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A2B - A2B Australia

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

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..
 
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.
 
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.
 
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.
 
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.


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

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

 
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!)
 
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
 
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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