DDR - Dicker Data

[peter2]

One of the few companies who's share price has made new all time highs after the COVID selloff. For me, this indicates strong insto support. There was some selling at the new high and I'm interested to see if there's more selling when price closes above 8.00 level again.

 

[Dona Ferentes]

One of the few companies who's share price has made new all time highs after the COVID selloff. For me, this indicates strong insto support. There was some selling at the new high and I'm interested to see if there's more selling when price closes above 8.00 level again.

30% free float is going to accentuate moves. Tightly held.

 

[Klogg]

30% free float is going to accentuate moves. Tightly held.

Have held this from 2013.

David Dicker is easily in the top 3 CEOs of the ASX.

 

[galumay]

As you know I have held for a similar time, I sold down another parcel recently at $8.40 to reduce the size of my position again, may well end up regretting it! I moved some capital into EMB at $10 so we will see how it turns out over the long term.

 

[Klogg]

As you know I have held for a similar time, I sold down another parcel recently at $8.40 to reduce the size of my position again, may well end up regretting it! I moved some capital into EMB at $10 so we will see how it turns out over the long term.

Have a listen to this:
https://www.ausbiz.com.au/media/ceo-chat-dicker-data-gets-ready-to-go-global?videoId=2421

I do wish he'd use some equity (20-30% of txn value). But buying out an underperforming distie at 1% PBT margins and bringing them to 4% on basically all debt is a formula for crazy returns.
Worked with Express Data.

 

[peter2]

DDR seems to be testing 8.00 again. This looks like an important level as it's been here before.
I've posted my weekly and daily charts. The weekly chart shows that DDR has been going up faster than the general market (RSC-XNT, top pane). Volume (bottom pane) has subtlety risen while price remains in this range. The volume on the daily chart (bottom pane) is very interesting. All the recent large volume days are green (up days). We know the free float is small so it's hard for insto's to buy all they want quickly without raising their prices. I think some insto's have been nibbling at DDR. Can't wait until the current supply is gone.

 

[Dona Ferentes]

Dicker Data is eyeing growth from helping company's with their return to work strategies over the next six to 12 months as the IT distributor reported a healthy lift in half year profit.

Net profit after tax increased 23.6 per cent to $29.4 million as revenue increased 18.1 per cent to just over $1 billion amid a surge in the number of people working from home and demand for remote and virtual working solutions.

Profit margins of 9.6 per cent were higher than the 9.1 per cent recorded at the same time last year.

Dicker Data says the rollout of 5G connectivity over the coming 12-24 months is going to have a "revolutionary" effect with the industry

 

[galumay]

Market reaction was muted, I guess there was a lot of expectation baked into the current price. I haven't read the report in detail yet so I cant add much. I do doubt the spin about 5G, its the most overhyped thing I have seen in a long time.

 

[Dona Ferentes]

Dicker Data is eyeing growth from helping company's with their return to work strategies over the next six to 12 months as the IT distributor reported a healthy lift in half year profit

and apologise for not correcting the work-experience morning shift for grammatical lapse

 

[peter2]

DDR encounters more supply just above 8.00 again. It must run out soon or be withdrawn. Rising lows are bullish.

If there's a market dip late Sept/Oct it may be the last chance to top up. Once the 8.00 supply is gone price may go straight to 10.00.

 

[galumay]

You may be right, Peter. I sold a parcel at $8.40 to reduce the position a bit, that looked smart for about 3 months! It certainly seems to have some enthusiastic buyers at the moment.

 

[kenny]

DDR has never struck me as a share to trade but rather to accumulate as long as they maintain their strategy both operationally and in terms of dividend payout. I'm glad I finally convinced my better half to collect some too.

 

[peter2]

Another good market update by DDR. There was a little late day selling.

The next days presentation perked the buyers up again. Price is now just below the $10 level.

It's was interesting to see that DDR is reducing the impact of their well established top 5 vendors. It was also interesting to see that they've expanded their warehouse capacity by 80%. The "just in time" supply chain has been significantly impaired by the COVID pandemic.

 

[peter2]

If there's a market dip late Sept/Oct it may be the last chance to top up. Once the 8.00 supply is gone price may go straight to 10.00.

I was partly correct, price did get to 10 then traded sideways before rallying to high at 12.60. Since then price has drifted down in a choppy corrective move. When I say corrective it means messy. Price went down to 9.00 and then rallied strongly to 11.80. This rally looks like a 3 wave abc correction and the current swing could be wave b of a much larger abc correction. If this analysis works out then price should flop down to 8.00 fairly quickly. This would complete the large corrective pattern and then price should rally up to new all time highs although this will take some time.

My question, if you followed all that, Is DDR in a larger term abc correction? Or is price headed higher to the recent ath (12.60)?

The price chart is so sloppy because the daily traded volume is only ~200K/day. If I don't know what the chart indicates then it's probably a good idea to go to another company chart. Discussion only as I don't have a definitive outlook on this chart.

 

[galumay]

@peter2 I imagine the tight registry influences how DDR trades, still 80% held by the top 20 so only 20% free float and the Dickers still hold 66% between them.

 

[galumay]

Significant acquisition for $DDR, buying Exeed for $68m in an all cash deal. 4.5x EBITDA looks a pretty good deal.

 

[peter2]

The market likes it and a few of us here at ASF like it also .
DDR was a newly acquired position in the P2 combo portfolio.

 

[wabullfrog]

Shorters of DDR may be feeling some pain today. It's about 3% according to Shortman, I'd attach an image but ASF doesn't like it for some reason.

 

[Dona Ferentes]

a different style :

Chairman and CEO, David Dicker, Dicker Data Limited said, After many attempts, over more years than I can count, we have finally got a deal done to acquire Exeed. This transaction will put us a very strong number 2 in NZ, with a platform for number 1. The combined companies are highly synergistic. The deal done will be all cash. A very satisfying outcome.

 

[galumay]

The Dickers still hold over 60% so I assume they have done their due diligence and the acquisition will prove successful. They have a pretty good record, Express Online was a pivotal one for them.