Country Lad
Off into the sunset
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MMS - McMillan Shakespeare
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Doesnt matter what happen from here on mms is set for profit declines in future years as this is a generous tax concession Labor or Lib will eventually has to close it ...to stop the budget bleeding into the red....
In good time when revenue is strong thing like this get over look...when revenue slow all options are on the table
GST, Tax Bracket, Tax concession like FBT etc... I wouldnt rule out tinkering with -ve gear as well....
It going to be ugly tomorrow ...very ugly
In good time when revenue is strong thing like this get over look...when revenue slow all options are on the table
GST, Tax Bracket, Tax concession like FBT etc... I wouldnt rule out tinkering with -ve gear as well....
It going to be ugly tomorrow ...very ugly
skc
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Yes... looks like $104m of revenue will be at risk which have 30%+ NPAT margin.
FY13 NPAT was $62m (83cps) so the current stock @ ~$15 is trading at PE 18x.
If the legislative changes do go through, NPAT could easily be halved. Then you are going to have PE premium taken right out of it given lower growth and the massive regulatory shock (at least in the short run). So say EPS falls to 45c @ PE 12x, this gives ~$5.5
Now that's probably the absolute worst case scenario as Abbott has said he doesn't support the changes. Libs winning the federal elections is probably ~60/40 bet, but politians and their pre-election promises should probably be discounted somewhat.
So... anything below say $6 would give you a free bet on Abbott keeping his words. Anything above $12 then the market's probably being a bit too optimistic. My guess is a high single digit opening with big range each way.
May be the right way to do this is buy <$10 and hedge it with a bet of Labour winning the election at $3.75. In fact, I will run this theoretical position of 1000 shares of MMS on open (if <$10) and $1000 bet on Labour @ $3.75...
P.S. The NPAT won't all go in one hit as they'd still have existing leases in runoff mode (probably 2-3 years by my guess).
P.P.S. They are keeping all permanent staff until after the election, and they are probably doing that at the expense of shareholder's FY13 final dividend. It seems to be a noble, strategic and expensive thing to do. Personally I'd reduce headcount by 10-15% (there's always some slack in the system).
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All we have a short term disruption in demand, and even a rise in earnings and 15% dividend rise which is likely if the coalition win......
Coalition are $1.20 to Labor $4.40 on Betfair. Right now.
So shorts that enter foolishly today will have to short into that and an illiquid stock....not very smart.
As it has fallen $2.64 dont be suprised if it rallies back to $16+ ....by midday
AHE has returned to its high.......so the market is saying the FBT change wont happen....for now.
This would be a short if labor were way ahead in the polls/betting markets but they are actually miles behind with limited chance of being elected, then elected with a big majority required to pass legislation.
Smart money will be buying at any open dip.....it may open higher......watch.
Coalition are $1.20 to Labor $4.40 on Betfair. Right now.
So shorts that enter foolishly today will have to short into that and an illiquid stock....not very smart.
As it has fallen $2.64 dont be suprised if it rallies back to $16+ ....by midday
AHE has returned to its high.......so the market is saying the FBT change wont happen....for now.
This would be a short if labor were way ahead in the polls/betting markets but they are actually miles behind with limited chance of being elected, then elected with a big majority required to pass legislation.
Smart money will be buying at any open dip.....it may open higher......watch.
I hope you got money ready to buy i reckon 20% drop minimum on opening, follow by a pro long down trend until the market can work out what exactly is its stable earning going forward....
If you want to buy I can short sell you now $14 -
before the market open its trading at $15ish
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I hope you got money ready to buy i reckon 20% drop minimum on opening, follow by a pro long down trend until the market can work out what exactly is its stable earning going forward....
If you want to buy I can short sell you now $14 -
Try down 55% at the open, a bloodbath to start. Guru's prediction was always ridiculous.
Current price look about right maybe up to 8.50 ....
I expect there is going to be a water down version like CCV and various reform that has a devastating effect on some business....
Skc figure around 5-6 bucks factoring for the worse so if you can get them at those price bargain -
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Current price look about right maybe up to 8.50 ....
Skc figure around 5-6 bucks factoring for the worse so if you can get them at those price bargain -
Price will bounce around a bit today as the day traders play with MMS and exit. EOD price will be interesting. Without guidance from MMS price prediction and valuation at this stage is speculation.
What will be more interesting is what happens come election time. A coalition win will see MMS soar.
skc
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We'd see double digit share price at some stage before the election imo.
