GXL Greencross Limited/ Veterinarians

[donnie]

Greencross looks like it could be abit like ABS Learning, its got the same sort of growth plans ahead.


Pets big business

TONY RAGGATT

02May07

A VETERINARY practice model which started in the dog heaven of Currajong is headed for the national stage.

The Greencross vet group managed under the skilful eye of award-winning business operator and vet Dr Glen Richards is going public and aims to list on the Australian Stock Exchange in the middle of next month.

Dr Richards and stockbrokers from Sydney firm Bell Potter Securities were in the city last night to launch the proposal to potential Townsville investors.

A prospectus offering shares at a $1 each and forecasting earnings of 9.4c per share in 2008 is due to be released later this week.

"I feel we are creating a vehicle that is going to be great for investors and great for our clients and patient care," Dr Richards said.

"The most important aspect is that it will also be a vehicle that is going to be great for our staff."

Greencross Veterinarians began when Dr Richards, the son of cattle and sheep graziers Neil and Sandra Richards from Richmond, bought the former Currajong veterinary hospital in 1994.

The business has since been developed into five Townsville practices and, in a management relationship with Dr Richards' colleagues in Brisbane, another 10 practices trading under the Greencross model and brand.

Under planned acquisitions, another 15 practices and a specialist veterinary centre are to be added to the group, providing a total of 31 outlets in Townsville, Brisbane, the Gold Coast, Melbourne and Adelaide, creating an enterprise estimated to be worth about $35 million.

Dr Richards said the Greencross brand would be launched nationally with plans to quickly add practices to the group.

"We plan to have 150 vet practices in five years," he said.

"There's over a thousand (practices) in Australia that fit our investment criteria with turnover of $800,000 or more per practice."

Dr Richards believed the timing was right to take the model to the market, with many practices owned by ageing vets looking for appropriate succession plans and with many of the vets graduating from universities, mostly women, without the cash or willingness to take on the $500,000 investment required for practices.

He said Greencross could provide the management expertise, equipment support and career paths the vets and their staff needed to get on with the job.

The group could also provide better supply chains and strike better margins for inventories which represent much of the practices' income.

Dr Richards is set to be managing director of Greencross Limited, based in Brisbane, with a board including Count Financial director Andrew Geddes, vet and Greencross Veterinary Hospitals director John Odlum and PetsFirst CEO Associate Professor Stephen Coles.

Greencross is looking to raise $11 million from the float, creating a group with a market capitalisation of $21.5 million and an enterprise value of $35.3 million.

A price to earning ratio for 2008 has been calculated at 10.7 per share.

If all goes to plan, Greencross will list on June 15 and will follow in the footsteps of another successful Townsville venture, 1300 Smiles Ltd, a dental practice management model paying good returns, which has expanded throughout Queensland since listing on the exchange about two years ago.

[Lizard]

Another little illiquid value stock worth a look.

As per above, listed veterinarian roll-up. Requires little capital to run (hence negative NTA should be okay while cashflow is positive). Like all roll-ups, there will be some dilution over time as shares are issued to acquire businesses. Currently GXL has low debt. Based on repeat of first half, looks to be on forward P/E of about 5.5 at 87cps. Paid a final 2cps div last year, although no div indicated this half. Positive cashflow. Manageable debt and $2.5m in cash. 16% growth in eps on pcp.

[Lizard]

Announced a Heads of Agreement for a material acquisition yesterday - expect to be finalised end of April. Will add a further 14 vet practices, taking numbers to 60.

Took a look through previous acquisitions - added around 50% more practices in the 2.5 years since listing and added 55% to revenues, 52% to NPAT over past 2 years, but only diluted equity by 12.5% more shares. Not bad for a roll-up. Some of it achieved through debt funding - debt levels almost doubled from $8.5m to $16.0m. However, still looks manageable.

Whether or not this acquisition turns out to be dilutory will depend on price and structure. However, based on history, it seems likely to be strongly eps accretive and I would expect it to push NPAT into the $5-$6m range on a FY basis.

Market cap still under listing value at $21m. Seems to be a few sellers around still though.

[Lizard]

Seems to be a few sellers around still though.

Recent selling seems to have dissipated. Now strong bid level at 85cps. Might be ready to resume uptrend.

[Lizard]

Just got around to opening my backlog of mail today and found a "shareholder discount card" which gives me 10% off at Greencross - could have been really useful if I'd lived in Oz, especially given the amount I've spent at the vets this year!

Now 92cps. Pretty happy with this one so far.

[contrarianinvestor]

Just got around to opening my backlog of mail today and found a "shareholder discount card" which gives me 10% off at Greencross - could have been really useful if I'd lived in Oz, especially given the amount I've spent at the vets this year!

Now 92cps. Pretty happy with this one so far.

I love animals but live in an apartment, hence no use for the card for me too. This is one of my favourite businesses, both in good and bad economic times. I hope management can manage this company's growth welll and not end up like ABC childcare with too much debt. So far it looks like they know what they are doing. The current price looks like good value. This investment has the potential to become a 10 bagger.

[Lizard]

Well after an initial brief run up, this one is back at 69cps and recently raised capital (plus shareholder spp that is unlikely to be hugely supported) at 70cps.

