DEX - Dexion Limited

[Buffettology]

Cant find a thread about this, so I thought I would start it.

Have any of you guys looked at this stock? It has been experiencing very soild growth, looks a stable long-run company and its price just keeps falling.

On my current valuations, I have the company quiet undervalued.

Amaizing there is no talk of this company whatsoever.

 

[Rainmaker2000]

It does not seem way undervalued for a small company in a capital intensive business..like I have a small manufacturer share which has a forward PE of less than 2.9X...but then I remember looking at this say, 18 months ago when it was about $1.70 and thought it was reasonable value but then it fell off my watchlist cause its price surged........can you sum up its company performance for last year and why the decline?......it does look like a decent business although it makes many acquisitions

 

[Buffettology]

Dont have time to post much, so Ill make this quick:

This company trades on a calendar year, so its annual report has not been released yet. NPAT up nearly 30% for first half of 2007 with growth in most areas.

Look at expected EPS, strong growth expectation, its ROE is also very good which is extremelly risky.

I would call the risk profile on this one average. Small company in capital intensive business, however, good operating cash flows and not a risky product.

Its current p/e is good, for an average risk company with strong growth potential. Undervalued. Not to mention, it appears a few investment firms agree, with 4 Strong Buy recommendations, 1 Buy and 1 Hold. Though, I dont take much notice of recommendations, I do enjoy when I see these firms have it similar to me.

Why the recent decline, no logical answer, its just not a stock the public like at this moment. Once the bandwagon starts rolling again, Im sure quiet a few will jump on!

 

[MRC & Co]

Up over 10% today.



Good to see some fundamentals come out and change a rediculous downtrend of which had no explanation! The market was acting like this one was the next Boom Logistics!

 

[MRC & Co]

Up over 10% today.



Good to see some fundamentals come out and change a rediculous downtrend of which had no explanation! The market was acting like this one was the next Boom Logistics!

Nobody else is on board this baby?

It jumped up on very strong volume and in comparison to recent times, is still on good volume! This run was obviously going to continue after its first bounce, surprised nobody got on board..........still might be some legs to run on this one yet!

 

[basilio]

I've been wondering about the sharp continuing fall of Dexion. It's dropped to $1.00 from $1.70 plus earlier this year and there seems no good reason for falling so far. Any thoughts out there or has it just being oversold in a falling market ?

 

[chilliaa]

I've been wondering about the sharp continuing fall of Dexion. It's dropped to $1.00 from $1.70 plus earlier this year and there seems no good reason for falling so far. Any thoughts out there or has it just being oversold in a falling market ?

Yeah two reasons:
1) end of yr tax loss selling
2) its market cap is now to small to be taken up by institutional investors.

Ive bought $10k of it in July.

 

[michael_selway]

Dont have time to post much, so Ill make this quick:

This company trades on a calendar year, so its annual report has not been released yet. NPAT up nearly 30% for first half of 2007 with growth in most areas.

Look at expected EPS, strong growth expectation, its ROE is also very good which is extremelly risky.

I would call the risk profile on this one average. Small company in capital intensive business, however, good operating cash flows and not a risky product.

Its current p/e is good, for an average risk company with strong growth potential. Undervalued. Not to mention, it appears a few investment firms agree, with 4 Strong Buy recommendations, 1 Buy and 1 Hold. Though, I dont take much notice of recommendations, I do enjoy when I see these firms have it similar to me.

Why the recent decline, no logical answer, its just not a stock the public like at this moment. Once the bandwagon starts rolling again, Im sure quiet a few will jump on!

Hm alot of these stocks have been hit DEX, CXG, FGE, but offer good yields etc

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 17.4 21.5 22.8 23.6
DPS 9.0 10.0 11.0 12.0

Business Description
Dexion Limited (DEX) manufactures and markets a broad range of storage products within Australia and Asia Pacific region. The company comprises two major divisions: industrial storage and commercial storage.


thx

MS

 

[the bard]

"The Age " newspaper here in Melbourne has DEX as a high yielding dividend stock that has been overlooked. The also list AAU, CND, DWS, PBA, REF and WTP as ones to have a look at. Yields are:

AAU 11.6% Div 0.05c
CND 12.8% Div 0.18c
DEX 11.0% Div 0.11c
DWS 13.0% Div 0.12c
PBA 14.2% Div 0.08c
REF 11.7% Div 0.21c
WTP 13.1% Div 0.24c

Cheers

 

[basilio]

So what is happening with Dexion? Within a week it jumps from $1.00 to 1.25. In that time there was an interesting report in The Age which identified its high yield and seemingly sound business. Perhaps that attracts a group of investors who decide it makes good sense

And then it drops like a stone back to $1.02. As far as I can see there have been no announcements from the company. Anyone have ideas?

