VED - Veda Group

[galumay]

Virtually all business provide credit will use Veda or similar service

Hope that helps explain a bit ....
.....

Thanks ROE, i actually was half asleep when I wrote that this morning - up at the crack of dawn to go for a quick fish before work!

I had actually done more research than my comments suggested and on revisiting it I just felt they were a bit overpriced for my liking - having missed out early on.

Didnt catch any decent fish either!!

Nice sunrise tho' http://instagram.com/p/ss6rnhEJlP/

 

[ROE]

Nice sunrise tho' http://instagram.com/p/ss6rnhEJlP/

Nice, I like fishing, doesn't live close enough to the water to be able to do it often
just the odd weekend away to the coast and summer break

 

[robusta]

Seems like PEP are trying to exit their remaining stake in Veda

http://www.theaustralian.com.au/bus...le-of-veda-stake/story-fnjw8txa-1227097061963

Share price fell 6% today to $6.18 could be worth a look for the patient. I wish I looked harder when ROE first posted on this thread.

 

[So_Cynical]

Seems like PEP are trying to exit their remaining stake in Veda

http://www.theaustralian.com.au/bus...le-of-veda-stake/story-fnjw8txa-1227097061963

Share price fell 6% today to $6.18 could be worth a look for the patient. I wish I looked harder when ROE first posted on this thread.

They issued a denial...i continue to hold positions in my super and main portfolios.

 

[Faramir]

Where is ROE when we need his wisdom?

I do not think this news is important (other than creating a mini dip for someone to buy in.) I didn't top up cos I am holding onto my cash. I regret not buying more when I made my purchase back in July. I just regret not having more savings back then so that I could buy more (mistakes of my youth). I have been playing more attention to my prospects and treating VED as a "set and forget". Maybe I feel guilty for not montioring VED more regularly. When I got my dividend, I was happy.

Why would anyone sell such a massive portion of a great business? No wonder VED issued a denial. Anyone want to add to this?

 

[galumay]

Why would anyone sell such a massive portion of a great business? No wonder VED issued a denial. Anyone want to add to this?

On what metrics do you determine that Veda is such a great business? (genuinely interested, I don't see a 'great' business)

 

[ROE]

Why would anyone sell such a massive portion of a great business? No wonder VED issued a denial. Anyone want to add to this?

Hello folks, I been absent because I am busy doing properties deal.

I think VED is a superb business with or without PEP holding, It may be better off if PEP exit
Private Equity have a different business model than listed stock, they have different strategy.

their aim is to buy business that they can leverage, cut cost and sell out for profit, their time frame is usually
3-5 years.

PEP exiting VED just fit their strategy and profile, they use that cash and repeat the process for other business

I wouldn't worry about it, most Private Equity IPO is pretty bad for that reasons but there are diamond in the rough

so you just have to pick and chose ... JB hi-fi was Private Equity IPO as well and it certainly trade hell a lot higher than a few bucks at float.

why VED is a good business, it is an essential service that people use over and over again without them mining or producing anything and because they don't manufacturing anything, scaling up cost them little money and time but bring in bigger profit and margin...

Having 1000 customers or 100,000 customers cost them little extra money
and the information they collection is available to them in many readily accessible places.

they also has a tail wind with the new credit report system in place since March, as more and more people are aware of the new system and credit fraud, identify theft they will eventually get to know VED and use its service

also plenty of good accountant and advisers doing a lot of free advertising for VED and recommend their clients
to keep an eye on their credit rating, their financial identity and VED is the usual place they recommend them to go to keep this monster in check.

I personally use VED services as well so when anyone try to steal my identity
and apply for any credit I get alert right away and out a stop to it before it becomes a nightmare and I recommend most people
should, it is a cheap insurance for identify theft and credit fraud under your name.

I hold VED both in my SMSF and personal account and will continue to hold for a long long time.

 

[So_Cynical]

On what metrics do you determine that Veda is such a great business? (genuinely interested, I don't see a 'great' business)

Average annual revenue growth (i didn't crunch the numbers) looks to be over 12% and thats with big data only just getting going, potential for Veda to be a very big business.
`

 

[Faramir]

Hi Galumay

Thank you for your question.

On what metrics do you determine that Veda is such a great business?