FY results is a bit lower than I'd have hoped for - seems to be a bit seasonal, as second half generally lower. However, they've still paid down a bit of debt and nothing too worrying in the accounts. Also note that the only expense that seems disproportionately higher second half is "other", coming in at $1.2m - I wonder if this is partly due to costs of the failed Babtec acquisition. With only about $0.8m NPAT in second half, it has certainly made a bit of difference. Combined with about $2m less revenue second half, this probably explains why first half profits don't extrapolate neatly.

Ignoring recent share issues to fund expansion in 2011, P/E is 6.2 and EV/EBIT about 6, so still seems cheap unless there is something more sinister going on than is apparent.

[Lizard]

GXL has now picked up a practice in Caloundra and about half of the Babtec owned clinics (the Melbourne half) that they were said to be acquiring earlier. Price looks fair, although some are not full equity, so it is not clear whether the EBITDA figures are equity accounted or assume 100%. However, based on logical reading, would suggest constant-operation result of $3.7m NPAT for FY11, or forward PE of 5.5 at current price (69cps) and presuming minimal dilution from the recent spp, but inclusive of 3.85m placement.

Taking all placement/dilution/acquisition/potential additional borrowing into account, I still figure these should be trading closer to $1/share.

Interestingly, a SSH was also filed today from small institutional buyer, JM Financial. Not sure how they managed to acquire 5% in about 3 weeks without moving the price, but well done to them anyway (there haven't been any SSH sellers disclosing, but perhaps a good chunk came from placement).

[Lizard]

Still have a few of these and am waiting with interest for HY result. All being well, I would have thought a decent increase over last year with various additions. However, share price has had the drip-drip water torture selling, so it's difficult to be too optimistic. By my calcs, forward P/E is about 5.7 at 68.5cps (presumes FY $3.8m NPAT).

Pays a div, but carrying a largeish debt facility c.f market cap.

[Lizard]

By my calcs, forward P/E is about 5.7 at 68.5cps (presumes FY $3.8m NPAT).

Result announcement included a forecast of $3.4-$3.7m NPAT for FY, although half year was slightly down (last year was a strong first half). Div is up and annual div total forecast at 6cps, so will make it a good yield.

I got the courage to pick up some more at 70cps prior to announcement when the selling lost pace and buy side firmed. Now sitting 87cps with a much healthier buy side, but still pretty illiquid. My valuation currently at $1.02, but if the share price can pick up to around or above, then more acquisitions may be possible with less dilution.

[percy]

Result announcement included a forecast of $3.4-$3.7m NPAT for FY, although half year was slightly down (last year was a strong first half). Div is up and annual div total forecast at 6cps, so will make it a good yield.

I got the courage to pick up some more at 70cps prior to announcement when the selling lost pace and buy side firmed. Now sitting 87cps with a much healthier buy side, but still pretty illiquid. My valuation currently at $1.02, but if the share price can pick up to around or above, then more acquisitions may be possible with less dilution.

Thanks for your update.I am sure you are right that strong SP will lead to more acquisitions.

[Lizard]

I got the courage to pick up some more at 70cps prior to announcement when the selling lost pace and buy side firmed. Now sitting 87cps with a much healthier buy side, but still pretty illiquid. My valuation currently at $1.02, but if the share price can pick up to around or above, then more acquisitions may be possible with less dilution.

Finally getting to that $1 mark that I valued at a few months back, after having announced some recent acquisitions, confirmed full year guidance at 12-13cps eps, and final div of 3cps to make total of 6cps. Also Open Briefing confirmed expectation of ongoing 15%pa eps growth. Still a little on the small and illiquid side to attract much institutional interest, otherwise could have looked for a re-rate to $1.80+ over next 12 months. However, with debt risk still haunting investor memories, $1.40 is probably more realistic to hope for.

[percy]

Finally getting to that $1 mark that I valued at a few months back, after having announced some recent acquisitions, confirmed full year guidance at 12-13cps eps, and final div of 3cps to make total of 6cps. Also Open Briefing confirmed expectation of ongoing 15%pa eps growth. Still a little on the small and illiquid side to attract much institutional interest, otherwise could have looked for a re-rate to $1.80+ over next 12 months. However, with debt risk still haunting investor memories, $1.40 is probably more realistic to hope for.

The highlight of to-day's Open Briefing for me was "APPOINTED AN ACQUISITION FACILITATOR".My goodness what I would give to have such a title.Lizard have you factored a FACILITATOR into your projections.? Must be worth an extra 5% growth.!!! What sort of employment history would you require.? What sort of references would you have.?

[Lizard]

Green by name, green by nature... someone using the opportunity to accumulate.

Probably should take it as a selling opportunity and free up cash for the real bargains that might emerge here, but I always find it impossible to sell my value stocks going into results season!

[percy]

Green by name, green by nature... someone using the opportunity to accumulate.

Probably should take it as a selling opportunity and free up cash for the real bargains that might emerge here, but I always find it impossible to sell my value stocks going into results season!

Be careful,you may be selling to "an acqusition facilitator".!!!!!

[Rodin]

Had a good writeup in the weekend Eureka Report. Still looks fairly cheap with BGF Equities forecasting FY11 EPS of 13 cents and FY12 EPS of 15 cents. Their price target is $1.45 (40% upside) which stills puts it on less than 10 times earnings.

