ISD - iSentia Group

[System]

iSentia operates a market-leading Software-as-a-Service (SaaS) business that provides many of the world's leading brands, companies, agencies, industry bodies and governments with media intelligence services to assist them to make more informed and timely business and communications decisions.

http://www.isentia.com

It is anticipated that iSentia Group Limited (ISD) will list on the ASX on June 5th, 2014.

 

[Wysiwyg]

Here is a real time trade to play out.

So ISD is near a very clear line of past agreement. Support and resistance. Any plans on this for a trade?

1) Buy Monday open price ---- U.S. market saw a reaction up after NFP news a confidence boost?
2) Short the previous S/R line ---- the world is all over this after Wysiwygs heads up and any strength will be sold
3)(a) Wait for a pull back to buy ---- price keeps rising and you miss the boat
(b) Wait for a pull back to buy ---- price pulls back and keeps falling

 

[skc]

ISD produced a shocker today and this was the sight greeted holder at 10:04:41am this morning. No bid. Not a single bid.

I have only seen this happen one other time in a large cap... QUB back on 4 Jun 2015.

Here's a piece written by Findthemoat back in June 2016 - where the author talked about ISD's legacy moat under pressure, the illustration of growth (outside of the moat) in Asia, its lack of edge in social media, and how the PE dress it up for sale.
http://findthemoat.com/2016/06/20/inside-isentias-moat/

On the other hand... Roger Montgomery loves ISD. Here's an exchange between Roger and one of his blog reader.

Ooops.

 

[Ves]

ISD produced a shocker today.

I remember reading that Find the Moat article at the time and thinking he made some good arguments.

I never intended to look at this in any detail whilst it was still above the IPO price (which honestly looked inflated on crude measures / "eye" test).

Looks like it's well under it now. :O

 

[fanger]

Another Roger Montgomery A1 stock takes a dive. How does these guy ever make any money?
I shouldn't bag him too much because I owned it to.

 

[Boggo]

ISD produced a shocker today and this was the sight greeted holder at 10:04:41am this morning. No bid. Not a single bid.

View attachment 70039

I have only seen this happen one other time in a large cap... QUB back on 4 Jun 2015.

Here's a piece written by Findthemoat back in June 2016 - where the author talked about ISD's legacy moat under pressure, the illustration of growth (outside of the moat) in Asia, its lack of edge in social media, and how the PE dress it up for sale.
http://findthemoat.com/2016/06/20/inside-isentias-moat/

On the other hand... Roger Montgomery loves ISD. Here's an exchange between Roger and one of his blog reader.

View attachment 70040

Ooops.

I reckon Roger may need to stop thinking that he is Charlie or Warren and buy some cheap charting software.
Better still his clients should buy some and start having a glance every time he mentions a stock, would have given them a nice heads up on the weekly ISD in Feb 2016 !

It's great entertainment on FB though

 

[skc]

Another Roger Montgomery A1 stock takes a dive. How does these guy ever make any money?
I shouldn't bag him too much because I owned it to.

I think Montgomery disclosed that ISD was only 2% of its portfolio. Now a reasonable size fund with 50 stocks (2% each) would be considered a concentrated portfolio... but ISD was an A1 stock that they were really high on. And you'd think they don't actually have 50 equally good candidates?! I wonder how they actually construct their portfolio - may be they hold lots of cash, or may be they hold some index-like core while using the remaining 20-25% to try to extract alpha.

 

[Boggo]

I think Montgomery disclosed that ISD was only 2% of its portfolio. Now a reasonable size fund with 50 stocks (2% each) would be considered a concentrated portfolio... but ISD was an A1 stock that they were really high on. And you'd think they don't actually have 50 equally good candidates?! I wonder how they actually construct their portfolio - may be they hold lots of cash, or may be they hold some index-like core while using the remaining 20-25% to try to extract alpha.

I guess every portfolio is going to contain a number of non performers, especially number of and the $$ size that these funds deal with.
You would think though that there would have been some sort of heads up with some big selloffs in the last 12 months that would have avoided this type of scenario.

I tend to think that they think that their approach is right and everyone else has got it wrong ?

I follow a few of these on FB and sometimes you really wonder about what they are seeing.

 

[fanger]

I think Montgomery disclosed that ISD was only 2% of its portfolio. Now a reasonable size fund with 50 stocks (2% each) would be considered a concentrated portfolio... but ISD was an A1 stock that they were really high on. And you'd think they don't actually have 50 equally good candidates?! I wonder how they actually construct their portfolio - may be they hold lots of cash, or may be they hold some index-like core while using the remaining 20-25% to try to extract alpha.

He says that about all his dogs, " its only a very small weighting in our portfolio" but if it reported well and shot the lights out he would say "its our largest holding"|

 

[McLovin]

One of the questions I had, which I never found a satisfactory answer to, was how much more valuable was the data available through social media than traditional media. My thinking was a lot more. Surely that has to be what drives the valuation of the legacy business. Most things find their way onto SM and the medium is almost like a focus group where you can gauge reaction in real time. That seems far more valuable than being told your product was mentioned favourably on the Ray Hadley Morning Show (do you really care it was mentioned or the reaction the mention generated...if a tree falls in the forest etc). If that is the case, then secular decline of the legacy business, as FTM argues is occurring, seems inevitable.


