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NVT - Navitas Limited

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Re: NVT - Navitas

ROE said:
One more for buy and hold and dividend keep coming in every 6 months and more every year :)
Click to expand...

Yep certainly is a solid business. Can't wait to see what they do with the retained capital, hopefully debt is paid down so next time they buy something they can pay cash.
 
Re: NVT - Navitas

The Navitas thread has been quiet for a while so thought I'd chime in for an update.

Have seen quite a bit of material in the AFR lately about education enrolments turning the corner and finally posting rises in numbers.

SP wise, NVT has had a stellar run to all time highs. On current figures it is starting to look expensive, but with a company like this I guess it comes down to how much potential you give it to earn excess returns over its cost of capital in the long term. Most businesses cant achieve excess returns over the long term, with ROC usually sliding back to the cost of capital - I think NVT has a good enough model to defy the norm, the question remains for me... by how much!
Until I answer this question more accurately I leave excess returns at a very conservative level for the long term and continue to learn about the business :2twocents
 
Re: NVT - Navitas

Some interesting figures to show the power of NVT's business model / capital structure.

Net capital employed in 2007 report (ex-intangible assets) was negative $59.59m

Reported EBIT in 2007 FY was $48m

Net capital employed in 2013 report (ex-intangible assets) was negative $102.24m*

Reported EBIT in 2013 FY was $116m

There is nothing like using interest free leverage to fund and grow your business. I have yet to see a business that takes it to this level and not only maintains negative capital employed, but increases it at high rates over time.

Deferred revenue received in advance is starting to grow again - my favourite line on the balance sheet. So is cash flow generation.


*Note that I have taken out $40m excess cash from the assets in 2013.
 
Re: NVT - Navitas

Ves said:
Some interesting figures to show the power of NVT's business model / capital structure.

Net capital employed in 2007 report (ex-intangible assets) was negative $59.59m

Reported EBIT in 2007 FY was $48m

Net capital employed in 2013 report (ex-intangible assets) was negative $102.24m*

Reported EBIT in 2013 FY was $116m

There is nothing like using interest free leverage to fund and grow your business. I have yet to see a business that takes it to this level and not only maintains negative capital employed, but increases it at high rates over time.

Deferred revenue received in advance is starting to grow again - my favourite line on the balance sheet. So is cash flow generation.


*Note that I have taken out $40m excess cash from the assets in 2013.
Click to expand...

And with the straight shooter Rob Jones at the helm of such a good business model there’s not a lot to do with this investment.
Buy right – hold tight.


http://www.abc.net.au/insidebusiness/content/2013/s3817717.htm
 
Re: NVT - Navitas

Didn't I read very recently that Bell Potter, who floated NVT [as IBT at the time] now have a target price on the company of $5.10?

May be wrong.
 
Re: NVT - Navitas

Muschu said:
Didn't I read very recently that Bell Potter, who floated NVT [as IBT at the time] now have a target price on the company of $5.10?

May be wrong.
Click to expand...

Don’t know – Don’t Care.

But if other people’s views rock your boat – here’s the latest Consensus Price Target.

NVT.jpg
 
Re: NVT - Navitas

Buy the right business ...hold for long term chance are you will be richer every year more often than not...
Reduce and top up as required :)
 
Re: NVT - Navitas

Ves said:
Some interesting figures to show the power of NVT's business model / capital structure.

Net capital employed in 2007 report (ex-intangible assets) was negative $59.59m

Reported EBIT in 2007 FY was $48m

Net capital employed in 2013 report (ex-intangible assets) was negative $102.24m*

Reported EBIT in 2013 FY was $116m

There is nothing like using interest free leverage to fund and grow your business. I have yet to see a business that takes it to this level and not only maintains negative capital employed, but increases it at high rates over time.
Click to expand...

Looked past this business a few times until I worked out the cash flows. It just didn't make sense on first perusal, they payed out 100% plus of earnings and still managed to grow without retaining capital to grow. This is a fantastic business to hold for the long term if you can buy for a reasonable price.

Ves said:
Deferred revenue received in advance is starting to grow again - my favourite line on the balance sheet. So is cash flow generation.
Click to expand...

