DTL - Data#3 Limited

[craft]

I like it craft
Bit more invested capital this half given the Business Aspect acquisition along with the Wifi Analytics investment, but the result is heading in the right direction. Those dark clouds don't look as scary anymore.

Its weird isn't it, Investing retained earnings during the down part of the cycle, how old fashioned is that? Don't they know the new black is to issue shares take on debt and buy when everything is roses.

 

[Ves]

Would probably need to do some research, but there is one hypothesis, that when the economy really slows down, companies try to streamline their current operations and make them more efficient to cut back all the excesses from the previous cycle. Generally the first to go are jobs. But you cannot cut jobs forever. Next best thing is to fix your asset base.

The worst parts of the old cycle die by the bottom, and the best parts of the next cycle are born there.

DTL is one of those companies that makes technological systems more efficient (and cost effective) for businesses. Would have thought companies like this would see some benefit.

Decisions have been delayed for a few years already across the economy if the commentary coming from IT companies is true. Part of it is the rise of cloud technology, and of course the slower economy has meant lots of their clients adopt a wait and see approach.

You can keep older technology for a while, but you cannot ignore the need to replace it with something better forever.

Too early to tell yet, but obviously some grass roots. Also noticed ASZ is shooting the lights out this year too.

Glad DTL survived my portfolio cull back in Feb.

 

[craft]

Hi Ves

Good to see you still following the stocks.

The worst parts of the old cycle die by the bottom, and the best parts of the next cycle are born there. - Ves

I like that - original? Messes with my concepts of anatomy though.

 

[Ves]

I like that - original? Messes with my concepts of anatomy though.

I think it's a bit of (throw-away) idealism I've scrapped together from the sorts of things they like to write in newspapers and dusty old textbooks.

Who knows... history might even repeat.

 

[McLovin]

I was starting to wonder when the worm would turn. DTL has been a management case study in managing a downturn. Don't sack your staff, and invest in the future.

 

[sinner]

I think it's a bit of (throw-away) idealism I've scrapped together from the sorts of things they like to write in newspapers and dusty old textbooks.

Who knows... history might even repeat.

There is some evidence from the US market that (wish I could find the link) that sectors which bubble and then pop tend to outperform during the next downturn due to the exact process you describe.

A good contemporary example would be SLF vs STW off the 2011 lows. After the horrible post GFC deleveraging in REITs, SLF (54% to date) completely trounced the broad market STW (21% to date).

 

[fanger]

I added to my DTL holdings on Monday, looks like I fluked it. I was going to wait until the end of the week.

 

[ukulele]

Interesting price action early today, it was as if the punters forgot about the div.

Happy to hold this one for the medium to long term. Looks like a good company with no debt and the yield is also pretty good.

 

[rcm617]

Interesting price action early today, it was as if the punters forgot about the div.

Happy to hold this one for the medium to long term. Looks like a good company with no debt and the yield is also pretty good.

Another great day for this stock. Has been steadily rising for the last few weeks. Very solid outlook in the annual report out today. Very good dividend payer.

 

[ukulele]

The markets definitely liked the report today. Volume was also decent which bodes well.

From a technical standpoint this looks like a breakout candidate for sure.

 

[systematic]

I run a lot of screens 'just for fun.' DTL continually pops up on a variety of them lately.

 

[rcm617]

With the banks facing a bit of an uncertain future, probably a lot of people looking at alternatives for good dividend payers. DTL would suit them down to the ground.
Seems to be a bit of a revival in most of the IT service companies.

 

[Boggo]

In my StockDoctor list of about 450 stocks.
A technical entry signal on the weekly chart and I have got it in my SMSF.

(click to expand)

 

[McLovin]

This seems a tad overdone this morning. DTL is weighted about 2/3rds toward the 2nd half. Taking a midpoint of their half year PBT guidance ($6m) gives a number around PBT $17m. After tax you're left with $12m, most of which ends up in shareholder's back-pockets. 15x earnings was hardly a stretch, and didn't seem like it deserved that sell-off. Maybe I missed something?

 

[VSntchr]

This seems a tad overdone this morning. DTL is weighted about 2/3rds toward the 2nd half. Taking a midpoint of their half year PBT guidance ($6m) gives a number around PBT $17m. After tax you're left with $12m, most of which ends up in shareholder's back-pockets. 15x earnings was hardly a stretch, and didn't seem like it deserved that sell-off. Maybe I missed something?

Agree.
Although, my thoughts coming in to the AGM was that any let down would get a bit of a smack given the good run it had since the FY result. But as you say the current multiple was hardly a stretch.

Based on the guidance given at the FY, which I didn't think was overly strong, I estimated $6m PBT...so not much change to the outlook for me.

Maybe the headline growth numbers of the full year brought in a new wave of holders which didn't really understand the business and expected those kind of figures to continue. After all, not everyone can actually read an entire presentation

Also, despite the fall, it is comforting that DTL chooses to inform shareholders of their true feelings on performance rather than treat shareholders as puppets to be marketed to.
It's not inconceivable to me that they could have had the exact same numbers, but used some different wording in that update and we could have seen the share price move higher...

 

[skc]

This seems a tad overdone this morning. DTL is weighted about 2/3rds toward the 2nd half. Taking a midpoint of their half year PBT guidance ($6m) gives a number around PBT $17m. After tax you're left with $12m, most of which ends up in shareholder's back-pockets. 15x earnings was hardly a stretch, and didn't seem like it deserved that sell-off. Maybe I missed something?

Probably so on a one-day basis... The tone of the AGM is not overly bullish but there is no real bad news either. But the stock was trading around this level 2 months ago and not much has actually changed since then. So today's move is large, but it doesn't mean the price yesterday was "correct".

The stock is thin at the best of times and 1m shares traded today is high for this company, but not high relative to the shares outstanding... I have a small trading long but nothing of conviction.

 

[McLovin]

So, evidently yesterday's AGM was a little too bearish. Or the outlook statement was too hard to find.

"Data#3 forecasts continued earnings growth".

http://www.asx.com.au/asxpdf/20151113/pdf/432ynthr25gstd.pdf

The tone of the AGM is not overly bullish but there is no real bad news either.

That was what I thought which is why I struggled to reconcile the SP action to the AGM prezzo. I guess like you say it's a thinly traded company so a bit of hot money that came in after the FY results was looking to get out ASAP.

 

[fanger]

Any thoughts on the report, personally it looked reasonable good?

 

[ukulele]

This stock is so thinly traded!

No one is willing to budge at all today, ex div.

 

[skc]

This stock is so thinly traded!

No one is willing to budge at all today, ex div.

Thinly traded stocks are good for holding as there are less noise... but bad for entry and exit (especially on unexpected negative events).