[Lizard]

Result out today in line with previous announcement. Has run hard up to $1.22, which seems like fair value for now. Will be interesting to see if they look for more equity so their acquisition facilitator can keep shopping...

[Lizard]

Dropped back to $1.03 after going ex-dividend. Briefing today sparked a little interest, confirming they are well on track for at least a 15% increase in eps this year and planning 7cps in total divs.

They seem to be making a habit of communicating well and tackling the hard issues openly (free cashflow in a roll-up model, where the funding comes from and what gearing levels they are comfortable with/strategy for managing gearing etc, etc). Overall, they seem to be pushing the roll-up model as hard as they can without red-lining the rev-counter.

[mark100]

I grabbed a few today Liz. Been following for a while but this is the first purchase

[4be]

Dropped back to $1.03 after going ex-dividend. Briefing today sparked a little interest, confirming they are well on track for at least a 15% increase in eps this year and planning 7cps in total divs.

They seem to be making a habit of communicating well and tackling the hard issues openly (free cashflow in a roll-up model, where the funding comes from and what gearing levels they are comfortable with/strategy for managing gearing etc, etc). Overall, they seem to be pushing the roll-up model as hard as they can without red-lining the rev-counter.

What do you mean by a roll up model Lizard?

Cheers
4be

[Lizard]

What do you mean by a roll up model Lizard?

Cheers
4be

Hi 4be,

Just referring to the type of business that grows by acquiring existing businesses - often in the professional services sector. This sort of model has its peculiar risks - seen some spectacular failures - but can make good money for holders in the good patches.

[4be]

Hi 4be,

Just referring to the type of business that grows by acquiring existing businesses - often in the professional services sector. This sort of model has its peculiar risks - seen some spectacular failures - but can make good money for holders in the good patches.

Oh yeah cheers Lizard.

I am a holder of these since before divy. I am a pet owner so I know the cost involved in keeping them healthy! I like this company b/c of its growth but also defensive qualitys - debt does worry me abit tho. I contemplated getting out a few days ago b/c of the weak market and if greencross breaches 1.00 id be worried- i don't want to go down with the ship.

[Lizard]

Up 6cps to $1.35 today on no news. New high, I think. Not bad in this market.

[percy]

Up 6cps to $1.35 today on no news. New high, I think. Not bad in this market.

Very much enjoying the ride thanks Lizard.

[mark100]

I sold too early...don't like hanging around too long in this market

[Lizard]

Seems to be holding up well, but I have sold two-thirds at $1.40.

Still think they will be fine - and bearing in mind that the MD needs the s.p. at about $1.70 in around July (from memory) for his shares to vest...but planning to re-deploy funds elsewhere as the value gap has closed here.

[Lizard]

Strong result for GXL and forecasting $4.6 - $4.9m NPAT for the year (coming in at high end so far, but it can be a bit seasonal). Div up - now 4cps for the half.

MD should almost certainly hit his $1.77 s.p. target for July and 1st tranche of performance shares will vest... better go back and see what next year's target was... $2.40 from memory.

(currently $1.66)

[h2so4]

It seems to me they will do it easily. Looks like a much more profitable business now.

[Lizard]

Dropped back to $1.03 after going ex-dividend. Briefing today sparked a little interest, confirming they are well on track for at least a 15% increase in eps this year and planning 7cps in total divs.


I have to admit I'm surprised that a year later they are at $2.57, having achieved eps growth of 40%. It was a good ride and I got out at around $2.

They seem to be ticking along, running the model very well. However, the value gap that was evident last year has now closed, so the share price trend will have to slow. They're forecasting at least 15% growth in eps again this year - achieving 40% probably tougher off this higher base. If shares stay up here though, it may be worth either using an equity component in acquisitions or running a rights issue/cap raising to support future growth.

[h2so4]

Agree the value gap has closed, margins have dropped a bit but still a very profitable business. I think they will turn in another good year.

[Lizard]

I have to admit I'm surprised that a year later they are at $2.57, having achieved eps growth of 40%. It was a good ride and I got out at around $2.

They seem to be ticking along, running the model very well. However, the value gap that was evident last year has now closed, so the share price trend will have to slow. They're forecasting at least 15% growth in eps again this year - achieving 40% probably tougher off this higher base. If shares stay up here though, it may be worth either using an equity component in acquisitions or running a rights issue/cap raising to support future growth.

So, well if there is one share I keep kicking myself on, it is GXL, now at $7.16. If I'd held in there from my buy price at 69 - 85cps, I could have been counting the bags! Instead, I was out just below $2 and thought I'd done well.... Phaedrus would have had great pleasure in putting up a chart to humble my ego! :ohmy:

[percy]

So, well if there is one share I keep kicking myself on, it is GXL, now at $7.16. If I'd held in there from my buy price at 69 - 85cps, I could have been counting the bags! Instead, I was out just below $2 and thought I'd done well.... Phaedrus would have had great pleasure in putting up a chart to humble my ego! :ohmy:

You are not alone !!!!!

[blocker3]

http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by KW http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=406846#post406846)
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4517)


2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.

MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)

Attachment 4518 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4518)

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4519)

3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).

ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4520)

I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.



KW This is an excellent piece of information you have passed on .Thank You.

As I read your Post I recall what had happened to myself in the past .An example of this is with Greencross with my pre entered STOPLOSS. I knew that the instant share price crash happened for a reason but I could not pin it down.As a result my Stoploss triggered and I was wondering what the hell happen here and for what reason and so fast. ( ie 5 minutes)

Now after reading your post I can see why.

Snakes in the grass looking for a feast of cheap shares by suddenly dropping the share price of excellent shares like Greencross.

Then instantly buying in after the crash they caused.

You are the first person to state what I have suffered in the past with stoploss and I was wondering why beforehand.

Cheers for that once again



Last edited by blocker3 (http://www.sharetrader.co.nz/posthistory.php?p=445551); Today at 08:18 PM.

[blocker3]

This stock has taken a hit over the last few days and including myself.It has done me well in the past .Anyone else out there still holding also.?

[Entrep]

Legendary post by KW above!

[winner69]

Still trending up ....close to 10 bucks now

An acquisition announced the other day

[blocker3]

Still trending up ....close to 10 bucks now

An acquisition announced the other day

Yes winner69 so true.

When the share price was around the $2.50 mark my late Father in law encouraged me to buy GXL.So I did at soon after. Back then he said that it would be a $10.00 share.

He was so right.

Futher more this company is still growing. Where to next.....

[blocker3]

Did anyone else buy into the 15:1 share offer?

First time I used BPAY. Fantastic for only a $12 fee to buy shares

[Toulouse - Luzern]

Sydney Morning Herald today:

"The removal of David Jones will allow the entrance of vet group Greencross into the top 200."

Read more: http://www.smh.com.au/business/markets-live/markets-live-shares-up-gold-down-20140715-3bxu8.html#ixzz37Ump5UTG

[Toulouse - Luzern]

and the days move so far:

993.5 ¢ents (AUD)

+ 38.5 cents + 4%

15/07 13:20 AET

[blocker3]

Should be all go for the acquisition of City farmers tomorrow 17 July.

15:1 share offer was a great discount to buy into and a great way for GXL to raise money for this.

[blocker3]

If anyone wants a growth stock look no more, here it is.($2-$10 in around 2 years) and will continue to grow

Disc still holding

[winner69]

If anyone wants a growth stock look no more, here it is.($2-$10 in around 2 years) and will continue to grow

Disc still holding

Afr rave
http://www.afr.com/p/markets/seek_rea_among_tomorrow_blue_chip_jDNMc2Lf9LdIlhVB guYfOM

[blocker3]

Afr rave
http://www.afr.com/p/markets/seek_rea_among_tomorrow_blue_chip_jDNMc2Lf9LdIlhVB guYfOM

Great read winner69 . Thank you. So pleased to read about another ASX growth stock I have also. (GEM) G8 Education.

GEM and GXL are definatly growth stocks on the ASX (as with the other 8 in this article).

Cheers Blocker

[percy]

I wonder whether a lot of the shares they issued for acquisitions have come out of escrow?

[blocker3]

Looks like a bottom has been and gone.GXL now trending upwards,.....

[babymonster]

Is the HY report going to be disappointing? Big drop today

[winner69]

Chart since 2010 interesting

Done nothing wrong .....mostly up eh .....but one of those infamous Death Crosses a little while ago. Also failed to break through the 200ma when price tying to recover

Suppose al depends now on a good announcement

[babymonster]

Yes, recover a bit with double bottoms. Should go a bit higher.

[blocker3]

Is the HY report going to be disappointing? Big drop today

I think that GXL has had a upturn for the last week or so and profit taking has occurred on Friday.

Thoughts?

[blocker3]

Anyone else own? to make a +/- comment

[ratkin]

Chart looks a bit of a shocker

[winner69]

Chart looks a bit of a shocker

Sure does .....some way to go for this step down

You still doing point and figure charts

[babymonster]

someone saying it's a big head and shoulders pattern.. if that's case, not good...

[pedro.nz]

FY2015 Interim results Monday 23/2/2015

[blocker3]

FY2015 Interim results Monday 23/2/2015

Thanks for that info pedro.nz.
We shall watch this space

[winner69]

someone saying it's a big head and shoulders pattern.. if that's case, not good...

If big and head and shoulders pattern does that indicate share price back to 600 .... or even lower

All I know was that Death Cross was the sign to get out

[blocker3]

If big and head and shoulders pattern does that indicate share price back to 600 .... or even lower

All I know was that Death Cross was the sign to get out

I understand that the death cross is when the 50 day moving average crosses over with the 200 Day moving average.

Going by the chart that happened around the end of Nov 2014

Results are due 23.02.15. I am not selling now.This is a well managed company.

[babymonster]

good result i think, profit down is taking into account the acquisition cost. Not sure it meets market expectation tho.. the thing i like most is the outlook for 2H2015 is good..

[blocker3]

good result i think, profit down is taking into account the acquisition cost. Not sure it meets market expectation tho.. the thing i like most is the outlook for 2H2015 is good..