My other favorite line is net debt falling to $94.9m from $117m on 30th of June 2012, I would love to see this fall further in the future with the reduction to a 80% payout ratio.
 
Re: NVT - Navitas

Muschu said:
I'd rather fly my own kite.

Maybe I am deluded in thinking that ASF is largely about sharing views and opinions....
Click to expand...

Sorry Rick.

Broker Targets are a dime a a dozen as far as I'm concerned and just a Google search away. If you do fly your own kite then please do share your personal views, opinions, research, analysis :)
 
Re: NVT - Navitas

craft said:
Sorry Rick.

Broker Targets are a dime a a dozen as far as I'm concerned and just a Google search away. If you do fly your own kite then please do share your personal views, opinions, research, analysis :)
Click to expand...

Appreciated thank you Craft. I was trying to get to the point that this came from Bell Potter. Not only did they float the company but they also got a massive number of shares at the float price of $1. Maybe they no longer hold but, to my knowledge, they have consistently promoted the company. It strikes me as curious that, if accurate, they are now suggesting a target well below the current SP.

I got in at the float and also traded the company as it used to (imo) follow a pattern. NVT served me well but I don't hold at this time. I have no evidence but feel they may now be overvalued.

I also agree that Rod Jones is an excellent CEO.

Regards

Rick
 
Re: NVT - Navitas

Just some interesting news on Navitas.

Goldman Sachs has this as a sell over the next two months.

http://finance.ninemsn.com.au/newsbusiness/motley/8742691/10-buys-and-sells-for-the-rest-of-2013

Some very clever automated marketing using Marketo seems to be widening the moat IMO.

http://www.cmo.com.au/article/52764...tion_helped_navitas_digital_marketing_agenda/

Finances have not been forgotten.

http://www.itbusinessnet.com/articl...ide-Using-Polaris-Reporting-Workbench-2874540
 
Re: NVT - Navitas

robusta said:
My other favorite line is net debt falling to $94.9m from $117m on 30th of June 2012, I would love to see this fall further in the future with the reduction to a 80% payout ratio.
Click to expand...
Didn't see this at the time - Robusta. I kinda disagree.

In a company where there is growth within a franchise that is achieving profitability rates well above it's cost of debt it is often very healthy to employ a little bit of leverage (especially if it can be used to employ capital that otherwise could not be funded). You often see this is mature companies because debt suddenly becomes cheaper than when they were smaller and more viable than equity finance.

In the case of NVT cashflow can definitely service the debt without introducing unncessary financing risk. And in this case returns on capital are very high, so any debt utilised to finance further capital deployment should increase the valuation of the company.

Paying down the debt may not be the wisest use of capital at this point in time, either.
 
Re: NVT - Navitas

Ves said:
Didn't see this at the time - Robusta. I kinda disagree.

In a company where there is growth within a franchise that is achieving profitability rates well above it's cost of debt it is often very healthy to employ a little bit of leverage (especially if it can be used to employ capital that otherwise could not be funded). You often see this is mature companies because debt suddenly becomes cheaper than when they were smaller and more viable than equity finance.

In the case of NVT cashflow can definitely service the debt without introducing unncessary financing risk. And in this case returns on capital are very high, so any debt utilised to finance further capital deployment should increase the valuation of the company.

Paying down the debt may not be the wisest use of capital at this point in time, either.
Click to expand...

Maybe my thinking is a little old fashioned, I just can't see the need for debt with the strong cash flows from this business. The cash generated from operations should be enough to fund any organic growth while a significant reduction of debt should reduce the need to issue equity if there are any acquisitions made in the future.

I'm still wondering what they are going to do with the retained capital as the pay out ratio is reduced to 80% over the next couple of years.
 
Re: NVT - Navitas

Very significant drop in SP today on back of 2 announcements which did not impress me as being too negative. Was the drop something of an over-reaction?
 
Re: NVT - Navitas

Muschu said:
Very significant drop in SP today on back of 2 announcements which did not impress me as being too negative. Was the drop something of an over-reaction?
Click to expand...

Really not sure what the market was expecting :confused: The northern hemisphere growth looks strong while they are investing in systems to manage further growth.
 
Re: NVT - Navitas

I've watched this stock for a long time. I'd anticipate a further drop tomorrow and then a bounce.
 

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