ABS - ABC Learning Centres

[Rainmaker2000]

Surely Eddie is not picking shares up on margin surely......I wonder who would be offering lvr on ABS to Eddie.........since its already got the hefty gearing ratio and add another 40%-60% lvr to that for margin....I find this very difficult to believe a lender would be that silly.......since I doubt Eddie has a diversified portfolio, it would be just a house of cards.....very similar to my unsuccessful tilts at stock investment in the game RailRoad tycoon....but I digress

 

[mrgroundwork]

rainmaker - it is not out of the realms of possibility that eddie wanted to diversify away from just ABS, decided he would use his equity in those shares to buy something else... i dare say heaps of lenders would have been happy to arrange this kind of facility last year...

reece - i would like to hear more about the poor fundamentals..

 

[Junior]

Wow, can't believe where this stock has gone since I posted this message.... Even I thought it would find support at $4, and I have been a big bear on this stock for ages.....

I think we were at about $7 bucks when I said this...... This stock is a pure example of when the going gets tough, those with poor fundamental records and positions will be hammered....

I say to anyone who says the following:

* But Lazard keep increasing their holding;
* It pays a nice dividend;
* But childcare is recession proof; and
* But look how low the price is -

LOOK AT THE CHART....... The answer is already there, even if you don't believe Dhukka and myself when we say the funnymentals are knackered.... Picking bottoms is a poor mans game and ABC Learning Centres is in the mother of all downtrends... You might get a bounce, but this stock has a lot of repair work to do before we get back to $7.00......

Cheers

What about long term fundamentals? Might be a decent value stock to file away in the SMSF for 10 years.

 

[ROE]

Lazard Asset Management apparently has a lot of faith on this company, increasing its position and has been filing substantial holder notice from $7 down to $4.

LAM recognized the value of Flight Centre and sticked with it even when its share was in down trend from $16 to $9, and when Graham Turner along with the private equity tried to pick up the company on cheapo for $17, it defeated the scheme of arrangement for the $1.6 billion private equity bid for Flight Centre. Flight Centre has since hit $32 and now is sitting around $26.

I am sticking with ABC for now by following LAM's action, until proven otherwise of their substantial holding notice.

FLT is a far better business than this dog and I did buy FLT at $10 or so ..for a start it doesn't have much debt. Two it cost very little for FLT (a few computers and a few staffs) to set up a shop and immediately get a high ROE.. the more shop they open and have customers walk through the door the more cash they make...that why u see FLT in every street corner.

How much does it cost ABS to open a child care centre? and looking at their ROE I said this is a dog business .. I haven't seen anything business that has such a low ROE.

Uncle Warren famous word

"Time is the friend of the wonderful business. It's the enemy of the lousy business. If you're in a lousy business for a long time, you're going to get a lousy result, even if you buy it cheap. If you're in a wonderful business for a long time, even if you pay a little too much going in, you're going to get a wonderful result if you stay in a long time"

and my take if you buy a wonderful business for cheap you going to get extra-ordinary return like FLT

 

[reece55]

What about long term fundamentals? Might be a decent value stock to file away in the SMSF for 10 years.

All depends on your time frame, but then again, why would you waste the capital when you can stick it else where? Looks like they overpaid for their expansion in the US at the wrong time and now they are heavy with a whole pile of debt to service their intangibles. I personally don't put ABS in the value stock pile, at the moment I would say it is appropriately priced.

The half results were lodged right at the close - never a good sign!!! Have a look through, not exactly a good result. Divy maintained at 8 cents, but EPS down 51% and high finance costs associated with expansion.... I will have a better look tonight and explore...

Cheers

 

[grace]

We used to own a Child Care Centre. Sold out for personal reasons.

Eddie would turn up at our child care conferences with such arrogance and sware all the way through his presentations. I disliked the man from that point on.

One thing, if ABC does go broke, there are going to be some well discounted child care centres come onto the market. It will be like the Centro debacle. I might be able to buy one back at half the normal price!

 

[Rainmaker2000]

I broadly concur with the points above, especially like Warren B quote..........I'm not totally convinced ABS is a business with poor economics......I just think that those in charge of the company have no idea about shareholder value.....there is no attempt at all to fund growth with cashflows for example.......it just looks like empire building

Its all just one big debt/equity fest.....ABS should own a stock broking house....for example, there is $6.4 million of costs just for a share purchase plan....that would buy a certain ailing stock broker I know...

