SSM - Service Stream

[pointr]

Oh well back below a dollar last time I looked. Last financial year we finished well in the black, easily outperforming the market, but boy have we been hammered in the past 3 weeks, heres to better times ahead including SSM. Of all the recent falls there hasn't been one company with any significant negative announcement,and its all been on fairly low volume. Such is investing! and anyway Friday is usually a bad day

 

[diliff]

Oh well back below a dollar last time I looked. Last financial year we finished well in the black, easily outperforming the market, but boy have we been hammered in the past 3 weeks, heres to better times ahead including SSM. Of all the recent falls there hasn't been one company with any significant negative announcement,and its all been on fairly low volume. Such is investing! and anyway Friday is usually a bad day

Yeah, there hasn't been a single gain that hasn't been wiped out within a couple of days or a couple of weeks.. SSM is incredibly illiquid at the moment, too, which doesn't help at all.

Just want to see what others think but as I said, surely as long as the SSM results at the end of the month are not negative, this will stir investors up and raise the stock price. It looks very undervalued at the moment to me, considering it is a bigger and hopefully a higher turnover company than a year ago, yet valued at less than half the price it was this time last year!

I know we're in a downturn, but 50% down while the market is only about 25% down? And SSM is probably less affected by it than most companies given they have pretty steady contracts, too!

 

[diliff]

Well, my sources reveal that the results will be announced tomorrow... With any luck it will jolt the share price up a bit.

 

[diliff]

Well at first glance, the results look reasonably good under the circumstances. Revenue up 82%, net profit up 61%, but earnings per share and dividend pretty much unchanged? I don't understand why that is the case.

So far, not much in the way of a change in the share price either. What do you think is holding investors back? The share price is almost half of what it was a year ago so even though the dividend does remain unchanged, it represents better value than a year ago.

 

[oldblue]

Well at first glance, the results look reasonably good under the circumstances. Revenue up 82%, net profit up 61%, but earnings per share and dividend pretty much unchanged? I don't understand why that is the case.

So far, not much in the way of a change in the share price either. What do you think is holding investors back? The share price is almost half of what it was a year ago so even though the dividend does remain unchanged, it represents better value than a year ago.

EPS similar to last year owing to the $40m equity raised last September. Issued capital is up about 40% on last year. Increased NP largely due to acquisitions, which also accounts for the increased capital of course.
The general tone of the market is probably the main reason for the sluggish SP but I don't see this result as any reason to change that.

Disc: Not holding.

 

[oldblue]

For what it's worth Citi rate SSM as a " Buy- high risk".

Disc: Still not holding but interested.

 

[ROE]

Yeah, there hasn't been a single gain that hasn't been wiped out within a couple of days or a couple of weeks.. SSM is incredibly illiquid at the moment, too, which doesn't help at all.

Just want to see what others think but as I said, surely as long as the SSM results at the end of the month are not negative, this will stir investors up and raise the stock price. It looks very undervalued at the moment to me, considering it is a bigger and hopefully a higher turnover company than a year ago, yet valued at less than half the price it was this time last year!

I know we're in a downturn, but 50% down while the market is only about 25% down? And SSM is probably less affected by it than most companies given they have pretty steady contracts, too!

Care not about the mr Market, if the earning is there the price will catch up at some point in time.
In bear market people fly to blue chip for safety and leave smaller company at bargain basement price .. you cant find a stock trade on a PE of 6-10 in a bull market but you find plenty of it in a bear market

 

[michael_selway]

Care not about the mr Market, if the earning is there the price will catch up at some point in time.
In bear market people fly to blue chip for safety and leave smaller company at bargain basement price .. you cant find a stock trade on a PE of 6-10 in a bull market but you find plenty of it in a bear market

Hi not bad

Date: 29/8/2008
Author: Michael Smith
Source: The Australian Financial Review --- Page: 60
During the 2008 financial year, the net profit of listed Australian telco,Service Stream, rose 61% to $A18.1 million. CEO, Patrick Flannigan, hasreiterated predictions for EBITDA of $A48 million in the current year. ServiceStream will pay a $A0.075-a-share full-year dividend. The group's sharesclosed at $A0.98 on 28 August 2008

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 10.4 15.0 15.7 --
DPS 7.5 9.7 10.2 --

thx

MS

 

[ROE]

one of my most concentrated stock and someone like what they see and makes some queries.

wonder who's looking at SSM and definitely I don't want to sell below $1.50 a share because it upside is too good

announcement today

"In response to enquiries from interested parties, Service Stream has appointed a corporate adviser to evaluate the interest and conduct a strategic review.
Further information will be provided as and when appropriate."