Cheers

 

[battiwallah]

2008 half year results (12-Aug-08) are revealing:

Profit is down 9.6% but net tangible assets have more than doubled from 13.76 to 33 cents per share. Operating profits were up but were affected by capital expansion and amortisation, abnormal items. Profit forecast for the full year is a healthy $12-13M, up from 2007 ~$11.3M.

Current P/E is about 4.9 for a price of 90 cents.

It is now very attractive. But what is the outlook for the general economy after the events of the last week? That's the question we have to ask. I have to say I am tempted... Debt is high though, the debt to equity ratio is about 1.0.

 

[really]

IMHO

This not representing good value

the management are bad communicators
they haven't advised the market of new PE's and havent even told the market there commercial manger for Australia has resigned.

The current CEO Peter framarkis is over paid at nearly 400 000 dollars with a raft of other board members in the 200 000 mark..

This company market cap is only 53c x 64million shares =33million

it was over $4 a share and capitalised at over 240 million before current management

my 7c minig company keeps me better informed.

even PPT and commeonwealth have so far taken a major bath on this stock.

 

[basilio]

What a relatively pleasant surprise.

Financial results to Dec 2008 show a 15% drop in profits from 2007. Dividend of 4c a share in march well covered by earnings.

Certainly an appropriate comment about the uncertainty of future earnings but given the mayhem in the rest of the market the overall result was almost a sigh of relief.

And the shares bounced up 13 cents AFTER the announcement.

 

[mr. jeff]

Hello everyone who has commented on Dexion.
Has anyone been looking at arbitrage on this stock since previous discussion and the GUD takeover bid being submitted at 80cps?
I have seen some enthusiasm but wonder if there are any surprises to be had on due diligence process etc. as I see that the DEX shares sit at $0.69.
Perhaps I am missing the elephant in the room?

 

[mr. jeff]

I guess this thread shall now be closed with GUD making its announcement wednesday, seems to be a foregone conclusion. : )
that arbitrage was an easy thing!

 

[skc]

I guess this thread shall now be closed with GUD making its announcement wednesday, seems to be a foregone conclusion. : )
that arbitrage was an easy thing!

Well done.

If you got in a 69c and get to sell at 80c, that's 11c profit (which btw is about the max profit you will get). If the deals fall through the sp was 40c before, so potential loss could be 25c.

On that you want the probability of the deal going ahead to be at least 70%.

At the current market price of 76.5c, the equation changes to ~75%.

With the benefit of hindsight of course it worked well, but did you have any information or fundamental research to suggest that 70%-75% was realistic?

 

[mr. jeff]

Well done.

If you got in a 69c and get to sell at 80c, that's 11c profit (which btw is about the max profit you will get). If the deals fall through the sp was 40c before, so potential loss could be 25c.

On that you want the probability of the deal going ahead to be at least 70%.

At the current market price of 76.5c, the equation changes to ~75%.

With the benefit of hindsight of course it worked well, but did you have any information or fundamental research to suggest that 70%-75% was realistic?

Hi skc,
in hindsight probably not the most risk-free assumptions were made by myself. I looked because DEX mgmt was open to the bid and it was well progressed by the time I was assessing it. It was also clear that GUD was pushing on takeovers after breville. I was hoping that the share price would jump as soon as due diligence was complete....rather than wait for the paperwork. It seemed much more of a sure thing than most of the other opportunities out there at the time - whatever that means. For the risk, you are right there was not enough investigation, too much speculation.

 

[skc]

Hi skc,
in hindsight probably not the most risk-free assumptions were made by myself. I looked because DEX mgmt was open to the bid and it was well progressed by the time I was assessing it. It was also clear that GUD was pushing on takeovers after breville. I was hoping that the share price would jump as soon as due diligence was complete....rather than wait for the paperwork. It seemed much more of a sure thing than most of the other opportunities out there at the time - whatever that means. For the risk, you are right there was not enough investigation, too much speculation.

I think the failed Breville was very telling, and 70-80% probability of the deal going ahead wasn't that unrealistic.

I am most surprised however that the share price is still only 76c despite the takeover price pitched at 80c. That's a good 6.5% being left on the table