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DWS - DWS Limited

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DWS half year results just out. Market seems disappointed. Revenue holding up but earnings and profits down. Last trade was at 1.53. Looks tempting around here with a dividend yield of 7% net of franking credits. I do not hold.
 
I took a small position in DWS on 13/2/13 @ $1.59

The outlook for IT still seems soft and a little uncertain, but I think there is a good chance they will maintain their 12c per annum dividend which is a payout of 87% earnings.

They have reduced their headcount to adjust to softer demand but utilization rates of IT consultants was down, especially in 13 Q2.

First Half 13 is the softest first half in four years (in terms of EPS) and the dividend yield is the lowest its been in that time to, but at 7.3% I think it might be a good small holding in the SMSF.

PS: If you read their half year report and the "revenue by sector analysis" pie charts and, like me, you are wondering what 'FMCG' is; 'FMCG' stands for fast moving consumer goods.
 
DWS reported yesterday. EPS was down ~7.5% on the previous financial year (12.74c/share compared to 13.77c/share in FY2012).
 
Interesting to see they have cut enough staff that they are now back to 2008 numbers!
Bit of a different approach to DTL...
 
Yes you would think it would be more difficult to grow revenue and profits when / if the market improves with a lower head count. The other side of the coin is it must be difficult to pay staff when you have no work for them.
 
clinta44 said:
Starting to look like a compelling buy again.
Click to expand...

Hi Clinta,

So at what level are you thinking at buying into the stock, or maybe you already have:confused: Personally I think it has every chance of dropping another 50% yet, so I'll be interested to hear your reasoning.

Don't take this as advice, please do your own research;).

Cheers
PB
 
piggybank said:
Hi Clinta,

So at what level are you thinking at buying into the stock, or maybe you already have:confused: Personally I think it has every chance of dropping another 50% yet, so I'll be interested to hear your reasoning.

Don't take this as advice, please do your own research;).

Cheers
PB
Click to expand...

The reality is I don't know what the SP will do. As far as the company goes, I'm expecting a Net profit of about 15 -15.5 mil this year, or about 11.5 cents per share. with a dividend for the second half probably 4.5 cents.

what I like about the company its pretty consistent with its results.
Average ROE over the last 6 years is just over 30%, Consistently pay out 80-90% of there earnings in dividends (paid out .715 cents in dividends over the last 6 and a bit years. other metrics I measure are pretty good over the six years as well. Return on NTA about 60%. They have only added 1% more shares to there registry in the last six years. I also like there disciplined approach to acquisitions.

As far as the industry goes, I think there is push towards outsourced managed service type agreements (particularly in the government sectors). that push is in its foundation stage at the moment but over the next 2-3 years I believe there will a couple of big managed services contracts announced. (whether or not DWS will be involved will be another story).

Anyway... that's just my thought process at the moment.
 
DWS appointed a new CEO, Lachlan Armstrong, in March 2014. DWS released a market briefing this morning which consists of an interview undertaken by a mob called "Market Eye" with Mr Armstrong. I'm not sure whether the interview conducted really illuminates anything strategy or market outlook of DWS - it just reads as a lot of fluffy stuff without much actual substance.

I don't hold.
 
This stock still keeps coming up on my radar as an income stock. Very high dividend payout ratio - around 90% of earnings. Very high ROA and ROE though so it seems they don't need to retain much earnings but then this is a business that has shrinking earnings not growth. The balance sheet seems fundamentally strong and it appears to be a well run company. I guess its a question of when the business investment cycle is going to turn for the it services sector.

I currently do not hold.
 
I thought with the announcement of the share buy back at reporting time would have supported the share price but this stock has become much unloved.
 
fanger said:
I thought with the announcement of the share buy back at reporting time would have supported the share price but this stock has become much unloved.
Click to expand...

The good thing about them not purchasing any shares back yet is that they are being disciplined with the buy back. They obviously have a set price range for the buy back and the price hasn't dropped to that level yet, my initial fear when they announced the buy back is that they would just indiscriminately buy back shares at any price. I'm thinking that if the share price drops below $1 they will start the buy back. but that's just a hunch, I really have no idea when it will kick in.
 
clinta44 said:
The good thing about them not purchasing any shares back yet is that they are being disciplined with the buy back. They obviously have a set price range for the buy back and the price hasn't dropped to that level yet, my initial fear when they announced the buy back is that they would just indiscriminately buy back shares at any price. I'm thinking that if the share price drops below $1 they will start the buy back. but that's just a hunch, I really have no idea when it will kick in.
Click to expand...

Looks like they have started the buy back after that last announcement.
 
Does anyone know when they report? My broker has it down for the 8/8/16 but we are well past that now.
 

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