TNT - Tesserent Limited

[Dona Ferentes]

Your shout @Sdajii Nice when they behave quickly!

I've been preoccupied and not reading enough ASF lately. Well done @Dona Ferentes . Good call

EXR nipping at heels but TNT holding up still

 

[Sdajii]

Your shout @Sdajii Nice when they behave quickly!

I've been preoccupied and not reading enough ASF lately. Well done @Dona Ferentes . Good call

Usually I would happily should a round of drinks or take a (cute) friend for a night out or something to celebrate at a time like this, but in hard lockdown I'm forced to enjoy my favourite foods at home alone! Over the last few days I've bought some gifts for some friends who have been doing it tough lately (plus my friend who initially pointed me in the direction of TNT, asking for my input - unfortunately he became extremely overburdened with work and didn't buy when I was jumping up and down saying I was buy buy buying at 7.6c, and he missed the train!), but it's not quite the same as doing it in person. Still, half of this problem is something I'm very happy to have.

 

[barney]

Usually I would happily should a round of drinks or take a (cute) friend for a night out or something to celebrate at a time like this, but in hard lockdown I'm forced to enjoy my favourite foods at home alone!

Yep, understand. Difficult times.

Good trade just the same and hopefully added a zero or two to the trading account

 

[Sdajii]

Yep, understand. Difficult times.

Good trade just the same and hopefully added a zero or two to the trading account

It has indeed added a zero! It needs to run a very long way to add another zero, unforunately! But hey, it may be within the realms of possible.

 

[Dona Ferentes]

as posted elsewhere by Mick (Mullokintyre) when talking about WHK; I've got a feeling it's pretty fair comment for what passes for cyber security practice everywhere; from his mate working in IT:

It's a really hot market right now because so many IT departments have been asked to turn their sticky tape local networks into remote work hubs with flawless VPN access over a 100mb cable line that cuts out at 60% humidity and surprise surprise it's [eff'n] hard. I can't see many sysadmins earning $60k to maintain a local network putting their hand up to take on cybersecurity without double the pay, so they get externals in. Also employees will be sharing everything over the internet instead of locally, so every company is now at risk of GDPR and PCI breach: even if they were compliant, their policy is now completely irrelevant because it all assumes working from the office.

The trick is the auditors don't actually fix the issues they find: they turn around and sell bog standard cyber insurance wrapping in a shiny fintech coating. It's very easy to sell insurance to the C levels when it's a lot cheaper than finding and paying good techs to actually do the work. I reckon companies like whitehawk promising flexible contract auditing can specialise in writing automated audit software just designed to spit out scary reports, and leave someone else higher paid to actually implement. It's basically the airtasker of security, hoovering up all the easy cheap work and leaving real jobs for real professionals.

I see a lot of the same in my industry with performance testing: digital marketing firms will pump out automated 100 page audits of all the issues wrong with a site, then when asked to fix them say 'we don't do that, go employ a developer'. They milk it for six months or so while the developers trawl through all the [bulldust] 'issues' that have a 0.001% effect on traffic while the agency takes low hanging fruit. The poor companies just don't have the technical skills to call [bulldust], and are terrified of the cost of employing someone who can, so they rinse and repeat the cycle.

Could be another source of insurance crisis in the making, a'la GFC: everyone kind of knows web security is a house of cards, all it would take is one big breach to bankrupt the lot. I've never once seen or heard of a company take full PCI compliance over cyberinsurance, it's all insurance all the way down to avoid upfront costs. They all treat it like it's only for 'real' e-commerce companies, except they don't realise they are one: everyone is now.

 

[Sdajii]

After a spectacular rally, TNT looks like it may be running out of steam. Long term I'm as bullish as ever for fundamental reasons, but the chart is looking uncertain. A lot of the heavy volume including the company's highest ever volume day recently was below the current price. The trendline which was holding up well was broken yesterday. I'm not sure what will happen short term now. When we broke the trend yesterday I sold most of my holding and bought back today plus a few more (threw the same money back in and increased my holding) which it looked like the candle would disappear, which it did. Interesting watching short term, or IMHO a good stock to have in the bottom drawer long term.

 

[Sdajii]

The following is in response to a post about TNT's fundamentals in a technical thread, so I thought it would be worth posting here:

I bought in last month when I accidentally stumbled across it, and all the pieces really seemed in place. As an industry, cybersecurity seemed like something obviously worth a look; it's obviously something which is on an upwards trend as computers/IT is only becoming an ever-increasingly large part of our lives. The Wuhan virus has put so much more internet use into our lives all of a sudden with people either working from home/remotely, or out of work and online all day, plus more online shopping rather than going to physical shops, etc etc etc. A lot of this will be permanent. We also have a deteriorating political situation, with international tensions rising and the threats of cyberattacks being larger than ever and ever-increasing.

