ABS - ABC Learning Centres

Miner · 29 February 2008

In short
Todays Huntley Newsletter has recommended ABS as SELL. ONly two days ago they said it as HOLD.
What is an irony - SELL when the trading is closed.

Probably tomorrow Friday when the trading is resumed the share price will follow CNP's trend and price will start probably from 90 cents just to go down wards.

Directors are at default but should this be a buying opportunity at 50 cents?
Don't know.

investorelse · 29 February 2008

Funstastic and the property business must go. These flashy accessories are (were) only good in a positive market.
The Amazing Aussie dollar will continue to hurt ABS returns as well as the US economy trend.
4 @ Comsec have this at a stong buy still even with the forcast lower.
Question: Why does ABS have (seemingly) no trouble securing huge credit?

Miner · 29 February 2008

More bad days

After trading halt now suspended from quotation.
It seems to be there is some Singaporian Chinese hands to buy up.
Poor Lazard - what science was applied on purchase ? You would think this million dollar paid investment bankers would have some brain. All white collared thugs.
What great Keith Nelson and his great curve, Directors are buying will tell us?
Enjoy the attachments

josjes · 29 February 2008

Singapore Temasek has filed an increase of holding from 12% to around 14.6%. They bought at last close of trading on Tuesday 8 mill shares @ 2.14 , so I reckon there will be strong support at that level.
Plus, just came out tonight, share will be in suspension further, pending release of accouncemet of indication of interest on part of its business.

benwex · 29 February 2008

Miner said:
In short
Todays Huntley Newsletter has recommended ABS as SELL. ONly two days ago they said it as HOLD.
What is an irony - SELL when the trading is closed.

Probably tomorrow Friday when the trading is resumed the share price will follow CNP's trend and price will start probably from 90 cents just to go down wards.

Directors are at default but should this be a buying opportunity at 50 cents?
Don't know.

I disagree totally with your prediction...

I feel there will be strong support for ABS and the low of 1.15 on tuesday was due to climactic selling on the part of margin calls by directors and a few other "poor" sods...

The fact that you have Temasek and Lazards increasing their holdings, I believe ABS is in play (carve up or buy out) and a victim of directors greed more than the businesses debt position...

These two holders are pretty good guys to have backing up the business IMO..

This is not a CNP and will not be a lamb to the slaughter.

benwex

Prospector · 29 February 2008

investorelse said:
This is the markets issue alone, the market values the stock.

You are joshing aren't you? Since when is it market forces when multiple Directors sell milllions of their shares, one of them just prior to a poor announcement, allowing the market to determine the prices?

Nice about being married to an ABC employer, and being happy about that, but what has that to do with the current discussion.

And for what it's worth, no-one here is gloating, people here have been burnt with either this, or other dealings by Directors, in other companies and have every right to discuss the legalties/moralities of what is happening here! I don't see gloat anywhere, quite the opposite.

investorelse said:
Question: Why does ABS have (seemingly) no trouble securing huge credit?

Did you mean 'did' or 'does'.

However, if Temasek are buying further into this, it may well worth putting ABS on the watch list.

ROE · 29 February 2008

Just remember big funds has often get in and out in a time frame of a week if they discover something that they didn't like. So they buy first ask question later.

So from 1.15 to 2.14 because they are getting in...the question is what if they decided to cut their loss and get out? How low can the price go when there are so much shares around and no one is buying?

TheAbyss · 29 February 2008

On the human side, ABC have some of the best people i have been involved with in my professional career. The staff of ABC are very good at their jobs and deserve some support in a time of chaos. On the whole, the entire ABC team are highly cappable professional people who enjoy their jobs and are very good at them. Eddy recruited a lot of people along the way who left very good positions to get on board with a visionary and do not deserve what is happening to them.

I for one sincerely hope that ABC get out the other side of this in one piece. Sure Senior management allowed Eddie to get ahead of himself and place ABC's future at risk and he needed to be reigned in which has certainly happened no matter where this ends up.

I think Eddie got carried away with wanting to be biggest boy on the block and just kept wanting to be bigger and bigger and eventually bloated himself on debt to the point of implosion (a nice mental image actually). Well now the sharks are circling and taking chunks out of him as well. Lets hope he learns from it and manages to to keep a very good company afloat.

Best result for ABC would be for the US and UK centres to be divested for enough funds too pay off what was borrowed to buy them (which could be difficult so a few other assets will probably have to go). ABC's business model for Australia is more than viable in its own right if they can keep it.

Perhaps if Temasek and Lazard get a board member or two they can reign in the growth and stick to the core business and remain profitable without trying to expand into markets they dont understand or take risks to stroke egos without full consideration of the inherent risks involved.

Nicks · 29 February 2008

investorelse said:
After the event the questions arise about disclosure... but they were nowhere before the event

Ummmmmm, well the market would have asked questions if they had had a chance. Mr Kemp Offloaded a big stash Friday, report released Mon, all other directors forced to offload Tues.

I think there are SERIOUS questions about disclosure with ABS.

Disclosure questions will often result after the event. It's normal - thats what disclosure and insider trading is always aboout - stuff that happens before an event, or using knowledge before and event.

Mr Peaman · 29 February 2008

My opinion - 3 positives so far pushing up the price and only 1 pushing down - There is still one variable that can go either way...

