CDR - Commander Communications

[brilliantmichael]

Hi BrilliantMichael,

we don't use them for telecomm services (as we use Optus to trunk calls & mobiles), however use them for hardware purchases (Ipex PCs, HP Printers, Hitachi SANs, Cisco gear), software purchases (Microsoft Agreements, Macromedia & Adobe) & various services (some development work in the Microsoft Server area, etc.)...

Their staff did seem to think the first profit warning was due to system integration (which was also released to the ASX) & orders were unable to be fulfilled/billed/etc... We didn't notice any of this as we were Volante customers & moved over to Commander due to the take-over...

Other colleagues use them to buy many other brands of hardware such as Acer, HP, etc... I must say they do also have many large gov't contracts in place for hardware (their Ipex branded PCs) & you may even notice them on TV during the "Border Security" show, as Customs use Ipex PCs...

My gut feeling is that the market is over-reacting...

Cheers,

MannyB.

OK so they're like a 'one stop shop' for business IT hardware. Thanks for the info MannyB! You can also see the majority of their revenue is from goods sales as opposed to services. Guess this is why their margins are pretty low (lower to mid single digits) like the retailers. So do they have any competitors? e.g. Telstra?

 

[MannyB]

Well in the voice front (Voice Over IP - VoIP), they do have some competitors in the integration front (from companies such as Dimension Data, Netstar, etc.), but due to their high level of expertise there along with PABX experience, they can hold their own in this area... In the PC & other hardware sales front (selling to Corporate, Gov't & Education), although they are getting good sales, their margins are shrinking due to the high competition from smaller players & even white-box (clone) PC manufacturers... Clone manufacturers are struggling due to expensive labour costs when building PCs in Australia, so many are shutting shop, which helps companies such as Commander who deal with MANY/most vendors such as HP, Lenovo, Acer, Ipex (their own white box), Toshiba, IBM (servers), Lexmark, etc... They will always have mid-size competitors such as Leading Solutions, Fujitsu, etc., however due to their size, can often get better pricing from large manufacturers & pass on the savings to customers (such as us)... Their size helps though, as they can be used as a one stop shop for all IT needs (from voice, PCs, Servers, SANs, Backups, Switches/Routers, managed services, etc.)

Cheers,

MannyB.

 

[sigmadelta]

Hi all.

Today's was the biggest one day volume that Commander has had. It smells like a capitulation to me. It is interesting to note that the clearout of the funds' holdings have found support among buyers, otherwise it would be down by a lot more than 14% today.

I'm viewing this as a trading opportunity, in at 47c, which values the company at around A$100m. Someone has to be interested in the business at this price.

 

[sigmadelta]

Let me reiterate, as there has been a significant number of sellers (real sellers, not short), there has been a buyer to match the trade. As some of the buys are automated I think there is a good chance we have a single large buyer who must very soon have to reveal their holdings according to the ASX rules.

 

[ROE]

Hi ROE,

Looks like we think alike I snatched up some RHG when they did drop as well... I personally think they will do well as a longer term hold (which is how I invest, as I'm not a trader)...

Note: it doesn't hurt to go against the tide from time to time...

Cheers,

MannyB.

I off load all RHG at 1.195 because it was above the value I was comfortable with and sub prime debt is not yet out of the wood..will buy it again if it drop to 70 cents look like it may get there

 

[greenfs]

Anyone who reads charts (see above) will know that this is now a basket case to be avoided at all costs for the time being.

Personally, I am very greatful that I did not follow Commsec's buy recommendation at $1.70+.

 

[sigmadelta]

Hello greenfs,

You made the statement "the news is bad when the large institutional investors are sending in notices advising that they are ceasing to be substantial holders.".

These guys _have_ to reduce their holdings because the price has fallen below the threshold cap. You can say it has fallen because of some bad news. A plausible view is the institutional selling is a knock on effect which gives the price a bigger hit than it would have done otherwise. The chart looks terrible but we bounced on very high volume today.

