ABS - ABC Learning Centres

[investorelse]

However you look at it,the white shoe brigade have been sent a clear message if you are a paper tiger you are fair game,whatever way has been
employed to flushout the margin calls it now shows all punters the extent of
how debt has been used to build empires on everyone else's money.its a big
wake up call for these types of companies,rest assured trendsetters there will be more they are still at the A's...ABC,AFG,AED?,next up BNB...

Just when Im about to give up on this site...

Hi Tigerboi,

Can you expand some more on this?

Why did the ASX or the Company not trigger quickly on the day?
There must have been so many alarms going off on the day?
How could they have both been asleep at the wheel on this event?

 

[Rainmaker2000]

I go off camping for the weekend and wallah, this thread continues to deliver nuggets of gold......

Apparently, I and other asf members are on an ignore list from a certain learned threader who keeps contributing sound bites to the thread even though he has urged admin to close the thread as its apparently of little utility........I can only assume a thread praising Eddie and ABS's contribution to shareholder value would be more useful.

Just to illustrate the utility of this thread.......look back the weeks and you'll find a mum and dad investor who was an ABS owner round $6 from memory.......he was seeking guidance from the many learned threaders.....many threaders chipped in with myself giving ABS more benefit of doubt than most, ironically.....bottom line: that mum and dad investor I think realised that ABS pretty much did not suit his risk profile and sold.....I'm pretty sure that investor may have though the thread worthwhile long before the price hit $1.15....

 

[chops_a_must]

Wow chops 28K? double it and you will be closer for a centre director.
Worksafe? I dont know? you asked them yourself yet? You have a duty of care! if you know something, you know! please tells us all Im sure you have some details. (not really)
Poverty line? in WA? LOL.
Not privileged just observing.
Oh well, Looks like another one to add to list...
Chops, I can see why you have racked up 2000 posts, if you have nothing relevent to say don't post.

You know that is not true.

I just so happen to live with a worksafe investigator who just happened to audit and investigate ABC centres last year.

And I'd say what he said about ABC and their management and structure was incredibly relevant to the workings of ABC.

Cheers.

P.S. - yeah they have had to pay a bit more for centre managers now, but they still face a huge staff turnover because of ****e conditions and incompetent overhead management.

 

[gstrauss]

Major factors in ABS decline

Hi. I've been attempting to educate myself on the recent decline of ABS. I do not hold any stocks, and am just following out of interest.

Could people let me know if I have everything covered here.
The main factors in its recent tumble are:

1. High levels of debt, and the fear that ABS, like Centro and Allco, will have difficulty refinancing.
2. Purported short selling by hedge funds.
3. Groves had to sell a significant amount of shares due to a margin call (which was intentionally caused by the short selling)

There are clearly other factors which have been involved in its prolonged downward trend, but I'm more interested in the factors that caused its sudden drop.

Please let me know if I've left anything out. I'm new to all of this.

Also, what do people think will happen now? Some people have mentioned that PE will buy the American businesses. Do you think there are any other possible outcomes in terms of if and how ABS would be carved up?

 

[theasxgorilla]

I think that my religious upbringing has clouded my view on shares like this one.
I see it as not quite right to make money from child care,nursing homes etc.
Perhaps I am not modern enough!

Oh you should move to Sweden. Public child care and nursing homes are the norm, and until recently it was obligatory to pay a portion of your wage in tax to the Swedish Church. If I'm not mistaken I believe it's still implied that you want to do this, so unless you write to them and tell them to stop paying it for you, you will end up paying it anyway!

 

[theasxgorilla]

I don't think one needs just a religious viewpoint to have a dim view of mass childcare........some of the stories I hear and the science conducted on kids who have intensive exposure to child care centres......well, child care has a dollar value and then there is the rest of it...what is the price of mental illness imposed in the most impressionable years.......we will see the dollar value of that in future years...It's a lot simpler just focusing on good stocks.............

Making throw-away comments about childcare and mental health is kinda pathetic, to put it lightly. It's completely normal in Sweden to send kids to childcare while both parents work. I repeat, completely NORMAL. I'd hardly call the society dysfunctional. Since we're a tribal species by nature it stands to reason for me that children are mixed into the greater society sooner rather than later...that would make for more function human beings IMO.

