MOC - Mortgage Choice

Well - 12 months on and still going strong - I thought this one looked toppy when it hit $2 now we are looking to break $3 - who would have thought.

If you look at the weekly chart all the way back to March 06 it seems to trade in a fairly tight upsloping channel. And no signs of breaking it yet!

My big concern is CBA seems to be building a serious stake (in excess of 10% now - been building since last October). Hope they're not thinking of taking it over as it's a great business and I dont really want to sell.

malachii

Closed above $3 today ($3.02) - only another 4 cents and we're back into blue sky territory again.

Did I mention I love this stock??!!!

malachii

malachii said:

Well - 12 months on and still going strong - I thought this one looked toppy when it hit $2 now we are looking to break $3 - who would have thought.

If you look at the weekly chart all the way back to March 06 it seems to trade in a fairly tight upsloping channel. And no signs of breaking it yet!

My big concern is CBA seems to be building a serious stake (in excess of 10% now - been building since last October). Hope they're not thinking of taking it over as it's a great business and I dont really want to sell.

malachii

Click to expand...

If property market crashes, does this company get affected?

thx

MS

If the property market crashes will people stop buying houses to live in? Will people still need mortgages? Will the people who have mortgages be able to pay their mortgage out over night so it no longer exists?

Of course I'm being a bit sarcastic and I apologise - it's late and I should be in bed. However there is a degree of truth (my belief anyway) in what I said above. Companies like MC get paid on the mortgages they have written - you can calculate 50-60% of their income for the next 15-20 years based on the mortgages on their books. They can actually pay all their expenses with the loans they already have - any extra they write goes straight to the bottom line (ie shareholders). And if the market crashes sure - some loans will default - but the majority of loans will still be paid because most people still want to live in their house and will do everything they can to make sure that happens. Why do you think banks are so keen to lend you money for your house. It is probably the most secure loan they can make.

I remember when interest rates first started going up and their was a big press feeding frenzy on how the property market would crash. MC went down 30% to something like 75 cents. A little while later they came out and said that a profits were up on what the expected - the share price went up above where it was and life went on. Every interest rate rise since MC has dropped 15-25 cents that day and then been back up or higher within a week or so.

Their income is fairly predictable. Sure they may have a period where their income plateaus for a while (hasn't happened yet!) but over the longer term they will keep tracking upwards while they have such good managers and the other pluses people talk about. They have expanded away from the east coast (mainly NSW) base which has protected them a bit from the "real estate crash" of Syd. And they talk about consolidating in Oz and maybe expanding O/S so that may change things a little.

I'm normally a trader but I'm holding these for the long term - they seem pretty dependable although I bought mine for an average entry price of $1.02 so I'm well and truely in the money (in fact they owe me nothing because I sold a small stake that paid for all of my remaining stake.). I compare them a little to the banks. Would you have been happy to have bought any bank 5 years ago and held it till now - even though it has gone up and down - paid dividends - and might be effected by a real estate "crash"??

malachii

Broke into blue sky territory today - will be interesting to see what happens over the next while. Still tracking onwards and upwards.

malachii

I bought in Today
been on my radar for a while and it about the right price and CBA and PPT just increase their stake so the big boys is confirming with me this is a good stock at this price

Hope you do well. By the way when you read the PPT and CBA announcements did you happen to notice on whose behalf they were purchasing?

CBA bought for their Colonial Investment arm so I guess some Colonial Funds
and PPT bought for their funds as well... three internal funds they manage I assume.

Doesn't bother me too much, the price I'm willing to pay look right and I may be right, I may be wrong but it nice to see other big players buy as well.

Whats every1s view on this company?? Why is it so cheap, little debt and with the 'first home buyers grant' won't there be a lot of mortgage advice needed..? Thinking of buying when the price is right..

kirtdog said:

Whats every1s view on this company?? Why is it so cheap, little debt and with the 'first home buyers grant' won't there be a lot of mortgage advice needed..? Thinking of buying when the price is right..

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Rightly or wrongly, the market thinks that the big banks have got the mortgage market pretty much to themselves these days and that the brokers and smaller players will struggle to survive, let alone compete.

i dont see how australias biggest mortgage broker can go under, im likely buying in question is when..

kirtdog said:

i dont see how australias biggest mortgage broker can go under, im likely buying in question is when..