TNT specifically was looking like emerging as the biggest fish in the Australian cybersecurity pond, and that seemed like a good thing to jump on given the likely sector growth, and it hadn't yet taken off. My timing was brilliant with a triple bagger coming my way within the next 2-3 weeks (since pulled back but still well over a double bagger for me). On a P/E basis TNT looks extremely cheap, and has indicated two more significant acquisitions coming (it indicated three and has already announced one of them, which triggered one of the big jumps). We should be added to the tech index on the next rebalance which should bring insto buying and more exposure. Plus all the government funding being thrown at cybersecurity this year, it seemed crazy that it hadn't already raced up when I bought in around 8c. I still think it has a long way to go, but regardless of the fundamentals, any rally is at risk of a pullback if it gets ahead of itself. I'm very confident there will be another good entry point coming up, whether that's if it takes a tumble or if it sets up for another breakout. As a fundamental investment I think it's good anywhere near the current price.

 

[tech/a]

With all due respect.
I often see this type of discussion instigated when
Punters are un sure of their opinion and position
In a trade. I see long term argument to hold and
Short term reasoning to sell.

While a fundamental thread technically this stock has
Switched from bull to bear.

Pick your timeframe
Position size to suit your trading plan.
Know where and when your analysis both technical and
Fundamental is wrong.
No stock should be a bottom draw stock unless it is way
In the money and long term bullish.
It’s fine to be wrong —- how long you stay wrong is the key.

Losing trades cost from capital loss AND opportunity cost.
A double whammy!
Bottom draws are TWICE as costly as taking a loss!

Just saying.

 

[Sdajii]

With all due respect.
I often see this type of discussion instigated when
Punters are un sure of their opinion and position
In a trade. I see long term argument to hold and
Short term reasoning to sell.

While a fundamental thread technically this stock has
Switched from bull to bear.

Pick your timeframe
Position size to suit your trading plan.
Know where and when your analysis both technical and
Fundamental is wrong.
No stock should be a bottom draw stock unless it is way
In the money and long term bullish.
It’s fine to be wrong —- how long you stay wrong is the key.

Losing trades cost from capital loss AND opportunity cost.
A double whammy!
Bottom draws are TWICE as costly as taking a loss!

Just saying.

Not sure why you feel the need to say 'with all due respect' when you've basically just agreed with what I was saying (long term bull, short term bear/unsure). Incidentally, I'd love your analysis on the chart and what bearish target you might be able to glean.

The bit where we partially disagree: having stuff in the bottom drawer. If you know what you're doing and you are watching it like a hawk, sure, that's basically true. If you have no ability or desire to understand the technicals and/or no ability or desire to check your portfolio frequently because you're busy or it's stressful for you or for whatever other reason, but you have a very strong grasp of the fundamentals, it does make sense to put something in the bottom drawer long term. There are also tax reasons to keep something in the bottom drawer. Many people freak out and get quite emotional/irrational when it comes to making quick decisions with money, and they're prone to doing silly things under pressure. Look at the majority of people who first try to trade on the share market and you'll see great examples. Most people don't get past this and so most people don't make good traders, but some may still want to invest long term if they know something has good fundamental value. Most people don't make investing anything like as big a part of their thoughtspace as you do, so what works for them will be different, and of course they may not get the same returns you do, but it allows them to focus on other areas of their lives more than would be possible if they tried to focus on something they don't like, aren't good at and would stress them and probably cost them a lot of money.

 

[tech/a]

Not sure why you feel the need to say 'with all due respect' when you've basically just agreed with what I was saying (long term bull, short term bear/unsure). Incidentally, I'd love your analysis on the chart and what bearish target you might be able to glean.

The bit where we partially disagree: having stuff in the bottom drawer. If you know what you're doing and you are watching it like a hawk, sure, that's basically true. If you have no ability or desire to understand the technicals and/or no ability or desire to check your portfolio frequently because you're busy or it's stressful for you or for whatever other reason, but you have a very strong grasp of the fundamentals, it does make sense to put something in the bottom drawer long term. There are also tax reasons to keep something in the bottom drawer. Many people freak out and get quite emotional/irrational when it comes to making quick decisions with money, and they're prone to doing silly things under pressure. Look at the majority of people who first try to trade on the share market and you'll see great examples. Most people don't get past this and so most people don't make good traders, but some may still want to invest long term if they know something has good fundamental value. Most people don't make investing anything like as big a part of their thoughtspace as you do, so what works for them will be different, and of course they may not get the same returns you do, but it allows them to focus on other areas of their lives more than would be possible if they tried to focus on something they don't like, aren't good at and would stress them and probably cost them a lot of money.

Most people invest like this ------.
No idea of analysis of any thought. That's why they invest in ETF's and see
Financial Planners.
They hear that CBA or BHP or Whatever is a good thing so they throw some money at it.
Worse they dont even know what it is they are buying (Mind you nor do I but I trade.
I dont need to know. ). If investing I need to know but not to the "Nth" degree.

