CPU - Computershare Limited

[ROE]

Links is nothing compared to CPU, they may be able to get a few business here and there in Australia but CPU is global most global companies end up using CPU.

also business churn through registry like anything else in any industries
you lose some customers you gain some other...

as the companies get bigger and more global they tend to move to CPU..

CPU manage their employee stock options,proxy for investor all over the place...
imagine Apple and IBM with employee world wide use anything else but CPU...

plus more than 70% of CPU business will be outside Australia....

Links is a business run by private equity juice up so they can flock it off
to the market at crazy price they are in the process of probably

offer cheap service to get more customers on board so they can fix their book
that look attractive and flock it off to the some fund managers.

these fund mangers like pretty diagrams and number ... Myers, Collins food, Rebel sport comes to mind recently

If you are buying a registry business out of the lot CPU is a much much better business...

 

[RandR]

Was just reading the agm presentation from a month or so ago. some interesting tidbits dropped.

On the positive side, the recent acquisitions look great, they are anticipating Service Works and Specialised Loan Servicing to provide about a 5c eps. (with eps of 51c thats a nice boost of about 10%)

BNY deal looks good. Should add revenues of about USD290million. (which represents just over a 1/3rd of current CPU revenues) I looked at the BNY financial statements and they claimed to be achieving about 40% operating margin on this division. If CPU can keep the margins on those revenues up anywhere near that, that particular acquistion could be a BOOM for CPU.

On the downside, CPU profits ARE being affected by the low market volumes that have been trading. Also, transactions/floats are obviously not in booming demand right now so that side of the business is not doing as well. CPU have indicated they expect 1st half earnings to be down 15% on previous year.

The SP is at a really interesting point right now, has found really strong support at the $8 level, interesting to see whether or not it will drop below or keep on bouncing off it till xmas.

 

[RandR]

I cant help but feel that the lessoning volumes being traded is going to be a ball and chain around CPU for a little while yet, be very interesting to see the guidance and profit announcements out around februarish. Ive taken capital out of this (at a profit) for now. But will retain the profit in to let run.

 

[Nutmeg]

BNY deal looks good.

At over half a billion dollars, I think the BNY deal looked expensive. Does anyone know what BNY's average 5 year ROE was?

 

[pixel]

At over half a billion dollars, I think the BNY deal looked expensive. Does anyone know what BNY's average 5 year ROE was?

Sorry, can't help you there;
but the Market may have shared your reservations - initially.
At the end of June, I noticed some "obvious" accumulation, and when the falling trendline was broken a couple of days ago, I started to go Long.

Daily chart:


$7.67 is the new resistance that will have to give before I top up, and $7.53 will obviously have to hold (on a Closing basis).

 

[Knobby22]

I agree.
Time to go long.
The banks charts are similar as are many other companies that are not part of the mining boom or subject to consumer demand.

 

[So_Cynical]

(14th-February-2011) I just couldn't help myself today and moved my buy order up to $9.59 in the early arvo and got filled CPU is now my single largest holding making up 11.8% of my total portfolio, today's entry is also my largest ever ($) buy, so a real punt for me.

(17th-July-2011) Well so much for that trade being completed by May...perhaps May 2012.

Anyway i brought some more CPU on Friday @ $8.36 just had to take advantage of the continued SP weakness...i wouldn't be much of a 'low cost average' portfolio builder if i didn't take advantage of substantial SP weakness

CPU had another good day today, closing at $10.24 ~ i hold 4 parcels all in clear profit.

Never average down never buy good stocks cheap always take the loss people who average down just cant admit they were wrong never risk more than 2% of your capital in any one stock...Blah blah blah.

---

Have to admit that i entered way way to early, never imagined it would take 2 years to come good...but i knew it would.

 

[prawn_86]

Have to admit that i entered way way to early, never imagined it would take 2 years to come good...but i knew it would.

Hi SC,

Slightly off topic but couldnt really find the correct thread for it.

For your strategy (which i do admire by the way), how would you have gone if you had just bought or averaged into the index. Obviously with the index near a 20 month high how much of an effect has that had on your performance?

 

[matty77]

I too decided to average on this one, ended up being at $8.28...

Better than a loss.

It was always long term anyway so I am not too fussed, but what do people think the short/long term outlook is for CPU?

edit: just reading previous page I already stated this ages ago! hahaha lol

 

[So_Cynical]

Hi SC,

Slightly off topic but couldnt really find the correct thread for it.

For your strategy (which i do admire by the way), how would you have gone if you had just bought or averaged into the index. Obviously with the index near a 20 month high how much of an effect has that had on your performance?

With the run up in the market almost all (not APN) my boats are rising...and that's what i always though would happen, so all according to plan, my portfolio is hitting new all time highs and that's with me taking money out to buy some real estate...its great!

I find it difficult to do a STW type comparison..to be fair i would of committed most of my funds before bottom (like i did with CPU) so i reckon i would of averaged into the ASX200 at about 4200 but could of been as high as 4300, because i did buy allot of stocks on that down leg between Feb > June 2011.

Then was simply stuck in a heap of trades with no funds to average down, i was reduced to a trade every 3 months or so and it went on like that for over a year...so from 4200 to 4800 is 14.3% and i reckon that (had a look back at some 2011 portfolio screen shots from mid 2011) my portfolio is up about 21% and that includes divis reinvested or simply ploughed back in.

So in conclusion, the outcome would be roughly the same, perhaps i did a touch (1 > 3%) better, depending on where the lines are drawn...come to think of it, because i have so many stocks i was able to at least make some exits with profit to keep some momentum..if i was in a single stock (STW) that would not of been possible.

