TGA - Thorn Group

[zac]

Putting all your eggs in 1 basket certainly isnt advisable.
I know with Soros for example, he waited around 3 years for a nice trade to line up and smacked it hard.
Buffet has been similar with his choices.

However even Mutual Funds managers will tell you (in private) that diversyifying is a sure way to make sure you dont get rich,
Basically you become an Index yourself when you do that and just follow the wide trend.
Having said that, without knowledge of the markets, its the best thing people can do.

So I can admire Pioupiou for his committment to TGA, he's hit it hard from his 'specialised knowledge' and confidence. Not sure what risk management there is as that would be the most important thing.
Most successful people take on risk but far less risk than people would think they do.

 

[McLovin]

I have written endlessly on this topic, and the summation of what I have written can be seen at http://www.jochimaker.com/ (Magnum Opum of PiouPiou).

I thought you were much older than 20, Pioupiou! Well done, you even made it onto the news!!

 

[zac]

I thought you were much older than 20, Pioupiou! Well done, you even made it onto the news!!

Is there a reference anywhere?

 

[McLovin]

Is there a reference anywhere?

http://www.jochimaker.com/p/about-jm.html

http://www.jochimaker.com/p/pvf-news-story.html

For some reason I thought PP was in his 50's.

 

[Pioupiou]

I started off in 2007 with 31 stocks and about six managed funds, and I did not have clue what I was doing, except that I knew that the mob who managed my SMSF earlier knew even less. In spite of dropping some $700K in the GFC, I realised that clueless Pioupiou actually did better with the equities than the self-proclaimed cognoscenti who ran the managed funds that I held, so I increased the ratio of directly invested equities relative to investment funds, paring back over time to 16 stocks that I now hold.

It just happens that I have liked TGA better than the other stocks, and via a mixture of capital appreciation and hurling more money at it, I now have over half of my net wealth in TGA. I have spent countless hours looking for alternatives to TGA - thus far without success. I have recovered most, if not all of of the $700K I lost, substantially thanks to TGA. I would like to get down to a dozen stocks as my next goal, and the main problem is finding something TGA-like (other than TGA itself) into which I can invest the proceeds.

There has been much wasted energy expended in this forum on the TA-versus-FA debate. The path that I now prefer would be called FA, but in truth it is a mixture of both. Let me explain. TA, I think, uses SP history to second-guess where the SP is going in the short term. By using various "conventions", FA also second-guesses future SPs based on herd behavior - only the time-span of its focus tends to be longer. P/E ratios, EV/EBIT ratios and a host of other ratios are all simply "conventions" (read, herd behavior). It is on this basis, that I am prepared to say that given time, TGA's SP should allow it to enjoy the average of these multipliers, and for convenience I used the current average P/E ratio of 13.2. By the way, I include a risk-adjusted required rate of return as just another "conventional" ratio, and if an investor uses 10% to justify holding WOW, then it is unreasonable to use double that for TGA, given that TGA has the better set of metrics, on average. I hold WOW, and think it is probably over priced, whereas TGA at today's close of $2.00 is still under priced by my reckoning (my $607,656 investment is now worth $1m - very pleasing).

 

[prawn_86]

Without wanting to pry, so feel free not to respond, can i ask how a teenager got access to a high six figure portfolio in the first place?

 

[kermit345]

I'm of the understanding Jochi Maker who runs that blog and posts as PVF on the forums is a completely different person to Pioupiou and therefore Pioupiou is not 20 years old unless its a coincidence or i'm completely off base?

 

[Pioupiou]

http://www.jochimaker.com/p/about-jm.html

http://www.jochimaker.com/p/pvf-news-story.html

For some reason I thought PP was in his 50's.

For the record I am 71 - Jochi Maker (his real name) is in his 20s. Jochi is one of about four people with whom I had correspondence about TGA, and as he said he was going to write something about TGA, I sent him a report that I had written for myself, and he decided to publish it, rather than write his own blurb. Had I known it was going to be published, I would have edited it - cut out repetition and some dross.

I plan to update that report when I have read the interim TGA report to be published on 20/11/2012, and I'll slim my report down then. I'll ask someone to whack it on the Internet.

Getting back to TGA, the last transaction before 4:00PM was at $2.06, the COB SP was pulled back by a relatively large number of trades by the gnomes who come out after the ASX closes. Monday will be an interesting day for TGA's SP, I think.

 

[Pioupiou]

. . . Getting back to TGA, the last transaction before 4:00PM was at $2.06, the COB SP was pulled back by a relatively large number of trades by the gnomes who come out after the ASX closes. Monday will be an interesting day for TGA's SP, I think.

Today could be a rum day for TGA. When I looked on Friday just after 4:00PM, there was a large sell order (over 60,000 units at $2.00, which seemed odd). Anyhow, at about 4:10PM two dozen transactions went through at $2.00, and when I looked again later, the 60,000+ sell order had vanished.

Early this morning (Monday 22/10/2012) there were some 8,000 shares for sale ranging from $1.98 and $2.05, and 10,000 at $2.09. In total, not that this is a good indicator, because the outliers are meaningless, there were roughly 5.5 more shares sought than offered for sale. From a long-term investment perspective TGA is still cheap, so I would not be surprised to see the SP settle at circa $2.09 today. Predicting how Mr Market will act in the short term is not my forté, so take this as wishful thinking rather than sage advice.