 

[pointr]

Last year (financial press,can't remember where??) the writer expressed the opinion that SSM would be a target this year for one of the big service / infrastructure companies. Perhaps they were right. From the days of 'shares' magazine I noted that the journo's where often right about 'what', but rarely knew when. Todays release may stop this being the only thread with an echo

 

[diliff]

Todays release may stop this being the only thread with an echo

Hope so, but wouldn't bet on it. There isn't much volume in the stock either at the moment. Just 80,000 traded today!

 

[Garpal Gumnut]

Hope so, but wouldn't bet on it. There isn't much volume in the stock either at the moment. Just 80,000 traded today!

This stock came up on one of my explorations last night.

I followed it during the day but wasn't convinced it was going anywhere.

Its website is certainly upbeat.

I'll keep an eye on it.

gg

 

[diliff]

Well this thread has continued to look like a ghost town..

In the hope of getting this stirred up a bit: What do you guys think about the impact that Telstra's being denied involvement in the National Broadband program. From what I had read, SSM were riding on the back of Telstra quite heavily and given Telstra's share value drop as a result of the news, I'm surprised SSM didn't react the same way. But then again, I'm really surprised that they haven't weathered this downturn better. I guess everyone is worried about their debt, and the possibility of contracts being cut down the line? Thoughts?

 

[bloomy88]

Been doing a bit of research on this stock lately.

I think their operations have scope for more growth.

With the SP this low and an attractive yeild i think that SSM could be a good buy.

Good luck to those holding

Cheers

 

[diliff]

Been doing a bit of research on this stock lately.

I think their operations have scope for more growth.

With the SP this low and an attractive yeild i think that SSM could be a good buy.

Good luck to those holding

Cheers

The SP is surprisingly low given it shouldn't be affected by economic issues to the same extent that most other companies are... it has fairly stable contracts with utilities. I'm very surprised it has dropped faster than the All Ords.

 

[psychic]

Profit guidance announcement came out this morning and slammed the share price of SSM. Appears to have bottomed at 23 cents and is now being bought up very quickly. Some are spotting a bargain I guess

 

[JTLP]

ROE...you still believe in the potential and future of this company?

I remember you noting you wouldn't sell for less than $1.50 due to the upside...still hold these reservations?

JTLP

 

[diliff]

ROE...you still believe in the potential and future of this company?

I remember you noting you wouldn't sell for less than $1.50 due to the upside...still hold these reservations?

JTLP

I'm still bewildered by the drop in SP though. It seems like the fundamentals of this company are fairly unchanged and it is still profitable. Can you explain how this profit warning has resulted in the value of the company being effectively halved?

In fact, to me it looks like the fundamentals aren't significantly different to when the price was $2! It has expanded a bit and brought on more debt as a result, but apart from that, what is the issue?

 

[Aka]

Been really punished for surprising the market ( they had opportunity to enlight shareholders at the end of January in the response to the price Query) - market is jittery , people do not like surprises after 2 weeks!


I think market overreacted today , overall EBITDA very much at the same level like last year ( SP price was about .75)
Balance sheet looks just the same
Cashflow very likely will not suffer (Divi will still be around 6-7c which makes it attractive even at over 30cents SP!)

EPS would be similar to last year 9c-11c per share , that is 2.5 times to current SP .
Claim of 14.6 mln is more of one off thigs then a repeating and was alread brought to accounts! Well if company resolve it , that will be a bonus.

I am buying it

 

[JTLP]

I'm still bewildered by the drop in SP though. It seems like the fundamentals of this company are fairly unchanged and it is still profitable. Can you explain how this profit warning has resulted in the value of the company being effectively halved?

In fact, to me it looks like the fundamentals aren't significantly different to when the price was $2! It has expanded a bit and brought on more debt as a result, but apart from that, what is the issue?

Look...I had a quick looksy and you can put it down to a few things:

1) Global Eco Slowdown resulting in slower business...

2) EBITDA only increasing by $800,000 on previous year (although take into account the one off impact of the McCourt Dando)...also remember that EBITDA is used to evaluate a company's profitability...not the FINAL PROFIT FIGURE...

3) SSM can not guarantee that the interim dividend will remain the same as last year...they are merely 'anticipating' that it will be...

4) Difficulties with infrastructure in QLD due to weather etc resulting in cost overruns and delays...

5) This McCourt Dando thing is also becoming a bit of an issue for SSM in terms of legal issues etc...drawing out time and money...

6) Negative Cash Flow of $15 mil (primarily from McCourt Dando)...EBITDA has no bearing on/does not determine or show cash flows...in debt times like NOW people like cash flow positive

As you can see i've listed 6 reasons why SSM has fallen from its lofty highs...hope that helps

DO NOT HOLD