 

[LionTurtle]

How come CPU lost over 6% today?

I am trying to work out if now is a good time to buy.

so CPU do the computershare registry thing all my shares are on.. so they are not going anywhere soon.

What else are they involved in, other IT services? they also invest in stocks in different markets?

 

[So_Cynical]

How come CPU lost over 6% today?

I am trying to work out if now is a good time to buy.

so CPU do the computershare registry thing all my shares are on.. so they are not going anywhere soon.

What else are they involved in, other IT services? they also invest in stocks in different markets?

Do a little digging, CPU is a Global share registry, share holder services business, large exposure to the USD...big business, in the ASX50 and not in any danger of going under.

 

[Miner]

It is about a year since last posting was made on this thread.
CPU has been heavily recommended by Motley Fool and with A$ vs US $ ratio CPU is particularly very attractive when you calculate just 20% positive variation on income from US sources.

 

[So_Cynical]

It is about a year since last posting was made on this thread.
CPU has been heavily recommended by Motley Fool and with A$ vs US $ ratio CPU is particularly very attractive when you calculate just 20% positive variation on income from US sources.

CPU is also IMO a stock that is due for a big move up, just pulled up a 5 year chart and saw that CPU has been moving up over the last 3 years, back up to where it was before..due for a move up beyond the 6 year trading channel, the $12.50 to $13.50 area has been a hard nut to crack.
~

 

[Miner]

CPU is also IMO a stock that is due for a big move up, just pulled up a 5 year chart and saw that CPU has been moving up over the last 3 years, back up to where it was before..due for a move up beyond the 6 year trading channel, the $12.50 to $13.50 area has been a hard nut to crack.
~

So_Cynical

That was not a cynical but a very positive endorsement from you to Motley's recommendation.
One of my small parcel buy order got executed and I was getting nervous even after doing some calculation without any chart. Now your chart makes a lot of sense and thanks a lot.

Cheers

 

[notting]

heavily recommended by Motley Fool and with A$ vs US $ ratio CPU is particularly very attractive when you calculate just 20% positive variation on income from US sources.

All well and good but you gotta actually run the business well too.

impact of the stronger USD and the anticipated lower yields on client balances are again expected to be significant earnings headwinds. The business is also anticipating some increased costs including those associated with investments in product development and efficiency initiatives. Taking all factors into account the Company expects Management EPS for FY16 to be
around 7.5% lower than FY15

Could have been forgiven for thinking yesterday was an over reaction and buying opp by the move.
Not so cheesy today but.
Tomorrow, yes, tomorrow.

 

[pixel]

LOL LOL LOL Computershare must have a stake in Australia Post!
... or a very sloppy programming crew

I recently logged on to their website (it's secure alright, but takes ages to respond!) to set the communication options for a few new shares to email. For years, I've been using a dedicated email account for everything to do with share communication, asking for all reports to be sent to that address. As I hadn't updated quite a few new ones, I didn't bother to go through the entire portfolio, but used the "All" facility that's provided.

A few days later, the Postie brought about 100 individual letters, one for each company that I've ever owned share in, advising that they will now send all reports to that email address.

 

[Miner]

So_Cynical

That was not a cynical but a very positive endorsement from you to Motley's recommendation.
One of my small parcel buy order got executed and I was getting nervous even after doing some calculation without any chart. Now your chart makes a lot of sense and thanks a lot.

Cheers

CPU chasers and folks including SO Cynical

It has been a year since I posted on CPU.
I noticed the share price has gone down since then and yes my portfolio on CPU has lost by 9% about since I bought. Motley Fool (I am losing faith on their recommendations now ) still keeping it a buy and Bell Potter has said sell .
I am confused as all comments by BP seem to be positive and so the presentation from CPU on MQ conference presentation following a big UK acquisition.

Could SC and other posters please comment ?
I am still holding CPU but confused now to retain or increase.

 

[Triathlete]

CPU chasers and folks including SO Cynical

It has been a year since I posted on CPU.
I noticed the share price has gone down since then and yes my portfolio on CPU has lost by 9% about since I bought. Motley Fool (I am losing faith on their recommendations now ) still keeping it a buy and Bell Potter has said sell .
I am confused as all comments by BP seem to be positive and so the presentation from CPU on MQ conference presentation following a big UK acquisition.

Could SC and other posters please comment ?
I am still holding CPU but confused now to retain or increase.

Looking at the Fundamentals from stock doctor they do not look that good to me with
EPS at -5.15 June 16
EPS at 5.45 June 17
so nothing to fire up the share price at this stage IMO.

Looking at the weekly chart show it may have bottomed on the 25/2/16 @$8.92. It
has broken through the downtrend line but I would wait until the stock makes another higher low and breaks through $10.49 if I was looking to buy in.

This is not a recommendation just my own opinion and is a very quick analysis would really need to do some more analysis on this stock to satisfy myself.

 

[Triathlete]

So_Cynical

That was not a cynical but a very positive endorsement from you to Motley's recommendation.
One of my small parcel buy order got executed and I was getting nervous even after doing some calculation without any chart. Now your chart makes a lot of sense and thanks a lot.

Cheers

Of course a chart is always easy in hind sight .If we go back and take a look at the chart post #74 we can see that it was moving up within the channel which could have been a sign that the stock would continue higher.

If I was following the stock at the time I would have also used Elliot wave theory which could have also alerted us to the fact that there was a possible 5 wave structure up in this channel as well and would have been looking for the 3 wave correction phase once it broke through the bottom line of the channel , which is what eventually happened.

Oh hindsight is wonderful..