I am happy with today's results babymonster. (I had stuck with GXL on it's recent share price decline as I believed in the company)

This is still shown in the " Future Outlook" on the bottom of the attachment.

http://www.asx.com.au/asxpdf/20150223/pdf/42ws31lx8lrbnx.pdf

Cheers

[babymonster]

I am just a bit worry they cash given they expand so fast. They might run out of cash and cannot pay their debt. Lol. Other than that I m happy. Looks like the 2H will be better.

I am happy with today's results babymonster. (I had stuck with GXL on it's recent share price decline as I believed in the company)

This is still shown in the " Future Outlook" on the bottom of the attachment.

http://www.asx.com.au/asxpdf/20150223/pdf/42ws31lx8lrbnx.pdf

Cheers

[blocker3]

Looks like overseas investers having a good go today. Great stuff

[NZSilver]

Ouch ! Hurting on this one....

[winner69]

If big and head and shoulders pattern does that indicate share price back to 600 .... or even lower

All I know was that Death Cross was the sign to get out

Babymonsters mentioned this head and shoulders. Ratkin just said the chart looks ugly.

That Death Cross was the big signal to take care (oh well lets say get out). That signal was reinforced when the price when recovering failed to breach the 200MA.

$9.00 looks a long way off now

GLX great little company with huge growth potential ....it's just that price gets way ahead of itself.

My plan ....keep watching and when the price rises from sub 6 bucks to 10 bucks or more clean up.

Just watch that squiggly line .....more informative than fundamentals at this stage.

[winner69]

Good day on the ASX today but not for GLX

Down to 682, a bit above th days low

Watching even more closely know to get a feel for punter sentiment (ie the squiggly line) and they tend to behave. Opportunity at sub 6 bucks?

[winner69]

I find the death cross to be a very late exit signal, I prefer the price dropping under the 200 day MA. In this case it would have you out at $8.50.

Plenty of other great companies in strong uptrends to invest in - no need to be stuck in a company where the price is falling. Put it on the watchlist, and if or when it recovers, you can buy back in (assuming that at that time it offers better fundamentals than any other investment opportunity out there).

The problem is that the market is really toppy at the moment - so it pays to be very careful about acting on sell signals as otherwise you might find yourself caught in a market correction with little opportunity to get out at a good price.

Agree a late signal but a good one for those with long term trades. In this case from $1.00 odd in 2011to a Death Cross at around $9.00 last November. Would have missed out on the last 10% odd. Disc, I was not part of the party.

But sub 600 to 1000 plus sometime in the future sounds good.

[percy]

I would be mindful that a great deal of acquisitions have been partly paid for, by issuing GLX shares to retiring vets who have sold their practices to GLX.
I guess there is escow on these shares,but I would think retiring vets would be looking at diversification,so is the weakness in the sp caused by these vets selling??

[winner69]

Close of 666 has a nice ring to it.

Maybe a sign that 555 might be a good entry

[babymonster]

A few days ago, when ubs become substantial holder I said to myself, s**t. Then it lost the 7.10 support without a fight. Now ubs has gone, and it is still going down. Might be its profit and margin are not as good as they predicted?
Dis: entry at 7.85. No going to top up yet...

[babymonster]

My mistake is entered at a head and shoulders.. A bit over confident.

[NZSilver]

I think they expect eps 36c, so currently trading at pe 18-19. But growth around 15% mark?? Seems good value but chart is ugly as stated above.

[babymonster]

does it do quarterly report? that might help...

[NZSilver]

Don't think so - a market correction all round by the looks (iron ore is bucking the trend today), plenty of potential here with gxl.... Just how low will she go? Sgh also hammered below rights price...

[winner69]

Don't think so - a market correction all round by the looks (iron ore is bucking the trend today), plenty of potential here with gxl.... Just how low will she go? Sgh also hammered below rights price...

Down another 3% today ..... getting closer to sub 6 bucks

Waiting patiently

[babymonster]

Shocking, shorters are back (or never left) and more drops on the way...

[winner69]

Shocking, shorters are back (or never left) and more drops on the way...

Big day today and back to 700 ....bugger

Maybe just have to wait a bit longer for 600 or less

[NZSilver]

What erratic share price movements. Sometimes you feel like such a little minion in game that is completely out of your control when investing.

[babymonster]

Yup, not sure where it will go next week.

[winner69]

Well 7 bucks didn't get pushed through

Overall bad market sentiment .... or punters sont really like GXL at the moment

Sub 6 bucks and I interested

[noodles]

What erratic share price movements. Sometimes you feel like such a little minion in game that is completely out of your control when investing.
On the contrary, you have complete control over your entries and exits. Have a plan and stick to it. Learn to keep emotions out of it.
This is a great book to help
http://www.amazon.com/The-Daily-Trading-Coach-Psychologist/dp/0470398566

[NZSilver]

Profit downgrade - blaming storms/wa/internal distribution problems - let's see if they are one offs. (however eps growth still 40%), acquired 3 clinics in Wellington for ebita 4x. I think they will be very aggressive with acquisitions over the next few years to get growth as it looks like the may not get much from existing portfolio. Approx 250 mil left in debt facility to fund growth. Currently on pe of 19-20.