There is a wad of serious money looking for a home in safe-haven stocks, and these investors are not looking for bargains (witness WOW currently on a P/E ratio of 16). Apart from size and liquidity, TGA has better metrics than WOW, and when this seeps into the awareness of this class of investor, they will want in. Let's see what TGA's interim report (to be published on 20/11/2012) reports, and how commentators and Mr Market react to it. It is this underlying FA basis of demand working with the views of speculative buying on a TA basis that should see TGA head north, in my less-than-humble opinion. A chartist's opinion is more valid in the short term than mine.

Further on the matter of many eggs in a few baskets, two disadvantages are: a) for an illiquid stock it may be difficult to exit quickjly; and b) when the stock is fully valued, one cannot skip out easily without the Taxman putting out his grubby hand for a share of the pelf. That is why I want to find a few more TGA-like stocks. This is not a problem for my SMSF portfolio, but it applies to my personal holding of 312,125 TGA shares showing a $174K on-paper capital gain at $2.00 a share, and it will be more than that as the SP increases. I am currently couch surfing (within family), and with TGA having increased in value I could sell and buy a place of my own, and then taxation considerations have to be considered, although I have some accumulated losses from other investments to reduce the impost.

 

[Boggo]

Wanted to follow up on this before today but been in Sydney since Fri last without access to my charts.

Below is the latest chart as of today, got to within 2c of 'ideal' target as calculated on the post in the link below where I mentioned that Wave 5's can be of limited life. It actually hit the 2.08 indicated in the link below before it rebounded.
I tend to lose interest at this point until a new Wave 2 and 3 type pattern re-emerges.
https://www.aussiestockforums.com/f...=18617&page=47&p=732749&viewfull=1#post732749

(click to expand)

 

[tinhat]

The market hasn't responded well to the half year report and figures. NPAT down 2%. Revenue up 4% but EPS down 5% to 9.57c. Interim dividend up half a cent to 4.5c

It seems that the debt collection business NCML is dragging the results down.

Nothing that exciting in the results. Gearing and cash position very healthy. Furniture rentals are replacing declining electronics and whitegoods. TGA is just onne more of the low earnings growth, solid yielding income stocks in the SMSF so it seams.

 

[McLovin]

The market hasn't responded well to the half year report and figures. NPAT down 2%. Revenue up 4% but EPS down 5% to 9.57c. Interim dividend up half a cent to 4.5c

It seems that the debt collection business NCML is dragging the results down.

Nothing that exciting in the results. Gearing and cash position very healthy. Furniture rentals are replacing declining electronics and whitegoods. TGA is just onne more of the low earnings growth, solid yielding income stocks in the SMSF so it seams.

The purchase of NCML was clearly a mistake in hindsight. The aggresive pricing competitiveness in PDL's was documented in CCP's FY result.

Apart from that, this seems to be tracking to about where it should be. There's been a slowdown in growth as flat panels and PC's decline. We'll see how they go finding a new revenue source.

Why is a $20m loan book only generating $580k in EBITDA for the half?

 

[Klogg]

Why is a $20m loan book only generating $580k in EBITDA for the half?

I had the same thought... My only explanation thus far is they're aggressively marketing/building that area of the company, so expenses are higher...

I'll be looking forward to tomorrow's presentation for a little more detail

 

[robusta]

Picked up some more today on price weakness for both my super and personal accounts.

 

[TikoMike]

I'm having trouble understanding as to why receivables have increased substantially with only a slight increase in revenue. Are they having trouble collecting?

 

[McLovin]

I'm having trouble understanding as to why receivables have increased substantially with only a slight increase in revenue. Are they having trouble collecting?

P15 of the presentation will explain it.

 

[Klogg]

I'm having trouble understanding as to why receivables have increased substantially with only a slight increase in revenue. Are they having trouble collecting?

Given receivables increased during this half, wouldn't it stand to reason that the entire impact on revenue would be shown in the next half?

That being said, there was still a 4.1% improvement in revenue... Not amazing, but it's quite impressive given the macro scene.

 

[TikoMike]

Given receivables increased during this half, wouldn't it stand to reason that the entire impact on revenue would be shown in the next half?

That being said, there was still a 4.1% improvement in revenue... Not amazing, but it's quite impressive given the macro scene.

Sorry could you please elaborate? From basic accounting my understanding is that you recognise revenue straight away after taking a receivable. Hence, revenue reported in the same period

 

[McLovin]

Sorry could you please elaborate? From basic accounting my understanding is that you recognise revenue straight away after taking a receivable. Hence, revenue reported in the same period

Finance lease accounting is a bit different. You recognise the revenue for the fair value of the good at the initiation of the lease and create a receivable for the present value of the minimum lease payments (ie the fair value plus the interest recieveable over the life of the lease).

 

[TikoMike]

Finance lease accounting is a bit different. You recognise the revenue for the fair value of the good at the initiation of the lease and create a receivable for the present value of the minimum lease payments (ie the fair value plus the interest recieveable over the life of the lease).

Thanks.