 

[brilliantmichael]

How do we know when it's the bottom? Apparently PPT still has a substantial stake left (around 8%)??

You're right about the buyers scooping it up from below. It seems there's always a huge depth ready to catch the sales. I doubt they'd be retail investors.

 

[greenfs]

Fair enough. Let me know when we are at bottom and/or when we have an industry competitor with 5% holding. In the meantime, I will keep watching with an interest from the sidelines.

 

[sigmadelta]

The intraday chart is worth looking at. It trickled down to 44c, then bounced on volume at 3.35pm. Started heading south again with 9 minutes to go, then bounced again just before the close. I don't for a minute believe the sellers have finished yet, but there looks to be some strong support above 45c.

 

[reece55]

Hello greenfs,

You made the statement "the news is bad when the large institutional investors are sending in notices advising that they are ceasing to be substantial holders.".

These guys _have_ to reduce their holdings because the price has fallen below the threshold cap. You can say it has fallen because of some bad news. A plausible view is the institutional selling is a knock on effect which gives the price a bigger hit than it would have done otherwise. The chart looks terrible but we bounced on very high volume today.

Sigma
Think as though you are the fund manager - would you fire sell your stake in a Company knowing full well you are going to depress the share price drastically unless you had a good reason? My opinion is a big no! I don't know what's wrong with the exception of what has already been disclosed, but clearly there is more bad news to come. I don't really see a bounce here, we have a dark red candle with a slight tail - it just indicates distribution to me.

Picking bottoms is a poor mans game - clearly I think the best strategy in CDR is to stay well away unless considering a short position.

Cheers

 

[sigmadelta]

Hi reece,

I were a fund manager, I would be trying to look after my job. Buying a ASX200 share that posts regular dividends would usually be a safe move. When there are no dividends and the share leaves the index means I look for another one, presumably safer. As staying in might be a career threatening move.

Not to say that this company doesn't have big problems to sort out, but I don't think it necessarily follows from fund managers' reluctance that the problems need be terminal.

 

[adamwu]

From this morning's ann, AMP finished getting off at 10/09, and PPT finished getting off at 11/09. But yesterday's vol is 34.5m, so who else is selling?

 

[ROE]

From this morning's ann, AMP finished getting off at 10/09, and PPT finished getting off at 11/09. But yesterday's vol is 34.5m, so who else is selling?

All come down to are you game enough to go against the herd
when people jump ship and all hell broke lose and everyone is shouting
get out get out .. what would you do ? stand with your own conviction or follow the herd

 

[sigmadelta]

Strength today. The market has smelt the blood of these two funds and is taking what it can from these forced sales.

 

[MannyB]

Hi ROE,

In terms of RAMS, I suspect with the share price weakness, I wouldn't be surprised if one of the BIG4 banks is slowly accumulating shares, as one of the ladies I know that owns a Rams Franchise outlet, she had indicated that NAB had offered around $750 for RAMS before it floated, however was knocked back by the RAMS board/owners at the time... So I wouldn't be surprised if someone like NAB picks them up for a bargain (far less than what they had offered some time ago)...

Cheers,

Manny.

 

[ROE]

Lateline business has CDR on its program last night if anyone hold this
and want some view on it
you can get it via vodcast at www.abc.net.au/latelinebusiness

 

[sigmadelta]

The main sellers are out, technicals suggest we are set up for a bounce, no impending news expected, and Huntley's have just put out a speculative buy: target $1.25.

 

[Miner]

Yes I saw it and see an opportunity with CDR.
However Huntley has lost its gloss to some extent. It recommended SIP one day to buy and next day on releasing report, reverted back to hold. So there is no intelligent analysis like many good companies. I understand it is difficult with less staff and so many things are happening.
I would personally wait CDR to get some resistance from free fall before committing on it.
Disclaimer: This is my own opinion, I am not an investment expert and DO not hold CDR.

 

[ROE]

USB just got on board with 5.10% things are looking up ..
is someone lurking to build a large enough stake to take this baby under their arm?