So generally what happens is once any loss becomes too painful to crystallize it goes
in the file away for ever draw. Sometimes they get lucky from the get go
Sometimes lucky to recover losses.
But this isn't investing its thoughtless use of spare funds.

 

[barney]

I'm very confident there will be another good entry point coming up, whether that's if it takes a tumble or if it sets up for another breakout.

Agree. At a glance it looks to be behaving pretty normal for a fast mover.

Up almost 500% from recent lows (July 0.006) to a high around 29 cents

Current retrace/profit taking as expected 25% from recent High (29-22 cents)

A 30% retrace would bring it back to around 19-20 cents.

If the fundamentals stack up (I don't know enough to comment), that is the region I would prefer to start accumulating but it may not retrace that far/unknown yet.

If the FA and TA marry up, I think it always makes for a stronger trade long term but everyone has a different financial position to determine whether they hold through the bumps or cash in and pay the taxman his pound of flesh

Either way, nice little earner @Sdajii

 

[Sdajii]

Most people invest like this ------.
No idea of analysis of any thought. That's why they invest in ETF's and see
Financial Planners.
They hear that CBA or BHP or Whatever is a good thing so they throw some money at it.
Worse they dont even know what it is they are buying (Mind you nor do I but I trade.
I dont need to know. ). If investing I need to know but not to the "Nth" degree.

So generally what happens is once any loss becomes too painful to crystallize it goes
in the file away for ever draw. Sometimes they get lucky from the get go
Sometimes lucky to recover losses.
But this isn't investing its thoughtless use of spare funds.

Maybe we're talking about different things when we say bottom drawer? I definitely agree that if you have no idea what you're doing, no idea of fundamental value and you simply heard someone say company x was good value, or you made a guess, and the price goes down, that in itself is not a good reason to put it in the bottom drawer, and yes, that will often cause you to lose more money than taking the hit and selling out at a loss. I was saying that if you're sufficiently sure about the fundamental value and you don't want to pay attention to the short term movements, it's okay to hang on to something and wait for true value to catch up. Obviously someone like you who is a strictly technical investor would never do it, but there are different strategies which work for different people.

Just as an example of different investor mentalities, the person who first told me about TNT is not an investor. One of those people who has a great job, makes a pile of money, is very immersed in his corporate role, and says he wants to get into investing. He basically hears people talk about various stocks, and buys some of them, mostly on the basis of 'Person x got the last one right, they must know what they're doing, now like like stock Q and just bought, so now I will buy Q'. Not surprisingly this isn't working for him, and he is a little frustrated. I first bought TNT at 8.6c saying I thought it didn't look like a technically good entry but the fundamentals looked like they were about to shoot the share price, he asked me to tell him when I thought it was a good technical entry. A couple of weeks later I said it was a fantastic entry at 7.5c and I'd just doubled my holding at 7.5c (I saw a symmetrical triangle with a target of 10c), he figured I didn't know what I was doing because I just bought at 8.6c and was now telling him to buy at 7.5c, it was on the way down. The next day it hit 10.5c. He kicked himself. This was just last month. Not much later, I was seeing another symmetrical triangle, I was jumping up and down buying at 19c and saying it was a good technical entry with a target of 27.5c. He thought I was silly because I hadn't been saying buy between 10.5 and 17, but suddenly at 19c I was all about buying more. 3 days later it exceeded my 27.5c target. At this point he thought I was a genius who could predict anything and asked when he should buy. I said at this point I have no idea, he thought I was being modest and coy. He kept asking when to buy until I said something like "I think the fundamentals are good, it might be okay, it's difficult to say" at 26c and he bought in based on that. Then when I traded out at 23.5 he panicked and sold out. I bought back yesterday for 22.5 and told him, but the whole ride was just too terrifying and he is staying out, feeling confused and bewildered, upset about missing out, still pleading for me to tell him when to buy in, and I'm pretty sure if I said I was confident it was a good time to buy he'd hesitate until it started to go up then buy in ignoring the fact that I think the rally is about done. Totally true recent story here, not just an hypothetical example. For someone like him, watching closely and trading in and out is obviously just not a great idea, and more of a bottom drawer approach would be better. I don't mean 'irrationally hold it regardless of any new evidence', I just mean 'don't panic yourself and try to trade in and out because you'll just burn yourself'. Rather than a huge gain my friend is now on a small loss, and attempting to trade will just cause him to continually make small losses, maybe some small gains, and a lot of frustration. I think his psychology is quite common.

 

[barney]

Rather than a huge gain my friend is now on a small loss, and attempting to trade will just cause him to continually make small losses, maybe some small gains, and a lot of frustration. I think his psychology is quite common.

