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NVT - Navitas Limited

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Re: NVT - Navitas

This stock run way ahead of itself, correction is justified given the grow rate...
market price this baby 25%+ grow ... I don't think it is achievable but Mr Market is way too happy with this one...

I like to price this around 5% grow a year with some premium due to its superior business model ....
Education is not some internet based business where you have leverage earning ...

Business model no doubt great but everything has price and $6 a pop is a price too far :)
 
Re: NVT - Navitas

I forget which major it was (Deutsch?) that lifted NVT to a Buy last week.... Still anyone can get it wrong. I certainly can.
 
Re: NVT - Navitas

Muschu said:
I forget which major it was (Deutsch?) that lifted NVT to a Buy last week.... Still anyone can get it wrong. I certainly can.
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That would be enough to put me off buying!

EDIT - not you! A major broking/investment house calling it a buy.
 
Re: NVT - Navitas

robusta said:
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.
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Positive reaction today. I don't know that there is a lot more upside short term but the charts for this company and GEM (G8 Education) could be a lot worse.
 
Re: NVT - Navitas

“With very good growth in all key markets the University Programs Division is well placed for a strong financial result in the coming years,” Mr Jones concluded.
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NVT.jpg
 
Re: NVT - Navitas

craft said:
View attachment 55639
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I don't own NVT, but I do watch it very closely.

When they say that new student growth was +30%, but EFTSU was +13% against PCP...does this simply mean that many of the students are not enrolling at a full time capacity? Or is there some other factor I am missing?

Also, based on how the industry is looking to take a turn back up in the coming years (cycle clearly appears to have passed the bottom now), have you looked at other businesses set to benefit?
My inkling would be that you are happy with the best-in-breed company based on other posts I've read regarding your personal situation and FCF/income paying preference and as such have not looked elsewhere..

I've been looking at the much smaller RDH which is in the educational space, unlike NVT it is cheap...but of course that is a function of the uncertainty associated with its ability to grow earnings in the future - something that I believe is the reason that NVT trades on such high multiples....
 
Re: NVT - Navitas

VSntchr said:
I don't own NVT, but I do watch it very closely.

When they say that new student growth was +30%, but EFTSU was +13% against PCP...does this simply mean that many of the students are not enrolling at a full time capacity? Or is there some other factor I am missing?
Click to expand...

Some students are finishing their courses - growth in EFTSU requires more new students then those finishing up.

VSntchr said:
Also, based on how the industry is looking to take a turn back up in the coming years (cycle clearly appears to have passed the bottom now), have you looked at other businesses set to benefit?
My inkling would be that you are happy with the best-in-breed company based on other posts I've read regarding your personal situation and FCF/income paying preference and as such have not looked elsewhere..

I've been looking at the much smaller RDH which is in the educational space, unlike NVT it is cheap...but of course that is a function of the uncertainty associated with its ability to grow earnings in the future - something that I believe is the reason that NVT trades on such high multiples....
Click to expand...

I don't have anything meaningful to add on RDH. Obviously the industry tailwind helps and by virtue of their size they have great share price appreciation potential (double edged sword) if they turn out to be a winner - But your right - I'm at a point where companies like NVT interest me more - but that's not to say that others shouldn't be looking in this area, depending on your capital, commitments, age, knowledge, objectives, volatility tolerance ......
 
Re: NVT - Navitas

The half-year report looks good to me. No surprises that I can see. Still investing heavily for growth, which is impacting margins in the short-term, but it looks like the industry headwinds are fast turning and momentum is building to the upside. The consolidation / investment period of the last few years is really going to start bearing fruits in the next few years. My prediction is that the share price won't look ultra-expensive in hindsight - I haven't added since the $3s, but may consider on any big dips.
 
Re: NVT - Navitas

I was so dumb on this one, I think largely because I didn't understand these guys' ability to grow for free. I kept wanting them to fall further and further and they never did. In hidsight when they were below $4 they were a bargain.:banghead:
 
Re: NVT - Navitas

McLovin said:
I was so dumb on this one, I think largely because I didn't understand these guys' ability to grow for free. I kept wanting them to fall further and further and they never did. In hidsight when they were below $4 they were a bargain.:banghead:
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Agree 100%.
Have had a read through the result and I like it.

It appears that the company investing heavily over the last couple of years has been timed very well with industry headwinds just starting to turn around recently. As Ves points out this could well look like a masterstroke to those who follow NVT in the years to come...
 
Re: NVT - Navitas

Yep took me ages to understand how they can use this crazy negative cash flow model and it's not a negative like I first thought. They get paid up front for a service that after the basic costs are covered any growth in revenue (more students) basically flows straight to the bottom line. To put it another way they don't need to retain working capital within the business as they can self fund from the reoccurring revenue that is flowing in all the time. Now here is the icing on the cake NVT seems to have a competitive advantage and can raise prices while growing student numbers and revenue.

Lucky for me the penny dropped Feb 2012 and being a slow learner after a lot of thinking topped up my holding Oct 2013
 
Re: NVT - Navitas

Yes. I had shares in this co a couple of years ago and did OK but I sold the shares because I could not get my head around their cash flow growth model. No retained earnings. All paid out as dividends usually indicates a dividend trap. When they bought whatever that business was that is the sound engineering educational business that is when I got out. That's probably a good business in terms of student demand but there are very few jobs in sound engineering.

I think what grates with me the most and why I cannot invest in education stocks is that I grew up in a county that still was a post war country that believed that all that had been sacrificed and fought for and won deserved the ideal that equality of opportunity was worth something - that education was not a business and that education was a good start to the journey of life.
 
Re: NVT - Navitas

NVT has one of the most powerful economic models around. When reality meets with some Muppet like Roger Montgomery and his ridiculous valuation formula implying that it can’t grow because of its payout ratio - reality wins every time - its just a question of patience.
 
Re: NVT - Navitas

Listened to the results webcast last night. While NVT don't as a rule give much in the way of guidance cash flow is a leading indicator. Cash flow was higher in this half and they seem confident it will be higher again in the next half. Seems like a nice runway of growing profits ahead.
 
Re: NVT - Navitas

There were a few key government contracts in the Professional and English Programs (PEP) division up for renewal on 1 July 2014 (refer investor presentation on 26 March 2014 page 35).

It's now 8 July 2014 and we have a trading halt mentioning "status of the negotiations." I wonder if the government is playing hard ball or if another competitor has made an enticing bid.

PEP was about 14% of EBITDA in the 2014 HY.
 

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