IRI - Integrated Research

[galumay]

I have found the tricky bit is only being contrarian when the crowd is wrong.

 

[finicky]

Put an end of day bid in for 5,000 more
Just still like the chart as a spec turnaround possibility.
Looks like I'm not the only mug punter - unusual buy volume coming in the last two trading days. Not big absolutely but relatively. All happening outside best fit recent downtrend, might be grinding out a higher low.

Daily

 

[finicky]

Dropped as far as 0.36 today, big drop on strong volume for this stock. Still like its chances as a lottery ticket stock and chart form not broken (yet); bid for 5,000 more @ 0.355. Could be some eoy tax loss selling ahead?

Held

 

[galumay]

What has caused the big drop in revenue the last few years @finicky? Is it structural or cyclical?

 

[finicky]

@galumay I suspect cyclical but don't know why (I should charge for my analysis)
Maybe something to do with slowness to upgrade post covid.

 

[galumay]

In order to charge for you analysis you will need to get a little more creative, "While revenue has dropped in recent years we see the catalyst of AI providing a flywheel effect and combined with the moat IRI enjoys it should see a strong rerate as margins return to historical levels and management's disciplined capital management rewards shareholders, our target is $4.17."

 

[finicky]

My initial reaction was to excitedly ask for a link.

 

[galumay]

wen provide bank details.

 

[finicky]

IRI my June pick.

The weekly chart strikes me as fitting the mould of a bottoming stock. Obviously it has been levelling out for many months but for around 15 months there has been a preponderance of tiny bodied candles - a sure-fire sign! We can see that the momentum indicators have been diverging positively to price until recently as it tests the previous low. The weekly volume profile shows negative spikes yet the price has remained fairly buoyant - a total giveaway of bot churning!

A few IRI factoids to bolster the t/a:

The M.D/CEO is annex COO of Technology One (TNE). Tick
However, it has to he said, he cultivates facial hair. Cross
Founder Steve Killea still a big shareholder, 30%, albeit he sold a large whack at the height of IRI's market in Mar 2018, ushering in a 60% price drop by year's end. Did it for charity, lol. Killea started the company in his flat above a Sydney chicken shop (not his parents' garage)
IRI has some massive clients: see slide
Prior to the last two depressed financial years it was normal for IRI to earn a ROE of around 30%. In fact the median ROE figure for the last 9 years including the poorly fy21 and fy22 is 30%. IRI trading at 0.7 x book value.

Held @ 0.43 avg
Not a rec, just a spec punt

WEEKLY

DAILY

 

[galumay]

Its sort of getting to where its potentially interesting to me, the FCF is the issue now, its gone negative, partly due to the change in revenue types making up the sales growth, but I will be interested to see the FY results and see whether they are able to get margins back to historical levels and generate FCF at meaningful rates.

 

[finicky]

Got an order for 5,000 more @ 0.34 filled in bits and pieces over a few trading days.
That should do for a meaty spec punt unless I'm wrong and there's still a sizeable decline to come, at which time I will pbly risk a bit more. Still intrigued by the chart as a possible double bottoming formation?

DAILY

 

[galumay]

I reckon its a fair chance of being a turn around story @finicky I am just waiting for the full year results to see whats happening with the cash flow and then I may get interested!

 

[finicky]

A little extre volume today, daily bollinger bands pinching, closed on its high .. I'm excited.

Held

Daily

 

[finicky]

Closed on its weekly high.
A beautiful set of figures candles

Remunerated friend of China

WEEKLY

 

[finicky]

Quote:
"Looks Value, just lacks Catalysts"
How can I disagree?

Quote:
"We admit, however, there is a lack of potential catalysts over the short term with no trading update likely until around mid July given a lot of deals/renewals tend to happen late in the period (both H1 and H2)"
Again, most apposite.

Note date of research: 27/03/2023

 

[galumay]

Bell Potty pumping it is a hard sell for me! I was interested until you posted that @finicky!

 

[finicky]

Earnings guidance out FY23
Looks ok!
Cash in bank up 51% to FY22
EBITDA expected to be up 18% - 53%
Renewals up but new work slower than expected. Costs up: salaries, travel and client meetings, trade shows.

"Changes that we have made are taking time to embed.."

Held

 

[galumay]

My concern with the update is that there is no mention of FCF, this was a particular weakness in the business last year, so the fact they totally avoid mentioning it is a big red flag for me.

 

[finicky]

Yeah, if I read it right, the increase in cash held comes from giving the Chinese wrist burn to the receivables. Do you ever get invited a second time to parties galumay?

 

[galumay]

Now that you mention it, no!