completed.

I was looking through the last FY year NY Mellon report and it appears they were achieving a 45% operating margin on the shareholder services business, If CPU can achieve those sorts of margins on the acquisition it will be a very positive deal for the company.

Own CPU for the first time During the August Panic

I just wait for each panic, then load up wonderful business at a fair price

Would love to hear some of your thinking on this business ROE.

 

[ROE]

I
Would love to hear some of your thinking on this business ROE.

I think CPU has many options for delivering EPS increase for sometimes to come.
It is a global share registry player, so any major international company with wide range of shareholder and stock options for their employee will use Computershare
IBM, Apple etc.. will all use CPU. With the rise of China and Asian market more of these companies will make global foot print and CPU is ready to take on their business..

CPU can also take on new market like Carbon credits registry, carbon permit etc..
Mortgage Management, anything that require record keeping that ties ownership to
an asset, more countries open up to free market and stock market, CPU is ready
to tap those market..

the Mellon purchase is a perfect acquisition, going to be some massive saving there
on IT and infrastructure, CPU done this many times before like QBE so they wont have execution issues integrating new business into their infrastructure...

and the cash generation of this business is very sweet ...$500m for Mellon without taping shareholder
for more cash, it's a true test to their enduring cash generation model

all in all very exciting time to own CPU

 

[robusta]

I have noticed a couple of ASX companies changing fron CPU to Link Market Services and Boardroom Pty, is this common?

 

[So_Cynical]

I have noticed a couple of ASX companies changing fron CPU to Link Market Services and Boardroom Pty, is this common?

Common...no

There is churn in all industry's when it comes to service providers...i imagine that Link is a cheaper option because many of the bigger stocks use Link, perhaps Link do cheap deals for some larger company's.?

The Link people were very good at the Dexus AGM i attended...and the Link website has improved outa sight...as in it actually does almost everything the CPU site has done for half a decade or more.