NVT - Navitas Limited

[skc]

Re: NVT - Navitas

EPS down fractionally. CY11 EBITDA for the SAE business is $3.2m lower than 2010.

The visa troubles in Australia (which should have some resolution this year) are being played out in the UK as well, which is affecting their operations there.

This is one I'll keep watching but won't consider at these levels.

Also an opeque forecast for H2... the only information being that it will be lower than pcp.

The chart had $3.20 as a major ledge. They crashed right through that today but has bounced back from a low of $2.87. I think we would see consolidation below $3.20 followed by another leg down. More solid support at $2.80 and then $2.40.

 

[JTLP]

Re: NVT - Navitas

I've always been keen to pick up NVT - but these results looked a bit flaky - especially when their core business (UP) fell by 5%.

The increase in dividend may help arrest the slide and provide something for people after yield though...

 

[craft]

Re: NVT - Navitas

Returned home from tripping around to find NVT under 3 bucks and despite having a reasonable holding, I psychotically had an inner smile and bought some more.

The headings from 4 of their presentation slides sum it up for me.

Global student numbers increase....
... as will those studying abroad.
Expecting a tough second half....
....but confidence in long term outlooks remains.

http://www.asx.com.au/asxpdf/20120131/pdf/4241dl65l33znf.pdf

The combination of an established medium term down trend in the price chart and no short term business catalyst should provide even more opportunities.

I think this company has great economics and GDP+ growth prospects over the long term. My goal is to get fully set whilst reasonable prices are on offer and at the same time hopefully avoid too much premature accumulation.

 

[JTLP]

Re: NVT - Navitas

Returned home from tripping around to find NVT under 3 bucks and despite having a reasonable holding, I psychotically had an inner smile and bought some more.

The headings from 4 of their presentation slides sum it up for me.

Global student numbers increase....
... as will those studying abroad.
Expecting a tough second half....
....but confidence in long term outlooks remains.

http://www.asx.com.au/asxpdf/20120131/pdf/4241dl65l33znf.pdf

The combination of an established medium term down trend in the price chart and no short term business catalyst should provide even more opportunities.

I think this company has great economics and GDP+ growth prospects over the long term. My goal is to get fully set whilst reasonable prices are on offer and at the same time hopefully avoid too much premature accumulation.

Had to re-read that last sentence a few times :

Why did you buy more when you note there is a downtrend and no short term business catalyst? This doesn't sound like an opportunity but an avoidance...

 

[skc]

Re: NVT - Navitas

My goal is to get fully set whilst reasonable prices are on offer and at the same time hopefully avoid too much premature accumulation.

Too much of that and you will leave your partner very unsatisfied indeed.

 

[McLovin]

Re: NVT - Navitas

Too much of that and you will leave your partner very unsatisfied indeed.

Bill might be able to sell you something to fix it.

 

[craft]

Re: NVT - Navitas

Too much of that and you will leave your partner very unsatisfied indeed.

Ha Ha Ha.... everybody makes fun of the premature accumulator.

Bill might be able to sell you something to fix it.

Who’s Bill? Does he offer quantity discounts?

Had to re-read that last sentence a few times :

Why did you buy more when you note there is a downtrend and no short term business catalyst? This doesn't sound like an opportunity but an avoidance...

On a more serious note, there is actually a rational answer to this question, well at least I think it’s rational – in the context of my investment philosophy, which is to buy assets that generate a greater ‘real’ cash flows over their life time then the price paid for them.

Once an opportunity is identified, there are two risks in relation to timing, one is buying too early, the other is missing out on the price that gives rise to the opportunity.

Buying too early means I suffer a few % points of opportunity cost over my envisaged time frame but I have at least locked in acceptable actual return. (so long as my assumptions were correct).

The ramifications of ‘could have, would have, should have’ are potentially unlimited opportunity costs and missing the opportunity to lock in an acceptable actual return.

Buying too early is a mistake of commission that sucks. ‘Could have, would have, should have’ is a mistake of omission that whilst probably easier to bear, can ultimately be a lot more detrimental to wealth creation.

Obviously I would like to buy at the absolute low – but I’m not that good, given my fallibility I err on the side of buying too early rather than missing out. But I’m not oblivious to the charts or the short term momentum of the business – they guide how aggressively I accumulate. Specifically I bought NVT this time round because; the market had had a chance to factor in the 2nd half forecast; and from an EW perspective there are some possibilities that a low is in place (I genuinely hope not) – ie a fairly symmetrical ABC correction terminating at the 61.8% Fib. Now I don’t really trust that analysis but it seems as good a reason as any to fire off another shot – and I still have a few more rounds left. I may run out of ammo before the price stops falling and that is a situation that really frustrates me but as I have hopefully explained, ultimately I would rather be a premature accumulator then the guy who sees the possibility but never takes the chance due to performance anxiety.