 

[Freeballinginawetsuit]

Since we're a tribal species by nature it stands to reason for me that children are mixed into the greater society sooner rather than later...IMO.

Our kids spend ample time mixing with there peers.........12 years of schooling, a couple of years in kindy/pre school..........thats plenty of 'mixing time' IMO .

You have to wonder why some even have kids in the first place if they havent the means/time to raise and promote the values of kin raised in a nuclear family.

 

[Rainmaker2000]

Thanks for the Swedish experience Gorilla......I don't believe the science conducted on kids who have intensive exposure to child care centres is 'throw away' and its currently an active area of exploration.........Your use of the word 'normal' and 'dysfunctional' is interesting, especially in the context of your reference to humans being 'tribal by nature'.....

I must concede, I'm a big fan of the inclusiveness of public policy in that part of the world.....maybe they do really great childcare......I'd love to know......what I do know is that the Austrialian trend away from Community based childcare to corporate based does not appear to be quality driven....

 

[investorelse]

Re: Major factors in ABS decline

Hi. I've been attempting to educate myself on the recent decline of ABS. I do not hold any stocks, and am just following out of interest.

Could people let me know if I have everything covered here.
The main factors in its recent tumble are:

1. High levels of debt, and the fear that ABS, like Centro and Allco, will have difficulty refinancing.
2. Purported short selling by hedge funds.
3. Groves had to sell a significant amount of shares due to a margin call (which was intentionally caused by the short selling)

There are clearly other factors which have been involved in its prolonged downward trend, but I'm more interested in the factors that caused its sudden drop.

Please let me know if I've left anything out. I'm new to all of this.

Also, what do people think will happen now? Some people have mentioned that PE will buy the American businesses. Do you think there are any other possible outcomes in terms of if and how ABS would be carved up?

Talk about hitting the nail on the head.

The "event" itself is certainly the only point interest surrounding this stock.
and yes what will be some likely outcomes?
Gotta be someone around here who has knowledge of this?

 

[MRC & Co]

Re: Major factors in ABS decline

Hi. I've been attempting to educate myself on the recent decline of ABS. I do not hold any stocks, and am just following out of interest.

Could people let me know if I have everything covered here.
The main factors in its recent tumble are:

1. High levels of debt, and the fear that ABS, like Centro and Allco, will have difficulty refinancing.
2. Purported short selling by hedge funds.
3. Groves had to sell a significant amount of shares due to a margin call (which was intentionally caused by the short selling)

Yes, you have it covered!

Groves got burnt after publically challenging the hedge funds (BAD MISTAKE), hopefully he will now have to sell some of his luxury goods and get down to the real nity gritty of the business!

When is this trading halt going to end?

Could we see a short-term price bounce as the shorts close out?

 

[ROE]

I think Groves is arrogant and he thinks everyone is an idiot..the day the stock drop to $1 ish ...that night he came out saying he have a margin account, but his margin call price is way way low and current price doesn't trigger a margin call.....

If you are in a stock market you know he got margin call because margin usually based on around 30% to 50% of the share price movement...sometimes it even less than this figure.

When it drop 70% you don't have a margin call problems?

 

[MRC & Co]

I think Groves is arrogant and he thinks everyone is an idiot..the day the stock drop to $1 ish ...that night he came out saying he have a margin account, but his margin call price is way way low and current price doesn't trigger a margin call.....

I thought Groves came out beforehand and told the hedge funds they couldnt get him!

I then thought his margin call came before it hit its low.

Thats the debate and that will be the inquiry. Did the banks force him to sell? Or did he use his insider information to sell before it hit its low?

 

[ROE]

I thought Groves came out beforehand and told the hedge funds they couldnt get him!

I then thought his margin call came before it hit its low.