[winner69]

Profit downgrade - blaming storms/wa/internal distribution problems - let's see if they are one offs. (however eps growth still 40%), acquired 3 clinics in Wellington for ebita 4x. I think they will be very aggressive with acquisitions over the next few years to get growth as it looks like the may not get much from existing portfolio. Approx 250 mil left in debt facility to fund growth. Currently on pe of 19-20.

Those 3 vet clinics in Wellington

Good news for shareholders .....most of the staff had to take pay cuts since being acquired ... and work harder

[winner69]

The 700 seems hard to break through doesnt it

I still waiting for low 6 something or even sub $6

And a couple of those staff who had pay cuts and told to work harder have left. Good riddance an good news for shareholders if that's the way they operate

[BlackPeter]

The 700 seems hard to break through doesnt it

I still waiting for low 6 something or even sub $6

And a couple of those staff who had pay cuts and told to work harder have left. Good riddance an good news for shareholders if that's the way they operate

Well - certainly an somewhat spectacular (and not so usual) picture: Just look at the volume density over the last 12 months or so. Many more shares traded during this period than anytime else over the last 5 years. This is not a market just breaking away, this is a real fight between bulls and bears:

7364

Not sure who will win this battle. I guess on the bulls side is a huge CAGR (admittedly most of it bought instead of grown) and a very interesting (non-cyclical) growth industry with a huge long-term potential. More and more elderlies and childless couples who have their pets as child substitutes and treat and pay for their care accordingly. They want to buy the best for their four legged family members - and are prepared to pay for that.

There was a time when pets with cancer could call themselves happy to be put down. These days some of them get cancer surgery and ongoing medication.

Remember last Christmas the long queues in front of one of the Animates shops. I wondered what was happening and went there, and saw that people queued up with their dogs to get a photo of their four legged darling with Santa. I am sure, that the good dogs have been allowed afterwards to pick as well a nice present in the shop.

On the bears side is a huge amount of "goodwill" on the balance sheet (actually - the balance sheet looks quite frightening, if we remove this one item), some recent management changes (did the ones in the know leave the ship?) and potentially a somewhat too aggressive growth strategy (which might have clouded managements decision making). I guess the jury is still out whether they paid too much for petbarn - and whether they established all these new vet clinics in wise locations.

Discl: still holding (potentially unwise) - and watching the epic battle with interest ....

[winner69]

BP, the OBV still trending down and not showing much divergence from price direction ....bears winning?

But that Williams thing suggest clogs to oversold territory

Takes your chance on the racetrack eh

I waiting for low 6 something .....might get there

[winner69]

BP, the OBV still trending down and not showing much divergence from price direction ....bears winning?

But that Williams thing suggest clogs to oversold territory

Takes your chance on the racetrack eh

I waiting for low 6 something .....might get there

Below 6 bucks .....getting interesting?hhh

[BlackPeter]

Below 6 bucks .....getting interesting?hhh

Interesting - certainly. Buying opportunity - maybe. Risky - dead sure. I did since my last post some more analysis and bought out of GXL (with the price still in the mid 610's).

My reasons: A not very sound Altman-Z score (2.3) and second thoughts about their ability to integrate a huge (and probably too expensive purchased) retail chain with an originally quite healthy vet business. I don't write them totally off (though I had to take some losses :crying:), but I think that at this stage that it first will get worse, before it might get better. IMHO is a further profit downgrade more likely than a positive surprise at reporting time. As well - their high valuation is only justified if you look at their huge (but historic) CAGR. Question is - where would future growth in the high double digits coming from? Other organisations started as well to round up vet clinics (driving the price up for everybody) and animal food you can buy as well in the next supermarket (keeping the margin's down for everybody - particularly in Australia, where they still have some real competition between supermarkets).

Discl: Enjoy the epic battle much more since I bought out ... but might be back if & when the PE better reflects a much reduced growth rate.

[babymonster]

yeah... i have to cut some lost on this one.. averaging down but still at high 6s... sold half at 6.05... hopefully after today, it can recover... good luck

[NZSilver]

Yes these roll up companies are taking a hammering - well out of market darling status + macro conditions aren't helping. I hold SGH, CAJ, GXL who are all growing profit, revenue and eps by acquisition. I thought these guys would have been pretty "recession" proof as underlying business day to day shouldn't change much.

[blocker3]

Yes these roll up companies are taking a hammering - well out of market darling status + macro conditions aren't helping. I hold SGH, CAJ, GXL who are all growing profit, revenue and eps by acquisition. I thought these guys would have been pretty "recession" proof as underlying business day to day shouldn't change much.

Yes they have had a hammering NZ SIlver. I also own these 3 shares and believe that they have been all oversold.GEM is another one I own and has taken the same flight path.

Good news yesterday however at last with a good base now to work from.Up 15 % yesterday and now also up 4% today.
http://www.asx.com.au/asxpdf/20150811/pdf/430f2q2q5z621z.pdf. Cheers

[Chaowee88]

Yes they have had a hammering NZ SIlver. I also own these 3 shares and believe that they have been all oversold.GEM is another one I own and has taken the same flight path.

Good news yesterday however at last with a good base now to work from.Up 15 % yesterday and now also up 4% today.
http://www.asx.com.au/asxpdf/20150811/pdf/430f2q2q5z621z.pdf. Cheers

Picked some up a couple of days ago. Couldn't ignore it as 2016 looks set to deliver approx 20% revenue growth which will equate to approx 770 million, so predicted NPAT for 2016 is 40 - 45 million? Equates to eps of 36 to 40. P/E of 11 - 12 times with room for further growth, I see good value but chart looks horrible.