Juries still out.....lots of one offs and wasted past shareholder money on 'one-offs'........I don't know how one is meant to understand a business whose EPS is down 50% in a half and then we are told, "Don't worry, its just the change of seasons"

It's pretty much just Reverand Eddie and the former Lord Mayor of Brisbane telling everybody to keep the faith, you'll get your 15% EPS........there's no certainty that won't happen but I do know that's one ugly income statement and one uglier balance sheet.....with all that leverage, they would do well just to predict whether ABS will make a profit or loss

 

[reece55]

And what do you know, down she goes......

ABS opens at 2.05 today, looks like the market just doesn't believe the fantasy that they will be able to maintain 15% EPS growth after a killer half year....

People have to change their mentality at the moment, or your going to lose a lot of money... This is a bear market and stocks with high debt and poor fundamentals will be hit....

My condolences for anyone who is left holding this crappy piece of paper, but it's not like I didn't warn everyone... again and again and again....

Cheers

 

[dhukka]

And what do you know, down she goes......

ABS opens at 2.05 today, looks like the market just doesn't believe the fantasy that they will be able to maintain 15% EPS growth after a killer half year....

People have to change their mentality at the moment, or your going to lose a lot of money... This is a bear market and stocks with high debt and poor fundamentals will be hit....

My condolences for anyone who is left holding this crappy piece of paper, but it's not like I didn't warn everyone... again and again and again....

Cheers

Yep, if you bought this, you got what you paid for, a crappy business producing crappy returns, currently $1.35, ouch !

 

[Junior]

What about long term fundamentals? Might be a decent value stock to file away in the SMSF for 10 years.

Dang. I retract my earlier statement, could be the next AFG....I wonder if any of the debt facilities have a condition relating to market cap.

 

[YOUNG_TRADER]

Jumping Jimminey Batman looks like there's some real trouble over here,


I heard a rumour it had something to do with hedge fund manipulation and stop losses, including the MD who had a very large geared postion in the company who is being stopped out today

Heard the same thing on AFG

Seems really dodgey to me

 

[UMike]

Whats with the Trading halt.

It's been trading for an hour and on the rise before the halt.
It's not like a reverse speeding fine or anything.

 

[3 veiws of a secret]

Interesting as soon as purchase a few the share shot upfrom $1.29 to $1,45 in seconds somebody has faith in this share ,but I agree very speculative trading going on today ...I'm in with the wolves till I make a few quid !

 

[josjes]

Interesting as soon as purchase a few the share shot upfrom $1.29 to $1,45 in seconds somebody has faith in this share ,but I agree very speculative trading going on today ...I'm in with the wolves till I make a few quid !

Singapore Temasek Holdings has 12% of ABC back when the shares was $7.20 in June.
Just a speculation, they may still have faith with the underlying business.

 

[Bolivia]

Value was obviusly not there at circa $4.00 - but has the stock been oversold here?

They have confirmed no covenants on their debt relating to market cap.

They must be hugely relieved to have refinanced. What does everyone see as the main problem ABS faces? Sure they paid too much for the assets in the USA but are these concerns already factored in to this sell off. This sort of fall seems very much margin related.

Probably another day of margin selling to go. Mr Groves might be included in that.

Brave to go in today IMHO.

 

[3 veiws of a secret]

Brave to go in today IMHO.

True if your looking at term.......in my case I go in and out like Flynn....unlike Groves.

 

[Miner]

ABC Learning moves to calm investors
Posted 46 minutes ago
26 FEBRUARY 08 (EXTRACTED FROM ABC NEWS POSTED IN ABC WEBSITE) 1.16 PM WST

Childcare operator ABC Learning Centres is trying to allay investor fears after a share plunge today.

Today its shares opened at a six-year low, and have lost as much as 70 per cent.

The company released half-year profits yesterday that were well below expectations, but there was no major movement in the stock.

Today the company's shares are changing hands at a frenetic pace as brokers buy and sell for around $1.90 at about 1:30pm AEDT, which is a 50 per cent fall on this morning's opening price.

Over 100 million shares in the company have changed hands so far on the Australian Stock Exchange and some analysts are questioning the future viability of the business.

ABC Learning has issued a statement to the stock exchange in response to market speculation, saying the company is trading profitably.

 

[josjes]

As at 03:19 pm today:

951 buyers for 7,227,870 units 343 sellers for 2,035,031 units at $2.12 now.

I think it is starting to find bottom. Strong support at $2 and above.
What a scary ride, was $1.15 low this morning. I nearly lose my cool today, and just a second away from hitting the selling button, but that emergency ASX announcement save my day.

 

[ROE]

Big drop in profit and no market update leading to the announcement?
Surely they know something as big as 50% drop in the profit.

 

[Real1ty]

The company released half-year profits yesterday that were well below expectations, but there was no major movement in the stock.

LOL, I would say there is a very good reason behind the shares having no major movement yesterday.

They released the results after the market close.....