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Well, if they were to go under it would be for the same reason that Australia's biggest maker of buggy whips, or possibly kerosene table lamps, would have failed - not adapting to a changing market.

Hi all

Does anyone know the COU (Count financial) takeover? what is the latest development?
When the takeover is announced, MOC went to around $1 mark and now trading in the range of 75c
I assume COU is no longer interested but I cannot find any announcements...

Any input is highly appreciated

I started looking at this company again today, there is a bit of mention of the COU interest in the MOC agm pres. take a geez at that. It looks like COU are not too interested in getting more, and marking their shares to market.

I think i'll avoid this company for time being. This is probably a great chance to buy a decent company at a low price, but I think there are so many other cheap companies I can find more with less risk.

I think this business is fundamentally sound and the fear has been over done...property market (residential only) is not as bad as US and UK...comission has been slashed but it should be reflected in the share price at the moment.

With or without COU takeover...this is a good company with good earnings and stable dividend...if COU takeover, it's a bonus....

Anyone...opinion?

My opinion on this company hasn't really changed in 3 years. It is a sound company with fairly predictable earnings. They deal in mortgages so a lot (probably 50-60%) of their income is pretty stable over the next 5-10 years. If property goes up - people need a mortgage. If property goes down - guess what - people need a mortgage to take advantage. It is unusual for people to buy a house outright with out getting a mortgage. Even if you already own a house you are usually up sizing and need a loan. It is only a small percentage of people who are downsizing (I know - I'm generalizing!!).

Sure - they may not write as many mortgages this year (as they seem to be saying in their latest report) but they will still write a sizable chunk. Their earnings are down but still respectable and they will still deliver a decent dividend this year - maybe down 20% or so. This will still give a total fully franked dividend of around the 10% mark so not too shabby!

Shortly after this company first floated the Reserve Bank increased interest rates and the share price dropped into the 0.70s - kind of like now. People were worried about the stability of the company. Within 18 months or so the were up in the $3 range. Now the Reserve Bank is dropping interest rates and guess what - the market is worried about the stability of the company. I'm not saying they will be worth $3 in 18 months but in MY opinion I think the company has good long term potential.

It earns good cashflow, doesn't need to spend large amounts of money in developing new technology or updating equipment, it's simple and well managed and upper management holds large slabs of shares. All good signs to me.

GIANT SELF INTEREST WARNING - I OWN SHARES IN THIS COMPANY - If you look at previous posts by me I state that a large chunk of my holdings in this company are free held. I have also recently purchased another 25 000+ shares in this company at an average of about 75 cents so I have a pretty big interest in making this company look good - PLEASE DON'T JUST BELIEVE ME - DO YOUR OWN RESEARCH!!!!!

Seek$ucce$$ said:

Hi all

Does anyone know the COU (Count financial) takeover? what is the latest development?
When the takeover is announced, MOC went to around $1 mark and now trading in the range of 75c
I assume COU is no longer interested but I cannot find any announcements...

Any input is highly appreciated

Click to expand...

Count want to take over at $1.05 .. MOC said no too cheap..then they increase their stake a little bit more
still MOC ignore them and treat them like any other share holders...

to sum up count not going to get it for $1.05 when the founder hold a large chunk of the stock and said no.

so Count either have to sell down their stake or keep them as an investment for their free cash and if it can generate higher return than what count can make then why sell them....

in the mean time count can send all their clients this way while they have a large share holding and share the profit ...

That's a good point...

COU wanted to takeover because of a good synergy between the two businesses.
Failed to take over but holds a significant shareholdings would entice them to refer clients to MOC...it is for COU's own best interest anyway.

We'll see what's the effect on MOC of the next interest rate cut next month

MOC gets trashed today after the rate cuts....***confused***
rate cuts --> means more business for mortgage brokers right?

Can anyone explain to me why MOC has dropped 5% today after announcing what I thought were some quite good finacial year results - profit up almost 40%

Going ex dividend on Monday as well for 5.5c per share, which is about 4.6% yield at current prices.