RFL - Rubik Financial

[springhill]

springhill, what do you think about this stock from a technical analysis point of view? at the 14.5/15c mark, it seems to have started to break through it's resistance level. If it does and does well, it could go well above 20c given a few weeks, as breakouts are usually followed by a step rise/decline in that direction. Do you see this breakout from the resistance level as being meaningful?

Hi pods, sorry I can't help you with any tech analysis or target prices. It would be nothing more than an uneducated guess.
What is blantantly obvious is the demand. Large sell orders being taken out in one hit has only been happening for around 4-6 months.

Hopefully some of the tech guys on here will see this and oblige.

All the best.

 

[springhill]

I should have my right to post charts revoked after this effort, but there could be a distinct pattern emerging with the rise in SP.

Anyone else think a retreat is the case based on chart pattern or breaking this set up and heading stronger for longer?

Sellers not swamping buyers.

 

[burglar]

I should have my right to post charts revoked after this effort, but there could be a distinct pattern emerging with the rise in SP.

Anyone else think a retreat is the case based on chart pattern or breaking this set up and heading stronger for longer?

Sellers not swamping buyers.

Who detailed your chart, springhill?

 

[springhill]

Who detailed your chart, springhill?

Sadly, I did.

 

[burglar]

Sadly, I did.

You can't challenge a chartist to do a chart!
I can't challenge a Value Investor to do a valuation!

Doubly sad!!

Edit: Looks like Elliott Waves, does it not? (low volume on wave 5, then ...)

 

[VSntchr]

Bit of weakness today adding to the charts validity lol.

Had my eye on this one for a while but never pulled the trigger. Recently had some spare time and did some futher analysis, Im hoping that the pull back goes a little further so I finally can. Have an order in so lets see how she goes!

 

[VSntchr]

Honestly dont believe this to be the case. The long time flatness of the SP has been due to long term product development and minimal market penetration. Sales have just started to roll, revenues from these sales will not roll in until Q3 FY 2013. Only just above cash value with future revenue increase. Further potential product acquisition plus the hope of further market penetration. That all stacks up quite nicely.
Just because you didnt buy at the bottom doesnt mean you cant catch any further potential SP increase. Are you better off buying at 5c with no positive news, or 8.5c with positive news rolling in? Have you really missed it?

A good post to reflect on.

The price has since peaked at $0.16, an almost 100% increase since the poster thought he had 'missed the boat'. This shows the importance of doing the research and digging down, rather than assuming a big run in price has caused the valuation to become expensive.

 

[springhill]

A good post to reflect on.

The price has since peaked at $0.16, an almost 100% increase since the poster thought he had 'missed the boat'. This shows the importance of doing the research and digging down, rather than assuming a big run in price has caused the valuation to become expensive.

Well spotted VSntchr, admittedly once a stock goes on a run I tend to avoid them. My aim is to attempt to pre-empt that run.
Having said that 5c to 8c probably isn't enough to scare me off, I didn't think that RFL would have reached 16c at this point.

Reviewing older RFL announcements I picked up on this.

There has been no further news on the acqusition status of the target mentioned in the announcement below. There is a mention of the final hurdle to complete takeover is an audit on the FY13 accounts of Proviso. As there are several stages of action before that, and it now being April, I am assuming that announcements on the prliminary payments involved would have to be made in the next month.

See under financial considerations, I wonder if existing holders will be given the option to be involved in a cap raising, or it will be another private placement?

I am a big fam of RFL amd it has performed admirably for me. If they have manage any debt taken on and keep the issuance of shares to a minimal nature this has the potential to be a remarkable company.

$RFL ENTERS INTO A CONDITIONAL AGREEMENT TO ACQUIRE LEADER IN SCALED ADVICE

Acquisition of Provisio Software, a leader in scaled and online wealth advice

EXPANDS RUBIK’S PRODUCT SUITE IN THE GROWING SCALED ADVICE MARKET
BROADENS RUBIK’S LEADERSHIP POSITION IN THE INSTITUTIONAL WEALTH MARKET
EARNINGS ACCRETIVE
Rubik, at completion, will pay $0.29m in cash to the Vendors and issue them 2.1m shares at $0.10 each. Rubik will make a further payment once the FY13 accounts have been audited, which is expected to total $1.0m, being 3.0 times FY13 EBITDA less the completion payment. This payment shall be a mixture of cash and shares in Rubik, again issued at $0.10 per share. Both the FY14 and FY15 payments may contain scrip, which may be issued at Rubik’s option at the 5 day VWAP immediately following the announcement of RFL's FY14 and FY15 annual results

Financial Considerations

Forecast normalised Provisio EBITDA is $0.5m (year ending June 2013);
Provisio’s revenues are expected to exceed $1.6m in FY13, with strong growth expected in FY14 and FY15
Purchase price is 3.0 times FY15 EBITDA, with a cap of $20.0m, which would require FY15 EBITDA to exceed $6.67m.
Rubik will fund this acquisition through existing cash reserves and issuance of equity.

 

[springhill]

A small article mentioning RFL's new services as part of the Provisio acquisition.

http://www.financialstandard.com.au/news/view/26860202

Made a new high of 17c this morn, low volume so far.

 

[VSntchr]

Doing some further work on these guys tonight.

According to the FY12 result, they are carrying $79m of operating losses!
They certainly won't be paying tax for a while....


Looking at the latest half yearly the operating margin has jumped to a little over 10% now.
Will be good to get the FY results to see if it continues to rise and how the major acquisition will alter the revenue numbers going forward.

One of the rarer stocks that has been holding/performing well this week!

 

[springhill]

Doing some further work on these guys tonight.