I used more business fundamentals rather than metrics. Metrics is something I am still in the process of learning. It will take a while. I thought I already mentioned in this thread why I like VED. I admit that I looked at Veda through beginner's eye but I am sure I am right when I see their revenue grow. Their profits are good. I see a growing demand due to fear of identity fraud. There was an article in last Sunday's Sun Herald about how VEDA can charge customers to get their credit rating.
https://www.getcreditscore.com.au/
The above will be a popular website before anyone decides to go for a loan or buy something. If buying on impulse, the retailer will use this site and charge the customer (somehow) for it.
Veda have collected over 20 years of information of customers. Something that is very hard to do if another potential competitor tries to enter into the market.
Institutions will want more information about their customers' credit rating. It is not just the banks (with customers inquiring for loans), it could extend to shops like Harvey Norman, etc when they offer those "Interest Free Loans" to force customers to make impulsive decisions. Yes, there maybe something that I have overlooked but I did watch this company for most of this year and finally got my opportunity in July.

Hi ROE
Thank you for your reply and for expressing what I should have expressed but couldn't due to my inexperience.

It may be better off if PEP exit. Private Equity have a different business model than listed stock, they have different strategy. Their aim is to buy business that they can leverage, cut cost and sell out for profit, their time frame is usually 3-5 years.

Scaling up cost them little money and time but bring in bigger profit and margin.

Also plenty of good accountant and advisers doing a lot of free advertising for VED.

Thank you everyone for your input. Thank you So_Cynical for the chart. Hope I am on the right track when I explain my point of view.

 

[herzy]

Thank you for your reply and for expressing what I should have expressed but couldn't due to my inexperience.


Thank you everyone for your input. Thank you So_Cynical for the chart. Hope I am on the right track when I explain my point of view.

Sounds good to me!

 

[TPI]

Average annual revenue growth (i didn't crunch the numbers) looks to be over 12% and thats with big data only just getting going, potential for Veda to be a very big business.
`

Can't argue with a chart like that!

I read on AFR that you can get your credit file for free, but with some forms to fill out and documents to provide etc., so VED are repackaging this into a more easily accessible form and charging a fee for it, sounds good!

Personal anecdote though, I seem to have subscribed both to "my credit file" and "veda access", which provide similar information, and both are set to "auto-renew", but I don't know how to switch either one of these off.

I can't find a phone number to contact Veda and no-one is responding to my emails for the last few days, so they make it sticky and hard to unsubscribe too!

Veda seems to be diversifying into many other products so this seems good as well.

Btw, great post ROE, voice of reason .

 

[herzy]

I read on AFR that you can get your credit file for free, but with some forms to fill out and documents to provide etc., so VED are repackaging this into a more easily accessible form and charging a fee for it, sounds good!

Providing something in a slightly more convenient form and charging a fee isn't really a rock-solid business plan in my opinion.

Personal anecdote though, I seem to have subscribed both to "my credit file" and "veda access", which provide similar information, and both are set to "auto-renew", but I don't know how to switch either one of these off.

I can't find a phone number to contact Veda and no-one is responding to my emails for the last few days, so they make it sticky and hard to unsubscribe too!

This I also see as a negative rather than a positive - if you're charging for a service to make an otherwise free product more convenient, you should probably at least provide good service.

That said, it seems to be making profit. Can't argue with that...

Would somebody like to enlighten me further?

 

[TPI]

Providing something in a slightly more convenient form and charging a fee isn't really a rock-solid business plan in my opinion.



This I also see as a negative rather than a positive - if you're charging for a service to make an otherwise free product more convenient, you should probably at least provide good service.

You're right, as a holder of VED I'm just hoping someone from customer service responds to my queries as this anecdotal experience is not positive for me, and diversifying into other products that you can't also get for free is preferable (and they do have many other products from what I've read).

 

[pinkboy]

Providing something in a slightly more convenient form and charging a fee isn't really a rock-solid business plan in my opinion.



This I also see as a negative rather than a positive - if you're charging for a service to make an otherwise free product more convenient, you should probably at least provide good service.

That said, it seems to be making profit. Can't argue with that...

Would somebody like to enlighten me further?

Think about it for a minute................

You can get your OWN credit file for free...........but you cant get anyone elses can you?

