2 Divvy paying I.T services stocks

Discussion in 'Stocks & Derivatives' started by finicky, Feb 11, 2012.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    There is a certainly a bit of income that is not government sourced, I'll be looking to find a breakdown of revenue on a government versus private basis in one of their presentations. In H1 FY14 some of the new or renewed contracts they have reported are with Brisbane Airport Corporation, McInnes Wilson Lawyers, and AstraZeneca. A sampling of some other clients: QGC, Santos, Bendigo Bank, Brit Amer Tobacco, Vodaphone, Alpha Coal.

    Following the May announcement of the partnership with a web based education business, they then announced in June the first step in acquiring a company that provides WiFi analytics software applications and solutions to WiFi network owners. What that involves I haven't a clue. Just saying, that from an outsider view they are obviously looking for new lines of business outside of government contracts.

    From a chart view again - I looked at the quarterly chart (each candle = 3 months). It's pretty suggestive of a significant low, maybe a bottom having been reached. The most notable candle is the Apr-June quarter where a hammer candle appears on strong but not exceptional volume. This current quarter's candle, while very young, is so far confirming the reversal implications.

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  2. finicky

    finicky Well-Known Member Silver Stacker

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    Eureka Moments: Is Australia's IT sector set to fire up?

    Comments Alan Kohler in video segment on the Nabtrade site:

    " .. might want to look at Australia's I.T services sector. After a rough couple of years life is finally starting to reemerge."
    Mentions takeover offer for Oakton (OKN) by global tech giant Dimension Data and anticipation that there are other candidates for acquisition (I thought maybe DWS?)
    See Oakton (OKN) daily chart by clicking thumb below.

    Also 'belt tightening' by govts and corporates can only last so long and 5 years into the 'under-investment cycle' old systems will soon need replacing.

    Also says management commentary from the sector is noticeably brightening

    Chart of DTL is still showing strength and move above 85c today seems significant while an eventual close above 1.05 would be decisive looking on the long term chart. However a pullback first should come soon?

    DTL 1 year daily
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    OKN 6 mth dly
    [imgz=http://forums.silverstackers.com/uploads/1893_okn.gif][​IMG][/imgz]
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    Has now reported, and Fy14 revenue is up 8.1% on FY13 but margin has shrivelled so that gross profit is down 3.0%

    As a high volume low margin business any reduction in gross margin hits bottom line earnings per share devastatingly and eps is down 38.0% to 4.89 cents

    Company points out that Return On Equity (ROE) is still strong at 22.4%, but this is roughly half its historical average.

    Book value is about .22, so at .75 share price it is at 3.4 x book value which doesn't seem steep for company earning that ROE, debt free, and with significant cash net of liabilities.

    Final fully franked dividend of 3.0 cents per share, bringing total FY14 dividend to 4.5 cents per share fully franked is a 6% yield on a 75c share price (8.5% gross yield)

    Guess it depend whether they can improve in FY15, but guidance is vague.

    Price gapping down and might turn out to be worse than a "pullback". If it can hold the 75c level it won't look so bad, that much decline was almost expected. Got my doubts now though as move is fast and violent. Could be .70 soon?

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  4. finicky

    finicky Well-Known Member Silver Stacker

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    Looks absolutely stuffed. Unbelievable. Long term chart looks worse. ASX 100 stocks for me from now on

    [​IMG]
     
  5. finicky

    finicky Well-Known Member Silver Stacker

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    Maybe emotion taking hold in prior comment. For a long term view I looked at the quarterly chart again (each candle = 3 months)
    From that very long term perspective Data#3 (DTL) does not look appalling yet, and the scenario of a long term bottom is still intact as a possibility.
    September's almost over and the last two quarterly candles taken together are still suggestive of a significant low imo.
    There's still a company here with significant cash, no debt, in a depressed sector due for cyclical upturn if you take Alan Kohler's view (above) as plausible.
    Paid dividend that is good yield (6% ff for fy14) against current 74c price while patient holders await the outcome. Dividend likely to be maintained I'd say.

    Disclosure: Holds
    Sentiment: Hold

    Quarterly chart: each bar = 3 mths
    [​IMG]
     
  6. Willow

    Willow New Member

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    Finicky, Thankyou for putting your thoughts out on display. It is always interesting to look back at this type of info and comparing it to a chart with hindsight.
     
  7. finicky

    finicky Well-Known Member Silver Stacker

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    DTL down early on release of H1 results and outlook, but recovered well as day progressed.

    Revenue up 1.8%, Profit and dividend up 40%, expenses up 6%, all compared H1FY14
    With dividend of 2.1c following a 3c final div paid in September, that puts the stock on a fully franked dividend yield of 6.9% over 12 months. That's the equivalent of about 9.8% in a bank account, but there's the risk to capital of course.
    'Average daily cash balance' stable at about $61m in spite of $8m spent on investment and acquisition.
    Sounds optimistic on recent acquisition and investment; says "pipeline of sales building strongly" for both.
    Some commentators have been arguing for forced pick-up in IT investment by government, community, and business after long period of inactivity.

    Three out of four successes mentioned for H1 FY15 are non government:
    AMP Macquarie Centre 5 year contract that might extend to other centres
    St John Health care - wide range of product and services
    British American Tobacco - shift to long term contract
    Queensland Govt - something about being on the Cloud panel for infrastructure.
     
  8. finicky

    finicky Well-Known Member Silver Stacker

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    Priced at 1.25 bid

    I'm guessing still close to a 6% div yield on today's price, as i am assuming consistent payout from profits.
    Not confident share price will maintain this recent gain however.
    DTL rises back to mid 30's return on equity (ROE) based on today's guidance.

    IT sector has had some opportunities lately, check SMS Technology chart (SMX).
    Good divvy payers

    Sentiment for DTL: maybe worth a look for yield hunters if it pulls back 10%

    MARKET RELEASE today

    Data#3 performance continues to strengthen
    FY16 NPAT expected to be between $13.0 and $13.5 million, an increase of
    approximately 25% on the previous year's $10.6 million
     
  9. finicky

    finicky Well-Known Member Silver Stacker

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    Wha..? That's an excerpt from my op in this thread - made 4 and a half years ago.
    Spam.
     
  10. finicky

    finicky Well-Known Member Silver Stacker

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    Volume in Data #3 Ltd (DTL) second highest in a decade today. Buyers feasting after the flight reaction to poor H1 update announcement made after market close Friday. However, as a couple of posters elsewhere pointed out, the announcement should have come as little surprise given Dec guidance and reassurance.

    19 Jan
    MARKET RELEASE
    Data#3 Limited
    1H guidance update

    Data#3 Limited (DTL) has advised that, subject to audit, the consolidated net profit before tax for the first half of the 2018 financial year is estimated to be approximately $4.0 million. This is consistent with the previous trading update released on 15 December 2017.

    So, as stated, consistent with 15 Dec guidance and no revision made of H2 and FY2018 guidance which in a nutshell was:

    The company expects the first half profit to be substantially lower than the prior year’s record first half result.
    The second half performance, however, is expected to be strong and the company’s full year expectation remains to achieve its overall financial goal for FY18, being to improve on FY17’s best ever profit result.
     

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