According to the FY12 result, they are carrying $79m of operating losses!
They certainly won't be paying tax for a while....


Looking at the latest half yearly the operating margin has jumped to a little over 10% now.
Will be good to get the FY results to see if it continues to rise and how the major acquisition will alter the revenue numbers going forward.

One of the rarer stocks that has been holding/performing well this week!

Or a dividend either....

Look forward to hearing your thoughts once the FY results are out.

With mining (temporarily?) on the nose and the more speculative mineral explorers not getting the attention and support they have had in the past, do you see that speculative interest transferring to other areas like financials, software, telecommunications & information technology services?

Those with high risk tolerance, like myself, will surely still be looking for something to invest in?

NEA was one that pulled a lot of attention over the past couple of days.

I am not that across the sectors mentioned above, any other RFL style stocks out there worth investigating?

 

[VSntchr]

Or a dividend either....

Look forward to hearing your thoughts once the FY results are out.

With mining (temporarily?) on the nose and the more speculative mineral explorers not getting the attention and support they have had in the past, do you see that speculative interest transferring to other areas like financials, software, telecommunications & information technology services?

Those with high risk tolerance, like myself, will surely still be looking for something to invest in?

NEA was one that pulled a lot of attention over the past couple of days.

I am not that across the sectors mentioned above, any other RFL style stocks out there worth investigating?

Havent really been looking for anything new.
Ive been brushing up on my valuation skills (very time consuming lately!)..and have been trying to keep up with my current watchlist.
The only stock ive been keeping up with that you might be interested in is GRB. Funnily enough it also trades at $0.17. Its not a bargain anymore but it might still be a growth play..
Went into a trading halt yesterday for a CR, might be worth you checking out.

Anyway - looking forward to some more updates from RFL...but in the meatime, your comments about a shift of risk appetite has me thinking. I hope your right, because my portfolio is already positioned to benefit from such a shift (and I think this really has already occured over the last 4 months TBH..but could keep going)

 

[Ves]

The only stock ive been keeping up with that you might be interested in is GRB. Funnily enough it also trades at $0.17. Its not a bargain anymore but it might still be a growth play..
Went into a trading halt yesterday for a CR, might be worth you checking out.

I think this one has massive earnings risk, and is conveniently also very capital intensive. Has some things going for it, but the same things could turn out to be their biggest weaknesses (ie. similar to JIN). I think it's an earnings re-rating play (in this case future earnings) that has, or will, run out of steam very soon. Just my opinion, too risky for me.

Same with RFL unfortunately.

 

[springhill]

I think this one has massive earnings risk, and is conveniently also very capital intensive. Has some things going for it, but the same things could turn out to be their biggest weaknesses (ie. similar to JIN). I think it's an earnings re-rating play (in this case future earnings) that has, or will, run out of steam very soon. Just my opinion, too risky for me.

Same with RFL unfortunately.

Do you see future sales mitigating this risk somewhat? It has been a long time in between sales announcements, which I have flagged as a concern in the past.

From memory there was a previous post that had something like 20 potential customers at various stages of product assessment and possible uptake.

 

[Ves]

Do you see future sales mitigating this risk somewhat? It has been a long time in between sales announcements, which I have flagged as a concern in the past.

From memory there was a previous post that had something like 20 potential customers at various stages of product assessment and possible uptake.

Springhill my response was more to do with GRB. Happy for a moderator to move it if it is causing confusion.

 

[springhill]

Rubik Financial Limited sells Shelf Companies Australia Pty Ltd

Rubik Financial Limited ("Rubik") today entered into an agreement to sell, and completed settlement on the sale of Shelf Companies Australia Pty Ltd ("Shelf Companies"). The cash consideration on disposal is $830,000, with a net asset value at date of sale of $297,000.
Shelf Companies is a provider of company incorporation and trust deed establishment services to a predominantly West Australian customer base.
Rubik's Chairman, Craig Coleman commented on the sale "Shelf Companies Australia provides its customers with a premium company and trust establishment service. However following Rubik's acquisition of COIN Software last year, the Board has determined to focus Rubik's resources in our two core divisions being Banking Software and Wealth Management Software. As a result Shelf was considered non- core to Rubik and we recognise that new ownership would be good for Shelf Companies Australia, its employees and customers."

 

[VSntchr]

Good to see they are showing confidence in their main ventures.

The latest cash flow report slipped under my radar, was very busy last friday and only saw it now

 

[springhill]

Good to see they are showing confidence in their main ventures.

The latest cash flow report slipped under my radar, was very busy last friday and only saw it now

The cash injection doesn't hurt either.

Thoughts on their quarterly VS?

Net Operating Cash flow for this quarter $964k (down from $1.2m previous quarter)

 

[VSntchr]

The cash injection doesn't hurt either.

Thoughts on their quarterly VS?

Net Operating Cash flow for this quarter $964k (down from $1.2m previous quarter)

It doesn't scream high growth is my first impression. Lots of activity within the company so will have to wait for more commentary before thinking to deeply about it IMO

 

[VSntchr]

From Iress market update with relevance to their wealth management division:

An excellent result for 2012 particularly given the environment with revenue up 9.7% and segment profit up 15.2%

- Regulatory changes are driving technology and solution demand, particularly integrated remuneration management. Specifically FoFA compliance is pushing implementations across the client base.

Keeping in mind that Iress owns XPLAN, the main competitor to COIN.

What I like about the COIN acquisition is that at the moment, XPLAN has a bigger market share. This does not mean that COIN is a minnow however, as it does have some very high profile clients - i.e. I know that a big 4 bank uses it. This leaves COIN with room to grow as both the market grows and potentially if they can gain market share - which hopefully RFL management can.