 

[robusta]

Re: NVT - Navitas

On a more serious note, there is actually a rational answer to this question, well at least I think it’s rational – in the context of my investment philosophy, which is to buy assets that generate a greater ‘real’ cash flows over their life time then the price paid for them.

Once an opportunity is identified, there are two risks in relation to timing, one is buying too early, the other is missing out on the price that gives rise to the opportunity.

Buying too early means I suffer a few % points of opportunity cost over my envisaged time frame but I have at least locked in acceptable actual return. (so long as my assumptions were correct).

The ramifications of ‘could have, would have, should have’ are potentially unlimited opportunity costs and missing the opportunity to lock in an acceptable actual return.

Buying too early is a mistake of commission that sucks. ‘Could have, would have, should have’ is a mistake of omission that whilst probably easier to bear, can ultimately be a lot more detrimental to wealth creation.

Obviously I would like to buy at the absolute low – but I’m not that good, given my fallibility I err on the side of buying too early rather than missing out. But I’m not oblivious to the charts or the short term momentum of the business – they guide how aggressively I accumulate. Specifically I bought NVT this time round because; the market had had a chance to factor in the 2nd half forecast; and from an EW perspective there are some possibilities that a low is in place (I genuinely hope not) – ie a fairly symmetrical ABC correction terminating at the 61.8% Fib. Now I don’t really trust that analysis but it seems as good a reason as any to fire off another shot – and I still have a few more rounds left. I may run out of ammo before the price stops falling and that is a situation that really frustrates me but as I have hopefully explained, ultimately I would rather be a premature accumulator then the guy who sees the possibility but never takes the chance due to performance anxiety.

Jokes aside this approach makes perfect sense to me, I picked up a piece of this excellent company a few days after the recent 'bad' result and would have been happy if the price kept falling as I could have bought more for less. The way I look at it is I win either way as long as the fundamentals of NVT continues to be strong.

 

[Ves]

Re: NVT - Navitas

Returned home from tripping around to find NVT under 3 bucks and despite having a reasonable holding, I psychotically had an inner smile and bought some more.

thanks for leaving some for the rest of us, mate! the best I could do was my $3.17 purchase on the "capitulation" day.

from my brief experience buying into companies for long-term holds seems to be worthwhile if you buy in after a capitulation event in the market, waiting for an even lower low is often too "greedy."

 

[McLovin]

Re: NVT - Navitas

thanks for leaving some for the rest of us, mate! the best I could do was my $3.17 purchase on the "capitulation" day.

from my brief experience buying into companies for long-term holds seems to be worthwhile if you buy in after a capitulation event in the market, waiting for an even lower low is often too "greedy."

Yes...and unfortunately, I got too greedy when others were fearful and missed the boat.

 

[tinhat]

Re: NVT - Navitas

I owned some NVT up until about a year ago. I didn't have a good feeling about it then but went ahead with a recommendation. Actually made some money on it but decided to get out. There is nothing about this company that I like. The whole thing is a deck of cards waiting to fall IMHO. The thing I didn't like about it when I bought was that it pays out 100% of earnings as dividend. Oh, but NVT has a business model that doesn't require investment in new capital. Woopee! Then they decide to make an "earnings accretive" acquisition but... oops!... no retained earnings so they run out and dilute shareholders capital with a capital raising, hock up on debt and do a good job of bashing up the balance sheet in the process.

NVT can cry all it wants about the harsh environment it has been operating in these past two years but its management followed the age old trick of hocking up on debt to fund an acquisition that was foreboding of the challenging environment for revenue growth ahead.

 

[Muschu]

Re: NVT - Navitas

The SP dropped after a bad report and has risen for no apparent reason other than perhaps the dividend, the perceived safety of education as a have and hope of visa requirements easing.

Not for me at this time.

 

[robusta]

Re: NVT - Navitas

Bought NVT under $3.00 recently and still hold but if they take on more debt and dilute shareholders again I will drop them like a cold spud. Hopefully lesson learnt by management.

 

[craft]

Re: NVT - Navitas

Bought NVT under $3.00 recently and still hold but if they take on more debt and dilute shareholders again I will drop them like a cold spud. Hopefully lesson learnt by management.

They issued 27 Million shares via placement/SPP and 6 Million to SAE vendors all at $3.80. They listed with 346.5 Million shares and now have 375 Million shares – Hardly chronic dilutors.

When one cash cow buys another they aren’t going to have too much trouble paying down the debt. Net interest cover for the last half was 12.3 – Hardly demanding. More like efficient use of a very robust cash flow.

