APX - Appen Limited

[frugal.rock]

Looking like the bottom is in.

 

[frugal.rock]

Nice strong recovery run this morning.
Punched nicely past $11+

 

[finicky]

Reports end of their 2021 fy on Feb 24

Chart looks to be showing real signs of basing here.
Price has moved well outside primary downtrend, volume has dribbled off and is mostly positive. A higher low has been put in. Today it rose +5% but again volume is low. Today not shown on this weekly chart.
I was foolish to take a starter pack in this back at $16 and don't feel like adding now merely on a chart hunch.

To my crude reckoning the low it has made so far @ $8 is only fair value but I am considering only the last two years of poor results. If it returns to its past level of profitability it is worth a lot more.

Weekly

 

[Miner]

APPEN LIMITED APX​

LAST PRICE / TODAY'S CHANGE6.760 -1.811 (-21.121%)VOLUME4,266,779BID / OFFER RANGE$6.750 - $6.770MARKET CAPITALISATION1.05B
Another red wine from APX (the other came from 360) with a complacent CEO (why not to justify his bonus and KPI) and shareholders' reward.
DNH

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02491086-2A1358896?access_token=83ff96335c2d45a094df02a206a39ff4

 

[frugal.rock]

Punching new lows...
Guess the market expected better results?
Didn't seem too bad to me. ?

 

[finicky]

For accounting - just guessing, but maybe some BS detectors are going off. NPAT is down 10.4% to $41m but they feature EBITDA.
They say amortisation of their investment into product development increased. Maybe there has been operating cost disguised as capital investment?
A Charlie Munger quote on the EBITDA metric, "“I think that, every time you see the word EBITDA, you should substitute the words "bull**** earnings.”

Guidance looks negative in the short term but giving an outlook right out to 2026:
"Our long-term focus means we will no longer provide short-term quantitative EBITDA guidance"

Meanwhile I think, expect investment costs to increase and cash conversion from EBITDA to decrease which it did this year, down from 103% to 77% and poor NPAT growth?

Held

 

[frugal.rock]

Had thought it might have been the reference to business in China.
Precovid anything China went gangbusters, now it's the opposite.

 

[So_Cynical]

Appin looks cheap now, i thought the annual report looked ok, MC of about 1 Billion, 50M in cash, 450M annual revenue and zero debt, global market with lots of room for growth, perusing a growth sector. 4 and a half year low, timing is good ~ I'm in for a trade.
~

 

[frugal.rock]

I'm in for a trade.

May I be so bold as to ask your entry price? No obligation to tell, of course.
I paid 6.29, order was in before open today.

 

[So_Cynical]

May I be so bold as to ask your entry price? No obligation to tell, of course.
I paid 6.29, order was in before open today.

I didn't get out of bed till 2pm so i got in late ~ 6.14, doing well today cum dividend as well.

 

[frugal.rock]

Out on 6.91 today.
Satisfied with that (4 cent below day high).
Not worried about a 5.5 cent divvie.
Just dropping this here so I can kick myself in 6 months for not sticking it in the mid to long hold folio. ?

 

[So_Cynical]

Out on 6.91 today.
Satisfied with that (4 cent below day high).
Not worried about a 5.5 cent divvie.
Just dropping this here so I can kick myself in 6 months for not sticking it in the mid to long hold folio. ?

Ill give it a few months, 7 dollars something should be doable.

 

[frugal.rock]

Ill give it a few months, 7 dollars something should be doable.

Didn't think it was going to to take a few months. I'm already kicking myself... don't I feel like a ?

 

[So_Cynical]

Yeah just looked $7.38 ~ i think ill wait a bit longer, new target 7.70.

 

[frugal.rock]

Out on 6.91 today.
Satisfied with that (4 cent below day high).
Not worried about a 5.5 cent divvie.
Just dropping this here so I can kick myself in 6 months for not sticking it in the mid to long hold folio. ?

I get to kick myself today ?
3 months earlier...
Some announcement seems to have pulled it out of consolidation...
Horribly big gap to fill now

 

[Dona Ferentes]

The media preface APX with "Heavily sold-off " but now the company has a bid from Canadian customer experience IT services company Telus International, confirming a $1.2 billion non-binding indicative proposal on Thursday morning. The unsolicited bid is for 100 per cent of the shares, priced at $9.50 per share.

From mid $6 prior, it ran 30% to $8.64 before sliding a bit to $8.20

 

[Dona Ferentes]

The media preface APX with "Heavily sold-off " but now the company has a bid from Canadian customer experience IT services company Telus International, confirming a $1.2 billion non-binding indicative proposal on Thursday morning. The unsolicited bid is for 100 per cent of the shares, priced at $9.50 per share.

and, worthy of some of the more opaque corporate adventurers,

Telus pulls Appen bid with no explanation​

Appen has been left high and dry by its Canadian suitor Telus International, less than 10 hours after the company announced $1.2 billion non-binding indicative bid.

 

[galumay]

Interesting reading back over this thread, its been a steady and long fall from grace - like so many of the businesses in the sector. At one point I had some interest in the business, but it became clear to me its quite likely this business simply wont exist in a few years - its really just a labour hire business and the real AI processes will make it obsolete.

 

[Dona Ferentes]

Interesting reading back over this thread, its been a steady and long fall from grace - like so many of the businesses in the sector. ---its really just a labour hire business and the real AI processes will make it obsolete.

and it's all coming home

... costs in this half are higher primarily due to transformation costs, and investment in product and technology resulting in higher employee expenses, recruitment, and IT costs. Together with lower-than-expected revenue, this has impacted earnings and margins.

Appen reported a staggering 69 per cent fall in underlying EBITDA to just $US8.9 million in the first half, missing analyst estimates by 67 per cent.

down today, some 27%

 

[Dona Ferentes]

Punching new lows...

Those were the good days, froogs

Appen has warned it now expects FY 2022 EBITDA between $US13 million and $US18 million on revenue between $US375 million and $US395 million.

“As noted at the half year, challenging external operating and macro conditions have resulted in weaker digital advertising revenue and a slowdown in spending by some of our major customers. “This has impacted our ad-related programs and had a flow on impact to non-ad related programs and some core programs.”