galumay
learner
- Joined
- 17 September 2011
- Posts
- 3,453
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- 2,299
Its the kiss of death when the professional spruikers are putting their spin on it so strongly!
Maybe Vocus will become a good turnaround story in the next 12 months...time will tell though....
Last updated 29/11/2016.
We retain a high conviction view that the business will meet our Star Growth Stock criteria in the coming twelve months, www.lincolnindicators.com.au
Its the kiss of death when the professional spruikers are putting their spin on it so strongly!
Smashed again today. Anyone dipping in again?
Goldman thinks it's a buying opportunity.
However, you'd want to wait for a turn at least.
further, it's still running at a somewhat confident PE of 23 ish.
So not cheap if it's becoming an infrastructure from a growth much sooner than speculated.
Every one loved it! Not now
That's an historical PE that doesn't take in to account the acquisitions of NextGen or MTU. It's pretty meaningless given the transformation of the company in the last 12 months. Underlying NPAT for FY17 is forecast at $205m-$215m.
I have to ask - am I missing something here?
I understand the forecast disappointed, as did NextGen and the fact that its skewed to the 2H... but this seems well and truly overdone.
At current price of $4.10, that's a MC of $2.54bn, with underlying earnings about $210m. That's just over 12 times for a company that has ample opportunity to reinvest its earnings, not to mention the underutilisation of current networks.
How much have they increased their debt in order to buy all this growth givin capital raisings will be priced into that I supose?
I have to ask - am I missing something here?
I understand the forecast disappointed, as did NextGen and the fact that its skewed to the 2H... but this seems well and truly overdone.
At current price of $4.10, that's a MC of $2.54bn, with underlying earnings about $210m. That's just over 12 times for a company that has ample opportunity to reinvest its earnings, not to mention the underutilisation of current networks.
Fair question. But debt is sitting at just under 2* EBITDA. They even go through covenants on the AGM recording and none of them are near being breached.
It's on the higher end of what I prefer, but they could cover that with their eyes closed.
I'm scratching my head too, Klogg. OK NG is disappointing, but EBITDA is forecast to be $20m lower and MC has fallen $1.1b. Even if the company stood still, synergies (yes, yes I know!) alone would give it 10%+ NPAT uplift in FY18 from FY17. The debt is serviceable, no problems there and the underlying business is growing. Even looking at the CAPEX profile, it's pretty light and the bulk of it is growth capex which is driven by customer demand, not build it and they will come demand.
The accounts are a bit of a mess because of all the corp activity, but still...
The revenue profile for this business is pretty stable too. No one is canceling their internet subscription because the economy is tanking.
OK, so it's not just me.
Although, on your point (in italics)
As an aside - I'm sure the Teaminvest staff just ask questions so they can announce they're from TeamInvest. Shameless self-promotion in question time, but it made me laugh
Haha, wow... So much fail - sorry.When you quote a post it's all in italics, so you'll need to be a little more specific.
Was that the South African bloke who wouldn't shut up? Talk about grandstanding.
I pulled the pin this morning, after going thru a lot of internal discussions overnight along the lines of you guys (McLovin & Klogg), I have some other concerns from an operational and management point of view, M2 is the WORST company to deal with, they almost make Telstra look competent, and as discussed previously the NBN margins are pure creative accounting - in the sense that they are calculated by specifically not delivering the service paid for - and the shadow of the ACCC hangs over that problem for all telcos in our market.
In the end I just couldn't make a compelling argument for VOC remaining at a price of low $4 for long, so I took a position even though its not a sector I had any great interest in being invested in.
Its interesting the sort of reactions to the slightest bad news in the current markets, not sure if its a function of the volatility, or the general world uncertainty, but we have seen it a bit recently. The reaction to the update from SDI recently was similar - I think Mr Market is very nervous and flighty at the moment, this does create some interesting opportunities like VOC this week!
VTG also comes to mind.
On the NBN margins - I agree they're technically not delivering a service of 100/100 (for example) all the time, otherwise the CVC costs would send them bankrupt. But no telcos are...
If the government (or otherwise) were to go after them for that, nobody would sell an NBN subscription. While nothing is certain, it's highly unlikely this will happen. In fact, I'd be surprised if the ACCC didn't nudge the government further to reduce CVC charges so an adequate service is delivered.
The problem for the Government is that they are idealogically locked on to trying to make a return on a massive infrastructure project in a totally unrealistic timeframe. Australia's internet infrastructure has already been terminally damaged by Turnbull's ignorance of tech (despite his undeserved reputation), and it wont be easy to make progress with the luddites from the far right that control the Government..
At current price of $4.10, that's a MC of $2.54bn, with underlying earnings about $210m. That's just over 12 times for a company that has ample opportunity to reinvest its earnings, not to mention the underutilisation of current networks.
I'm scratching my head too, Klogg. OK NG is disappointing, but EBITDA is forecast to be $20m lower and MC has fallen $1.1b. Even if the company stood still, synergies (yes, yes I know!) alone would give it 10%+ NPAT uplift in FY18 from FY17. The debt is serviceable, no problems there and the underlying business is growing. Even looking at the CAPEX profile, it's pretty light and the bulk of it is growth capex which is driven by customer demand, not build it and they will come demand.
... I am guessing NBN is a competitor of NextGen's fibre? Is that why contracts are resigned on lower margins?
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