Nothing here for a long term investor to be fussing about. Buy right - hold tight.

The thing I didn't like about it when I bought was that it pays out 100% of earnings as dividend. Oh, but NVT has a business model that doesn't require investment in new capital. Woopee!

Looks like we are in total disagreement twice in the same week. That is one of the most powerful wealth creating business models that you are going to see.

I don’t really have much to add to my previous posts about NVT except for TIME. Lets revisit this in 10 years time. The proof will be in the pudding.

ps. If I was a medium term trader this is still in a down trend despite the last few weeks.

 

[ROE]

Re: NVT - Navitas

I owned some NVT up until about a year ago. I didn't have a good feeling about it then but went ahead with a recommendation. Actually made some money on it but decided to get out. There is nothing about this company that I like. The whole thing is a deck of cards waiting to fall IMHO. The thing I didn't like about it when I bought was that it pays out 100% of earnings as dividend. Oh, but NVT has a business model that doesn't require investment in new capital. Woopee! Then they decide to make an "earnings accretive" acquisition but... oops!... no retained earnings so they run out and dilute shareholders capital with a capital raising, hock up on debt and do a good job of bashing up the balance sheet in the process.

NVT can cry all it wants about the harsh environment it has been operating in these past two years but its management followed the age old trick of hocking up on debt to fund an acquisition that was foreboding of the challenging environment for revenue growth ahead.

You seem fearful for such minor stuff
If you think this business is a deck of card what is a good business

Yes they have a bit of a hiccup..and for that they expand their moat a bit more...
all good in my book...

None of this stuff is red flag, I think it's helpful for the business and management to
run into headwind every so often, that way they are level headed and not become too hubris.

The founder family entire fortune is with NVT like FLT Graham Turner....both has extremely good insight into the industry they operate...I put my money on these 2 any day ...Remember Doom and Gloom around FLT during GFC, Graham show people what he's made off ...all good stuff....

PS: you know Education Accreditation is like a little mini monopoly right? it is hard and expensive to get
every time you get one of these the moat get a bit bigger....

 

[tinhat]

Re: NVT - Navitas

You seem fearful for such minor stuff
If you think this business is a deck of card what is a good business
.

I admit I had a bit too much red wine before posting

I don't understand this business. By conventional standards its balance sheet doesn't look good. I will keep an eye on it and go over and read this thread from start.

Cheers.

 

[ROE]

Re: NVT - Navitas

I admit I had a bit too much red wine before posting

I don't understand this business. By conventional standards its balance sheet doesn't look good. I will keep an eye on it and go over and read this thread from start.

Cheers.

Another way of looking at his business is Computer Shares cash side of type of business.

CPU get to hold the cash in advance for distribute to shareholders. This can be anything from dividend, to capital raising to hybrid payment. They hold that cash up until the day they distribute and earns a little interest earner risk free.

NVT collect money from students upfront, earn risk free interest, take a margin
pay the tutor and then teach the student.

Is there any other business where people pay you first and you get the service later?
do you pay your burger at mccas 3-6 months in advance and collect the burgers?
do you pay JBH $2000 three months before you collect the TV?

They need very little capital to operate and expand...so the more money they make
I prefer them give to me in dividend rather than keep it in their banks account
that do little for shareholders

And because the founder has a decent stake, he likes his dividend too so this likely to continue
and I love it..the more they make the more dividend I get and rising each year...

 

[robusta]

Re: NVT - Navitas

They issued 27 Million shares via placement/SPP and 6 Million to SAE vendors all at $3.80. They listed with 346.5 Million shares and now have 375 Million shares – Hardly chronic dilutors.

When one cash cow buys another they aren’t going to have too much trouble paying down the debt. Net interest cover for the last half was 12.3 – Hardly demanding. More like efficient use of a very robust cash flow.

Nothing here for a long term investor to be fussing about. Buy right - hold tight

IMO NVT is one of the highest quality companies listed on the ASX, and I hope to hold for the long term.

Having said that I think they paid too much for SAE and would not like to see more transactions of this type.

Would be happy if NVT stuck to their knitting from now on.

 

[Ves]

Re: NVT - Navitas

Having said that I think they paid too much for SAE and would not like to see more transactions of this type.

What are you basing this on?

 

[robusta]

Re: NVT - Navitas

SAE missed earnings expectations, hopefully this is temporary but I do not understand this side of the business enough to be sure.

ROE is down, I know there are mitigating circumstances but...

This article probably has a agenda to push but some food for thought here.

http://www.juliusmedia.com/cxweb/index.php?option=com_content&task=view&id=1000&Itemid=1