By David Press on
6/2/2011 9:38 PM
Hansen Technologies Ltd's ( HSN-ASX) management team announced significant profit upgrades for the 2011 financial year earlier this week, which has prompted me to update my analysis of the company which should make for some interesting reading.
Hansen this week revealed internal expectations for full year EBITDA of approximately $19.5m on revenues of around $57m, and an EBIT of approximately $17m. Based on an estimated tax rate of around 22% (a little conservative and may come in slightly lower), I'm anticipating a NPAT somewhere in the $13m region, a very impressive 20% increase on last years results.
As I wrote in my last blog on Hansen Technologies, the company's revenues have been hit by the persistently high value of the Australian dollar, mostly...
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By David Press on
4/5/2011 8:26 PM
Having read QBE's ( QBE-ASX) AGM presentation today, I have to say that I feel pretty comfortable with my decision to hold and buy more of this stock in the last 12 months or so. Despite the fact the share price has underperformed significantly compared to the overall market, the underlying performance of the insurance business has been quite strong, giving me the feeling that at current share prices, this company ticks the boxes of a quality value investment.
To understand why I think QBE offers good value, you need to understand the business and how they derive a profit. To put it simply, QBE derives income from two main sources. The first is the insurance profit they make on writing insurance, that is, the difference between insurance premiums received and insurance claims...
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By David Press on
3/8/2011 4:10 PM
Having made my way through a number of half yearly reports in recent weeks, Hansen Technologies Ltd's ( HSN-ASX) performance is a real stand out and sets the company up for a fantastic full year result.
I discussed Hansen in the latter part of 2010 ( blog here) and formed the opinion that the company looked to be trading at a slight discount to it's intrinsic value. Having continued my research into the roll out of smart meters in the US and the technology required, I felt that due to Hansen's product and service offerings and market position in the US (particularly after the NirvanaSoft acquisition), the company was poised for strong growth in coming years. With an exceptionally strong balance sheet and apparently very capable management team, I took my first position in HSN in the low to mid 70c range. ...
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By David Press on
12/7/2010 2:35 AM
Having published a number of blogs of late mentioning Return on Equity (ROE) and intrinsic valuations ( HSN and DDT, I thought it a good idea to briefly discuss why we are using ROE as a key measurement of performance.
It revolves around the quite simple notion that a rational investor should desire an adequate return on the money they have invested, to make up for the additional risk they take by investing in a business. The ROE figure reveals the return management have achieved on shareholder funds/capital/equity, and therefore gives a return on what you are...
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By David Press on
11/30/2010 11:28 PM
Management of companies generating strong cash flows, with a strong balance sheet are often left with the difficult task of maintaining growth without squandering shareholder equity in the way of overpriced acquisitions. BHP comes to mind when I think of such companies (one need only look at their attempted acquisitions of Rio Tinto and Potash Corp. of Saskatchewan Inc). Shareholders often desire the excess cash be distributed rather then see management pay excess sums for acquisitions, resulting in lower returns on their equity, and it often shows in share price weakness whenever such large scale announcements are made (NAB and BHP being recent examples). Hansen Technologies Limited appear to be a company who deal with this conundrum...
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By David Press on
11/4/2010 4:34 AM
DataDot Technology Limited (DDT-ASX) may be a company many have not heard of, however I'd suggest anyone experiencing high levels of theft in their neighbourhood and or anyone with a taste for high ROE growth stories, should keep an eye on this small cap Australian company.
Thou shall not steal has been a commandment ignored by far too many for far too long, but it is from this that DataDot have developed a suite of property protection, identification and authentication products, most of which are covered by intellectual property laws. Their flagship product (which has been on the market for a number of years) is their DataDot technology. For those who haven't heard of the product, it is a microdot technology that is applied to items before, at or after purchase which provides the product with it own identity, somewhat similar to engraving the product. The obvious...
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By David Press on
9/11/2010 12:09 PM
Service Stream, one of Australia's leading communications and utilities industry service providers, has left many investors scratching their heads wondering if and when management can turn this company around. "One off" losses and legal claims from recent projects has resulted in SSM posting a full year loss of over $2m for FY2010, after posting profits exceeding $10m in previous years. It could be argued that you can look past the losses due to “one off's”, but the question remains, how many “one off's” do you allow before they become continuous wealth destroying activities?
Let's be positive and assume management do turn it around and the company runs smoothly throughout coming years. Service Stream operates a low margin, low ROE business which on it's own makes me apprehensive to invest in the company. The company does however have a large contractor...
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By David Press on
9/5/2010 2:26 PM
Having had the pleasure of watching a fair few programs on the Sky network's business channel featuring Roger Montgomery, when I heard of his book I very quickly visited his website and made what I believe is a purchase many may find invaluable. His published book Value Able...
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