OK so the theoretical position opened 1000 shares @ $7. The hedge is reduced to just $300 as I only needed to cover a fall-back position to $6 a share.
So total outlay ~$7300.
I had a mental blank and let the market movements get to me and "forgot" my plan this morning and couldn't pull the trigger under $7.
I had to walk away for a bit and then return and go over my analysis again. I made the decision that my analysis still tells me that under $8 is good buying on valuation grounds. I made an initial entry in the $7.90 range.
I am happy to admit that I still have lots to work on in terms of approaching events like this on a psychological level.
Will be looking to add to my position slowly in the next few months if possible.
I had to walk away for a bit and then return and go over my analysis again. I made the decision that my analysis still tells me that under $8 is good buying on valuation grounds. I made an initial entry in the $7.90 range.
I am happy to admit that I still have lots to work on in terms of approaching events like this on a psychological level.
Will be looking to add to my position slowly in the next few months if possible.
Agree at this stage mostly guess work and go in if you can handle the risk ....
Long run if this comes into affect the business margin will be compressed and they dont have the scale they used to have so lower profit amd margin all around.
Notice lot of cheap car loan advertise on TV lately since the annoucement -
Business that can profit from this should this legislation take effect will be personal loan lenders could have flow on effect to TGA, CCP etc...
10% of company turned over so far.
Probably bad idea to be trading this (could be a ‘digging out of the hole’ reaction that will stuff me up) but the volumes there and I‘m familiar with it so time to dust of some short term channels.... my bias is up, but I’m following the price, got to be more system driven selling (margin calls etc) coming yet I would suspect.
Investing – I’m sitting tight but believe that I may have set myself a new record for biggest one day decline in market value today.
Those putting anything like a firm valuation on this at the moment must be bloody good analysts – cause I for the life of me can’t pin down a fair value when politicians act irrationally in the throes of a dying government.
Expect big swings as the market provides price discovery.
When the dust settles should be lots for me to reflect on.
Probably bad idea to be trading this (could be a ‘digging out of the hole’ reaction that will stuff me up) but the volumes there and I‘m familiar with it so time to dust of some short term channels.... my bias is up, but I’m following the price, got to be more system driven selling (margin calls etc) coming yet I would suspect.
Investing – I’m sitting tight but believe that I may have set myself a new record for biggest one day decline in market value today.
Those putting anything like a firm valuation on this at the moment must be bloody good analysts – cause I for the life of me can’t pin down a fair value when politicians act irrationally in the throes of a dying government.
Expect big swings as the market provides price discovery.
When the dust settles should be lots for me to reflect on.
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You're not alone there, I hesitated as well but MMS was not a day trade for me so getting in at $7 to sell at $8 was not my plan anyway. MMS could just as easily have gone from $7 to $6 after the open. The panic selling today should pay off nicely for those willing to take the risk, it's just a question of magnitude.
skc
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Invest long enough and you will run into something like this eventually, no matter how diligent you are.
No firm valuation can be done, but I think a strip-everything-to-zero worst case scenario can be established. Then it becomes a game of probability and reading market sentiment.
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I'd say the volitility spike from algorithmic trading and forced sell down on margin has settled down now with the price hovering around $8. Whatever the intrinsic value may be, a 50% sell down is pure panic given the FBT change is hardly set in legislative stone.
If I am being intrusive or rude (not my intention) I apologise - but since you cannot arrive at a valuation, does your reason for holding have to do with your assessment of MMS' competitive position vs weakened competitors and the ability of the balance sheet to take a hit to earnings / revenue?
Would it be fair to say that those still holding may agree with those who are buying (excluding the traders)?
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V
I’ll get back to you on investment rational a little latter.
Bit pre-occupied now
Look a big short too a big punt at the open and every seller today has lost today...as there is no shares to buy back. I estimate the shorts are now caught short by 5m-7m shares and many to buy those back today and over the next few days....plus with other shareholders averaging down some and plus new entrants taking a punt on the election and a Liberal victory will push it back to $12 pretty easily.....especially if others buy in knowing that Rudd is unlikely to be elected. Right now the price is saying Rudd is elected and he will legislate...that is wrong.
Liberals are $1.20 v Labor $4.40....this has massive short covering bounce written all over it...
Approaching highs of the day...I think A $1-1.50 per day will come back into for it the next few days.
This is a buying opportunity
skc
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How did you estimate that?