[winner69]

Picked some up a couple of days ago. Couldn't ignore it as 2016 looks set to deliver approx 20% revenue growth which will equate to approx 770 million, so predicted NPAT for 2016 is 40 - 45 million? Equates to eps of 36 to 40. P/E of 11 - 12 times with room for further growth, I see good value but chart looks horrible.

Might just follow you one day

Months ago i said i might e interested in low 600's ....but has been steadily declining since eh. What is it now - yes $4.69

Still need to prove the business model so still full of risk.

If/when price recovers plenty of time to get on the bus. I would like to see a more positive looking chart before getting on board .....maybe with a 3 in front of it.

[BlackPeter]

Picked some up a couple of days ago. Couldn't ignore it as 2016 looks set to deliver approx 20% revenue growth which will equate to approx 770 million, so predicted NPAT for 2016 is 40 - 45 million? Equates to eps of 36 to 40. P/E of 11 - 12 times with room for further growth, I see good value but chart looks horrible.

Not so sure about this share. Might be really successful (if they manage to grow ad infinitum), but on the other hand - their balance sheet looks in my view quite sick. I reccon the market just feels they paid too much for their recent acquisitions in order to keep the growth going. Remember TTK? Different industry, but similar problem. Small company buying big company for a too high price.

Anyway - GXL has more than $500m intangibles on the balance sheet (most of it "goodwill"). Take that away and they are technically bankrupt. Now - ask yourself - is their name really worth half a billion dollars? I guess what they do is not rocket science (i.e. hardly any moat) - every supermarket can sell pet food (and they do) and independant Vets are as well plenty around. As well, little barrier to leave the nice GXL Vet who always tries to sell you on top for their service the overpriced dog rolls - and go back to your previous supplier.

Maybe still too much hype in the share price ...

[Chaowee88]

Not so sure about this share. Might be really successful (if they manage to grow ad infinitum), but on the other hand - their balance sheet looks in my view quite sick. I reccon the market just feels they paid too much for their recent acquisitions in order to keep the growth going. Remember TTK? Different industry, but similar problem. Small company buying big company for a too high price.

Anyway - GXL has more than $500m intangibles on the balance sheet (most of it "goodwill"). Take that away and they are technically bankrupt. Now - ask yourself - is their name really worth half a billion dollars? I guess what they do is not rocket science (i.e. hardly any moat) - every supermarket can sell pet food (and they do) and independant Vets are as well plenty around. As well, little barrier to leave the nice GXL Vet who always tries to sell you on top for their service the overpriced dog rolls - and go back to your previous supplier.

Maybe still too much hype in the share price ...

Mainly worried about it debt and Cashflow. Also wondering how long they can keep the momentum in growth going. Otherwise quite happy with the pick up. Maybe one day will trade like Domino's on a P/E of 50X?

[Leftfield]

Not so sure about this share.

Anyway - GXL has more than $500m intangibles on the balance sheet (most of it "goodwill"). Take that away and they are technically bankrupt. Now - ask yourself - is their name really worth half a billion dollars? ..

Agree…. IMHO the chart says it all…. stay away till the downward trend changes.

[Chaowee88]

Agree…. IMHO the chart says it all…. stay away till the downward trend changes.

http://www.afr.com/street-talk/financial-investor-raids-greencross-through-credit-suisse-20151214-glniuv

Boom 25% gain, lucky I picked another lot yesterday. Can have another fat lunch today.

[winner69]

http://www.afr.com/street-talk/financial-investor-raids-greencross-through-credit-suisse-20151214-glniuv

Boom 25% gain, lucky I picked another lot yesterday. Can have another fat lunch today.

Well done mate, hope you had heaps

Betcha even you didn't see that happening ......but when things get cheap you never know do you

[Chaowee88]

Well done mate, hope you had heaps

Betcha even you didn't see that happening ......but when things get cheap you never know do you

I won't sell yet as I believe there is still value to be had here, potentially this is the start of a bidding war.

I'm actually a bit disappointed in myself as I didn't have the conviction to go big.

I think $6 is still below it real worth which should be above $6.50

[winner69]

Greencross chatter on NZX made me look at Greencross AU

Price hasn't done much since it collapsed from its highs 18 months ago

Might have another look at but doesn’t seem to be compelling story here.

[winner69]

Greencross shareprice continues to drift down ....hard to believe it was 10 bucks not that long ago.

Still make decent profits but market a bit worried about what Amazon might do to them ...even though an online outfit called Pet Circle is apparently putting a big dent in their retail sales.

Commentators say taking over Pet Circle is the answer but it would cost them heaps and probably eps dilutive. Way the share price is going might be a takeover target themselves again.

Still keepin an eye on

[BlackPeter]

Greencross shareprice continues to drift down ....hard to believe it was 10 bucks not that long ago.

Still make decent profits but market a bit worried about what Amazon might do to them ...even though an online outfit called Pet Circle is apparently putting a big dent in their retail sales.