Yep .... Really good traders seem a fairly uncommon commodity, and over trading due to micro managing can keep a punter poor for sure.

The "Kenny Rodgers" indicator should always be part of a punters arsenal, but the KR stop loss point is different for everyone's individual trading "plan" of course.

Back to TNT .... Going ok today. Price action consistent with forming a consolidation range. I'd be backing a 23 cent close

 

[tech/a]

Sdajii

Will have a closer look over the W/E
But agree with your observations.
We all have friends like that.

'I used to be in decisive now Im not so sure".

 

[Garpal Gumnut]

Yep .... Really good traders seem a fairly uncommon commodity, and over trading due to micro managing can keep a punter poor for sure.

The "Kenny Rodgers" indicator should always be part of a punters arsenal, but the KR stop loss point is different for everyone's individual trading "plan" of course.

Back to TNT .... Going ok today. Price action consistent with forming a consolidation range. I'd be backing a 23 cent close

That is a coincidence. I was thinking of the Kenny Rogers dictum just before I opened this thread.

gg

 

[Sdajii]

Sdajii

Will have a closer look over the W/E
But agree with your observations.
We all have friends like that.

'I used to be in decisive now Im not so sure".

Thanks for taking the time to look at it, I'd be very interested in your thoughts.

As for what gets put in the bottom drawer, it sounds like we're on the same age but there was just some miscommunication. It's never ideal, but depending on what you mean by it (and maybe I'm not using the term in the way it's 'supposed' to be used?) it can be the best option for some people.

TNT is actually having a fairly good day today, currently up 6.7% and earlier was up 10%. Looking like we'll end the week on a nice green candle which it a welcome relief after the first four days were red.

 

[tech/a]

First a few things with regard to technical analysis.

(1) In every time frame T/A on a chart has an expiry both in time and validity.
(2) T/A is a graphical depiction of participant behavior over a period of time.
(3) The best you can expect from T/A if you are proficient is to be able to anticipate a move.

3 things will happen.
(1) It will move exactly how you anticipated through your analysis.
(2) It will do nothing
(3) It will move counter to your anticipated move through your analysis.

Technical analysis is DYNAMIC ---Fluid--- see (1) at the top.
T/A builds stories,adds to stories or ends stories on your chart.
a T/A indicator is NOT a signal --- at best it is an indication of what is happening in the NOW.

Technical analysts should strive to be excellent decoders of the chosen indicators they use to read their charts in the pursuit of anticipating opportunity.
They should then understand HOW to take advantage of the opportunity while mitigating risk.

TNT

 

[over9k]

So generally what happens is once any loss becomes too painful to crystallize it goes
in the file away for ever draw.

"A long position is simply a short position that failed".

 

[Dona Ferentes]

as telegraphed earlier:
Acquires Airloom kicking off Phase 2 of acquisition strategy

Airloom is a Sydney-based cybersecurity firm with a focus on security architecture and supporting organisations secure their journey to the cloud. The firm has a strong management team and an excellent operating record, with FY20 gross revenue in excess of $27M. Airloom is immediately earnings, cash flow and EPS accretive to the TNT Group, having achieved in excess of $2.7M EBITDA in FY20. Strong revenue and earnings are expected to continue into FY21. Importantly, the firm’s financial position is underpinned by multiple locked-in recurring multi-year annuity-based contracts.

The acquisition is fully funded through Tesserent’s Acquisition Debt Funding Facility with PURE Asset Management (announced 20 July 2020). The consideration for the acquisition of Airloom is a mix of cash and TNT shares, being $6M cash and 40M shares, issued at a 30-day VWAP, subject to any necessary shareholder or other regulatory approval. The cash payment will be split over two payments, with $5M payable on completion and $1M upon achieving agreed key financial milestones.

The

 

[Dona Ferentes]

and another one

- Tesserent strengthens position as Canberra’s largest pure cybersecurity provider with significant talent acquisition
- Industry-renowned cybersecurity expert and his team join TNT’s Canberra operation
- Ludus is the second acquisition in phase 2 following on from Airloom announced on the 26th of August 2020
- Tesserent now one of only three suppliers delivering full-service capability targeting $1.67B Federal Government cybersecurity funding package
- Acquisition immediately earnings and cash flow accretive

Ludus achieved in excess of $1.2M revenue and $350K in sustainable earnings in FY20, with strong revenue and earnings forecast for FY21. Importantly, the firm’s financial position is underpinned by multiple locked-in federal government contracts, and Tesserent expects to achieve strong financial growth from synergies as Ludus is integrated into North Security.

The acquisition is fully funded through Tesserent’s existing cash reserves. The consideration for the acquisition of Ludus is a mix of cash and TNT shares, being $536K cash and 4.3M Shares issued at 22.41 cents per share, subject to shareholder approval if required prior to completion