So there are fees left, right and centre being charged when lenders are looking at potential customers, business are credit checking other businesses for accounts, judgments are being processed on defaulers etc.

Subscribing to your own credit file, besides the occasional alert from a CC provider is generally just there for your own keepsake.

VED is relying on constant churning of credit. Great in economic times such as low rates and high business activity. Not neccesarily at the same time, but robust business model, and huge monopoly market.


pinkboy

 

[galumay]

I am still trying to like this company! Reading what you guys have posted in response to my doubts helped ease my concerns and I went back and had a detailed run through of the numbers.

The cash flow looks good and my cash flow based valuation came out slightly above current share price, operating margin is obviously great, ROC & ROE not so brilliant, my valuation on earnings came in well below current price - even allowing for the strong growth predicted over the next 2 years - not really surprising because I discount nearly all growth after the first couple of years anyway with my model.

Probably my biggest concern was the interest coverage, at only 2.15 its way below my safety mark of above 4.

I guess if they can maintain that sort of FCF then the coverage is less of a concern?

I am starting to warm to the idea of taking a position at current prices!

 

[McLovin]

ROC & ROE not so brilliant,

Just remember ROE/ROC is a measure of what happened in the past. In this instance the company apparently bought lots of other companies. Sunken costs should not affect valuation (NB: that isn't to say they can't help guide valuation!!). That's why a better measure is ROIC with indefinite life intangibles removed, because you are trying to ascertain what the marginal dollar invested will earn, not what the marginal dollar invested 1,2,10 years ago earns.

It's a good example of why the Montgomery formula doesn't work all that well.

Probably my biggest concern was the interest coverage, at only 2.15 its way below my safety mark of above 4.

They reduced debt from $616m to $267m in the year. There was also a write-off of $12m in capitalised borrowing costs. I expect interest expense will fall substantially in the next period.

 

[galumay]

It's a good example of why the Montgomery formula doesn't work all that well.

They reduced debt from $616m to $267m in the year. There was also a write-off of $12m in capitalised borrowing costs. I expect interest expense will fall substantially in the next period.

Thanks McLovin, it really helps when the knowledgeable help us learners with info like this. I do only have a cursory glance at ROE & ROC, I will look into learning to calculate ROIC to give me a better insight - and now I know to consider the impact on past activity on these numbers.

The point about the interest is a good one too, it shows me that I have to work harder to understand why a metric is what it is, not just make a value judgement on the data.

 

[hiddencow]

Requested my free credit file a couple of months ago. It was quite easy to do and arrived by email in a little over a week. They are required by law to provide it for free but I'm sure Veda are hoping people don't realise that.
The credit file was very accurate in terms of credit enquiries but had very little information on the amounts of the amount of credit the enquiries were for and was incomplete on the current credit products I'm holding.
It seems they are reliant on the banks to provide this information which they don't always do.

Also while waiting for my file to arrive, I received a phone call with someone trying to put the hard sell on for their paid services. Had to tell him several times quite sternly that I was only interested in the free report before he would give up. Also read about other people's quite negative experiences with trying to cancel their subscriptions. They don't seem to be scoring many points for positive service but that might be the most profitable way of doing business.

 

[McLovin]

Thanks McLovin, it really helps when the knowledgeable help us learners with info like this. I do only have a cursory glance at ROE & ROC, I will look into learning to calculate ROIC to give me a better insight - and now I know to consider the impact on past activity on these numbers.

Have a look at WES. The purchase of Coles ripped apart their ROE. Of course Coles was a one off and once everyone knew they'd overpaid it was already factored into the price. And did overpaying for Coles really mean that opening a new Bunnings store would have lower returns?

Here's ROE from 2005.

Return on equity (%) 20.1 27.5 22.4 5.4 6.8 6.3 7.6 8.3 8.7 8.7

The rising ROE after swallowing Coles is symptomatic of a much higher incremental ROIC.

The point about the interest is a good one too, it shows me that I have to work harder to understand why a metric is what it is, not just make a value judgement on the data.

Easiest way is when you get a number that looks skewiff have a dig around. The answer is usually not that hard to find.

 

[The Falcon]

So is VED an Aussie Fair Isaac Corp in the making? I like the business model and I see strong tailwinds here. Added to the watch list