Commentators say taking over Pet Circle is the answer but it would cost them heaps and probably eps dilutive. Way the share price is going might be a takeover target themselves again.

Still keepin an eye on

Just another company with too much elusive goodwill on their balance sheet. They did grow by acquisition and paid in my view ways too much for City Farmers, weighing now heavily on their balance sheet.

They harvested in their purchasing spree a long time ago all the low hanging fruit - everything they now can buy would only further dilute their EPS.

Sure - they look still cheap if projecting past growth rates into the future, but if we assume that any growth from here will only reduce the EPS - what are they really worth? The current PE of 13.7 is probably still a bit dear ... and that's not even taking amazon's arrival into account.

Discl: used to watch, but never got myself to buy into.

[Filthy]

trading update today. https://www.asx.com.au/asxpdf/20180509/pdf/43twk0fq0d4nvh.pdf

massive overreaction by market - down 20%

probably a v good entry point for those looking to BUY both for a short term trade &/or for the long-term

[BlackPeter]

trading update today. https://www.asx.com.au/asxpdf/20180509/pdf/43twk0fq0d4nvh.pdf

massive overreaction by market - down 20%

probably a v good entry point for those looking to BUY both for a short term trade &/or for the long-term

Take care ... while markets tend to overreact - there is not guarantee that all bad news are now out for this company. They clearly lost their way and ways overpaid for many of their more recent acquisitions. From memory - there is a huge amount of quite questionable goodwill on their books. Allow this to disappear and they operate with negative equity.

[winner69]

So FY EBITDA about $100m .....means a shocker second half ...no wonder share price down 20%

Commentary says the old way of doing things has been wrong and no longer relevant and we need to do things a new way ....and we will organise all this in the next 3 months ....and FY19 will be honky dory

Yeah rate mate

I predict a series of not so good market updates over the next year ...or so

Punters go for it ....today’s price might be the low ...who knows

[winner69]

This paragraph says it all -

Mr Hickey noted “Given structural changes in the pet sector, we need to review our previous capital-intensive model of renewing the physical layout of stores and clinics and instead focus on customer centricity and profitability of the existing fleet. We will continue to backfill veterinary and other services into retail stores in strong catchments and to grow our footprint where we identify synergies with our existing network. However, going forward our immediate focus will shift more towards integrating technology into our existing offering in areas including omnichannel development, digital assets and data analytics, optimising our store and clinic footprint and improving the customer experience. As a result, the previously flagged high capital cost “store of the future” re-fit program is no longer a priority and has been cancelled.”

Will an already disenchanted market (shareprice drifting from $10 to $4 odd says so) believe All those buzzwords and rhetoric and think a quick turnaround is possible?

[kiora]

This paragraph says it all -

Mr Hickey noted “Given structural changes in the pet sector, we need to review our previous capital-intensive model of renewing the physical layout of stores and clinics and instead focus on customer centricity and profitability of the existing fleet. We will continue to backfill veterinary and other services into retail stores in strong catchments and to grow our footprint where we identify synergies with our existing network. However, going forward our immediate focus will shift more towards integrating technology into our existing offering in areas including omnichannel development, digital assets and data analytics, optimising our store and clinic footprint and improving the customer experience. As a result, the previously flagged high capital cost “store of the future” re-fit program is no longer a priority and has been cancelled.”

Will an already disenchanted market (shareprice drifting from $10 to $4 odd says so) believe All those buzzwords and rhetoric and think a quick turnaround is possible?

NO I DON"T!A ship more than half sunk is incredibly hard to turn around including staff morale.Staff will be very demotivated about now in my view.Sad tale.

[Filthy]

no disagreement that it was a bad trading update. 97-100 rather than guidance of 107-110.

various impairments, labour & OPEX review. & yes might still be more to come

....was it -20% bad though? pointing out that there was still moderate sales growth in the ann.

new CEO just clearing the decks and stamping his mark eh.

will take a look at goodwill - TY BP

[winner69]

Hasn’t recovered much has it

Greencross now a pariah of the ASX .....punters given up on them I reckon

Only one way share price can Head now over the next few months

[Filthy]

up 9% from the low though

[Leftfield]

up 9% from the low though

Don't get your hopes up.... chart looks v ominous. Death cross and all. GLH.
(Disc not holding just observing.)

[BlackPeter]

Don't get your hopes up.... chart looks v ominous. Death cross and all. GLH.
(Disc not holding just observing.)

would agree - terrible looking chart and upwards momentum already stalling!

[winner69]

All over rover for Greencross on ASX for a while with shareholders saying $5.55 from TPG a pretty good get of jail card. Probably float again in a few years time.

Long way down from the highs of $10 odd though but was good to me while the hype around all the debt fueled acquisitions created all that ‘growth’

Championing market consolidation by acquiring small players often ends like this ....like Abano in NZ heading that way

[winner69]

All over rover for Greencross on ASX for a while with shareholders saying $5.55 from TPG a pretty good get of jail card. Probably float again in a few years time.

Long way down from the highs of $10 odd though but was good to me while the hype around all the debt fueled acquisitions created all that ‘growth’

Championing market consolidation by acquiring small players often ends like this ....like Abano in NZ heading that way

Doesn’t seem to be floated again but probably have market exposure through EBOS