I was and am highly skeptical that ISD will ever become a big player in SM media monitoring.

 

[skc]

One of the questions I had, which I never found a satisfactory answer to, was how much more valuable was the data available through social media than traditional media. My thinking was a lot more. Surely that has to be what drives the valuation of the legacy business. Most things find their way onto SM and the medium is almost like a focus group where you can gauge reaction in real time. That seems far more valuable than being told your product was mentioned favourably on the Ray Hadley Morning Show (do you really care it was mentioned or the reaction the mention generated...if a tree falls in the forest etc). If that is the case, then secular decline of the legacy business, as FTM argues is occurring, seems inevitable.


I was and am highly skeptical that ISD will ever become a big player in SM media monitoring.

Monitoring traditional media is going to decline with traditional media... there's little doubt about it.

Monitoring social media is a completely different animal as you said. It's about active management rather than just monitoring. The monitoring is the easy part with all information being essentially digital and searchable.

My guess is if social media monitoring / management becomes a highly profitable thing, Facebook and other SM hosts would be the ones earning the excess return.

 

[greggles]

iSentia came up on a scan today, and boy has it been punished over the last couple of years. That punishment continued today with ISD down 70.5c (39.5%) to $1.08. At one point just after the open it was trading below the $1 mark.

I've decided to keep an eye on this one, if only to try and predict where it will bottom out, and if it can recover with all the negative sentiment surrounding it. Given it's performance over the last couple of years, I'm not overly optimistic.

 

[The Triangle]

I've bought in at 46.5 cents. Obviously a horrific day for the stock but the positives are net debt reduced to a very reasonable 43 million from 51 million, total liabilities down by 17 million. Dividend cancelled (good from a BS perspective). Generating good cash flow and still profitable. EV/EBITDA on forward earnings looking pretty acceptable at around 6.

 

[leyy]

I've bought in at 46.5 cents. Obviously a horrific day for the stock but the positives are net debt reduced to a very reasonable 43 million from 51 million, total liabilities down by 17 million. Dividend cancelled (good from a BS perspective). Generating good cash flow and still profitable. EV/EBITDA on forward earnings looking pretty acceptable at around 6.

I would probably wait till there is a clear reversal, this is in a clear downtrend and who knows how low this thing can go.

 

[Rainman]

View attachment 70040

Ooops.

The performance of Montgomery's funds is very ordinary. Most of the funds are either barely outperforming the market - like by 100 bps - or are severely lagging the market after fees: https://rogermontgomery.com/investing-with-montgomery/.

Roger himself talks a good game. But many of his investors would have been better off in an index fund.

 

[The Triangle]

I would probably wait till there is a clear reversal, this is in a clear downtrend and who knows how low this thing can go.

Apparently 29 cents! Win some lose some. Bought more today and that will be it for my holding.

 

[leyy]

Apparently 29 cents! Win some lose some. Bought more today and that will be it for my holding.

Still to early to say The Triangle, it looks lie you are trying to catch a falling knife.

If it closes above 38 cents i would be more interested in an entry.

good luck though.

 

[The Triangle]

Fantastic results. 40 million writeoff and sp up 25%! Guidance hit otherwise. Worth the wait.

Cash generation put towards debt which went from 55 million to 43 million and they still had 3 more million to add to existing cash balance. Net debt now at 28 million.

 

[greggles]

Isentia Group enters into Scheme Implementation Deed with AIM-listed Access Intelligence Plc, under which it is proposed that Access Intelligence will acquire 100% of the share capital in Isentia it does not already own by way of a Scheme of Arrangement for 17.5c per share in cash.

The ISD share pirce has been languishing ever since it collapsed in late October last year after a cyber security incident disrupted services within its SaaS platform Mediaportal. Since then, the market has lost confidence and the share price has suffered as a result.

This deal looks like a good result for everyone, especially shareholders who were unlikely to see 17.5c anytime soon. ISD closed on Friday at 6.8c. If I was a shareholder I'd be pretty happy with this outcome.

 

[The Triangle]

Im not happy with this result - however I accept that ISD must be performing horrifically. I had nibbled more at isd over the past 6 months but still have an average price in the mid 20s.

Its a bit suspect that the company was so accepting of the recent hack. No threats of legal action. No suggestion of responsibility.

The drop to 7 cents last month on no news was also suspect....?

The complete lack of corporate updates....?

The renegotiated debt last year then the admission last week that a recap was likely needed....?

Sold 1/2 and will probably wait on independent report. It won't be a fair or reasonable offer in my opinion but they'll suggest to take it and throw up a line about going concern.

Ill avoid investments where i see these board members or executives again.

Oh well. Can't win on every company.

Considering you can buy for 16.5 or 17.0 I wonder why the acquirer is not buying more shares on market?