Thats the debate and that will be the inquiry. Did the banks force him to sell? Or did he use his insider information to sell before it hit its low?

no I think he got called on the day, he and his wife got around 1.8 ish per share for their margin call stocks.
just may as well they are on trading halt otherwise could be blood bath in a day like today

 

[bunyip]

Those who have even a basic knowledge of trends and chart reading will know that ABS has been in a downtrend since about the $7 mark. Anyone who adopts a HAH (hold and hope) attitude towards downtrending stocks is just begging to get severely mauled. We saw it in stocks like HIH, PAS, SGW, and many others......real life disaster stories that severely burnt folks who held them without any thought of risk control.

 

[Prospector]

Those who have even a basic knowledge of trends and chart reading will know that ABS has been in a downtrend since about the $7 mark. Anyone who adopts a HAH (hold and hope) attitude towards downtrending stocks is just begging to get severely mauled.

That is very true, the trouble I have at the moment is that the overall market fall since Christmas is really messing up the trends for everything (except for a couple of miners) Should we sell everything?

 

[chilliaa]

That is very true, the trouble I have at the moment is that the overall market fall since Christmas is really messing up the trends for everything (except for a couple of miners) Should we sell everything?

Spot on prospector, when the market goes into panic selling, charts wont distinguish 'good' companies from bad.
I strongly suggest turning off market noise. Make up your own mind the value of a share and then just selectively buy.
For myself i look at earnings trend. So long as long term earnings are going up who cares what the market is doing, (apart from giving you some excellent entry points from other peoples panic)

 

[chilliaa]

Those that have the courage to invest smartly now, could set themselves up very nicely for the rest of their lives.
Think about it, there are alot of companies that are paying close to 10%gross ylds. Ok the next couple of years maybe hard, but looking past that certain industries are nearly guaranteed to be earning more in say 5yrs time than now.
If you can pick up companies with 10%ylds now, what will they be in 5 yrs time, 15%?, 20%
On $500k that would pretty much substitute the need to work.

 

[bunyip]

That is very true, the trouble I have at the moment is that the overall market fall since Christmas is really messing up the trends for everything (except for a couple of miners) Should we sell everything?

It's not for me to say.....guess you'll just have to make up your own mind in that area, Prospector.

 

[MRC & Co]

Those who have even a basic knowledge of trends and chart reading will know that ABS has been in a downtrend since about the $7 mark. Anyone who adopts a HAH (hold and hope) attitude towards downtrending stocks is just begging to get severely mauled. We saw it in stocks like HIH, PAS, SGW, and many others......real life disaster stories that severely burnt folks who held them without any thought of risk control.

This is one thing I learnt the hard way when I started out.

A company became "good value" based on my equations, so I bought. However, it was still on a downtrend (I bought in as it was now good value, correct fundamentally right?), but the downtrend continued until people came to their senses.

I could have bought the stock a LOT lower, if I just used T/A to time my entry and still got my cheap, fundamentally sound company.

I think looking at either F/A or T/A without ANY use of the other, is truly ignorant. Only those using T/A with tight stops and robust, down-pat strategies could possibly get away with only using T/A!

But I just dont get why those F/A investors dont use T/A to time things. Either newbies, or stuck in their ways and lucky they have been living in bull-market times! Maybe sentiments regarding the use of each method will be re-evaluated now that we have hit turbulent times.

Sorry, off topic.

 

[chilliaa]

This is one thing I learnt the hard way when I started out.

A company became "good value" based on my equations, so I bought. However, it was still on a downtrend (I bought in as it was now good value, correct fundamentally right?), but the downtrend continued until people came to their senses.

I could have bought the stock a LOT lower, if I just used T/A to time my entry and still got my cheap, fundamentally sound company.

I think looking at either F/A or T/A without ANY use of the other, is truly ignorant. Only those using T/A with tight stops and robust, down-pat strategies could possibly get away with only using T/A!

But I just dont get why those F/A investors dont use T/A to time things. Either newbies, or stuck in their ways and lucky they have been living in bull-market times! Maybe sentiments regarding the use of each method will be re-evaluated now that we have hit turbulent times.

Sorry, off topic.

For true long term fundamental investing, there are two issues
1) buying the right company
2) buying at the right price.
Many people confuse fundamental investing with just buying a company cause its price has gone down. The most important criteria is to make sure that the company itself is 'good'. This maximises the chance of preserving your capital.
The second is the buy in price and this will determine your rate of return.