* T+3ers - They need to cover their loans so they will be fake buying in my opinion to push up the share price.
* Management buying their shares back - Maybe
* Temasek and others will be buying al lease at $2.14 so that sets a floor

*Hedged funds are going to be the only ones pushing the share price down at this stage. And with the scrutiny thats around at the moment about this on this very highlightd and public Company I doubt that they will be shorting anyone!

Unknown Variable is the interest in the companies Assets - Probably selling off the American Assets - If this is the case than i am of the opiniuon that this will be positive for the share price as at the moment Americans are un sure of what they are doing - this also decreases the level of debt!

IMHO i believe the share price will rise on open - And if the sale ends up being positive for the company than around $4 sounds about right to me!!!

ROE · 29 February 2008

Most of their purchase are fund on debt and buy at a premium price.
If they force to sale, they get much less value in return but own the same amount of debt..so debt is bigger than equity.

with US going into a recession, childcare facility will be in less demand so they have to drop a fair bit
for people to take on the risk.

so assume they let go of US arm they will still carry a big chunk of debt so
it be a long while before this business is making decent returns.

I think at $2 it's not that cheap but then again I wouldn't get into a business with such a crab ROE

dhukka · 29 February 2008

ROE said:
Most of their purchase are fund on debt and buy at a premium price.
If they force to sale, they get much less value in return but own the same amount of debt..so debt is bigger than equity.

with US going into a recession, childcare facility will be in less demand so they have to drop a fair bit
for people to take on the risk.

so assume they let go of US arm they will still carry a big chunk of debt so
it be a long while before this business is making decent returns.

I think at $2 it's not that cheap but then again I wouldn't get into a business with such a crab ROE

Didn't you just buy into CCP which now has a very crap ROE of about 12% forecast for FY08. That is, if you believe their latest downgrade?

josjes · 29 February 2008

ROE said:
Just remember big funds has often get in and out in a time frame of a week if they discover something that they didn't like. So they buy first ask question later.

So from 1.15 to 2.14 because they are getting in...the question is what if they decided to cut their lost and get out ? how low can the price go when there are so much shares around and no one is buying?

ROE said:
Someone just take a big stake in CCP. I cant read the damn form with hand writing, can someone with better eyes read it?

Obviously someone sees value in this.

For CCP, Some obscure fundie increases stake, it's obviously hidden value.
For ABC, Some well known respected value manager (Lazard) and Foreigner (Temasek) with stash of billion dollars cash increase stake, it's only short term trading.
'Beauty is the eye of the beholder'

ROE · 29 February 2008

dhukka said:
Didn't you just buy into CCP which now has a very crap ROE of about 12% forecast for FY08. That is, if you believe their latest downgrade?

Wrong... historical CCP beat ABS by a country mile and even at 12% which is average that's a far cry from 5-8% which is below standard.

ROE · 29 February 2008

josjes said:
For CCP, Some obscure fundie increases stake, it's obviously hidden value.
For ABC, Some well known respected value manager (Lazard) and Foreigner (Temasek) with stash of billion dollars cash increase stake, it's only short term trading.
'Beauty is the eye of the beholder'

Most funds like Lazard don't get into stock below certain market cap.. ie small cap companies except for boutique funds where they have more flexibility on what stocks they buy into.

They obviously want to make money out of stocks they invest but You cant always assume just because a fund buy into a stock it going to make great return.

Many times they get it right and there are time they got it wrong too.
If you can pick winners all the time you can be a billionaire pretty quick.

Even Warren Buffet make bad investments.

dhukka · 29 February 2008

ROE said:
Wrong... historical CCP beat ABS by a country mile and even at 12% which is average thats a far cry from 5-8 % which is below standard.

Historically yes the ROE is very good, however given recent events I wouldn't be using historical ROE's to value this company. 12% is average? I'd say it's on the low side.

ROE · 29 February 2008

dhukka said:
Historically yes the ROE is very good, however given recent events I wouldn't be using historical ROE's to value this company. 12% is average? I'd say it's on the low side.

I dont want to get into tick for tat argument but if you google search for American and Australian companies average ROE you find it will falls between 10-15% .... 15% start to come into the high range and most people will be happy to get ROE of 15% of course you get exceptional company where it exceed it with 20,30 and even 40-50% ROE but as a whole it's around low 10.

Other people who came across various research paper on ROE can comments on this.

Peace

investorelse · 29 February 2008

Stakeholders: mutlibank syndicate funding, government, and lots of interesting new majors, I like it!
"Whats it got to do with the discussion?"...Just a dose of reality in a thread in a fantasy.
Time to get back to the core this business, Thats where it's going...
not in careers123 and the rest.
lets play!

dhukka · 29 February 2008

investorelse said:
Stakeholders: mutlibank syndicate funding, government, and lots of interesting new majors, I like it!
"Whats it got to do with the discussion?"...Just a dose of reality in a thread in a fantasy.
Time to get back to the core this business, Thats where it's going...
not in careers123 and the rest.
lets play!

Clearly you haven't "moved on" yet. I assume your latest piece of garbled nonsense above is supposed to say; "Just a dose of reality in a thread of fantasy."?

The only fantasy here is the mindset of any ABC shareholder who thought this company was a good investment. The writing has been on the wall for years and now the chickens have come home to roost.

Rather than vent your bitterness here, have a look in the mirror and take responsibility for your own actions.

seden33 · 1 March 2008

Shat more could u ask for , this is the perfect scenario for abc I feel sorry for ed and wife they got touched up . imagine if they were making massive profits off hard working familys struggling with interest rate rises and so on , or is that all your worried about . screwing down the average family

ABS - ABC Learning Centres

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