Diligent Boardbooks IPO

[Balance]

Brian Henry pleads guilty to market manipulation.

The irony is that he sold most of his shares at under $1.00, and in fact, most of them under 50c.

[MAC]

Brian Henry pleads guilty to market manipulation.

The irony is that he sold most of his shares at under $1.00, and in fact, most of them under 50c.

Yes, well it’s just absolutely appalling isn’t it, particularly for a former chief executive, and particularly for a former chief executive of a board member governance software company who's marketing strategy relies on the portrayal of good board governance.

http://www.scoop.co.nz/stories/BU1408/S00266/brian-henry-admits-market-manipulation-charges-fined-130k.htm

Edit: I think he got off very lightly with a $130k fine, sends a message to others that you may manipulate for millions with only the risk of a slap with limp lettuce.

[winner69]

Be funny if they have the webcast before they release the numbers

[winner69]

6 minutes to go

Hey mate ....add another 50 to those new customer numbers. Quick now I did say 9am New Zeeland time

[winner69]

C'mon mate, I promised 9 am

Boss, the lines are down to new Zeeland

But I did that last minute adjustment

[winner69]

They been up on the SEC site for a while

Great news 35% up

[winner69]

The growth in total revenues of $10.1 million or 35% for the first half of 2014 when compared with the first half of 2013 is primarily the result of the increase in new users, as well as our customer retention rate. Our customer retention rate continues to exceed 95% for the trailing twelve months ended June 30, 2014. At June 30, 2014, the total number of users was 82,666, compared with 72,632 at December 31, 2013, and 64,023 at June 30, 2013. The growth rate in new sales decreased in North America and EMEA (Europe, Middle East and Africa), and increased in Asia/Pacific with North America accounting for 60% of the dollar value of new subscriptions added in the first six months, EMEA (Europe, Middle East and Africa) accounting for 21% and the remaining 19% from Asia/Pacific. Additionally, upgrades from existing customers, which represents the increase during the period in the value of existing agreements, decreased 13% compared to the six months of 2013, based on the dollar value added to existing annual contracts.
We recognize subscription revenue ratably over the contract period, which is generally twelve months. Accordingly, the majority of impact of the growth in new user subscription agreements will be recognized over the next twelve months.

[Balance]

W69 - do you ever consider (seriously) whose fault it is when results and announcements are not made (and/or) posted on time on the NZX?

Clues - think LPC, AWE, NZO etc etc.

[Whipmoney]

The growth in total revenues of $10.1 million or 35% for the first half of 2014 when compared with the first half of 2013 is primarily the result of the increase in new users, as well as our customer retention rate. Our customer retention rate continues to exceed 95% for the trailing twelve months ended June 30, 2014. At June 30, 2014, the total number of users was 82,666, compared with 72,632 at December 31, 2013, and 64,023 at June 30, 2013. The growth rate in new sales decreased in North America and EMEA (Europe, Middle East and Africa), and increased in Asia/Pacific with North America accounting for 60% of the dollar value of new subscriptions added in the first six months, EMEA (Europe, Middle East and Africa) accounting for 21% and the remaining 19% from Asia/Pacific. Additionally, upgrades from existing customers, which represents the increase during the period in the value of existing agreements, decreased 13% compared to the six months of 2013, based on the dollar value added to existing annual contracts.
We recognize subscription revenue ratably over the contract period, which is generally twelve months. Accordingly, the majority of impact of the growth in new user subscription agreements will be recognized over the next twelve months.

Yeah great news on the sales front and they now have $72m NZD cash in the bank and close to $7m FCFF for the quarter.

[Balance]

Until DIL starts paying a dividend, or initiates a buy back, neither of which are acceptable to the current Board, what else do you have other than capital growth to look forward to as a shareholder? Steady-as-she-goes at $4 for months on end sure wouldn't cut it for me! Do enlighten me if I'm missing something here... :)

Results are out, Moose.

Let's have your view before the markets open - commentary made after the market opens and the sp has moved is simply your view reflecting that of the market, not your view.

[winner69]

W69 - do you ever consider (seriously) whose fault it is when results and announcements are not made (and/or) posted on time on the NZX?

Clues - think LPC, AWE, NZO etc etc.

Yeah nzx not very efficient eh

[fiasco]

Operating Expenses still appear to be increasing significantly, 24,884 (6 months ended, 2014), 17,745 (2013)

[winner69]

Yeah great news on the sales front and they now have $72m NZD cash in the bank and close to $7m FCFF for the quarter.

FCF 5.4m in 1st quarter ....only 1.2m in 2nd quarter (DIL numbers)

See they finally got away from touting new customer numbers, good move

[Whipmoney]

FCF 5.4m in 1st quarter ....only 1.2m in 2nd quarter (DIL numbers)

See they finally got away from touting new customer numbers, good move

Apologies, I now see that this is a 6 month figure.

Q2 expenses were up significantly due to "non-recurring" expenses relating to the re-negotiated contract with the CEO and exit costs for one of the staff members (CFO / previous CFO?). OPEX is expected to decrease as a % going forward now these costs are accounted for.

R&D was $1.5m for the quarter and is expected to grow as a % of revenue going forward as they ramp this up. Sodi hinted at products in their "pipeline" being close to completion.

[Tony Two Gloves]

And were off.....

[sharp]

That was very positive.

[Balance]

That was very positive.

As evidenced by sellers all fleeing from the scene.

Milford is going to have hell of a time trying to get back in. :D

[Blue Horseshoe]

Not many duck's lining up for this stale bread.

[Balance]

Not many duck's lining up for this stale bread.

Exactly - ain't no ducks here. They are all there in Snakk's holding pen or already choked full of Snakes. :D :D :D

[Tony Two Gloves]

Sorry guys, been busy up til now.

Balance, I'm exactly where I was pre this announcement.

Growth still slowing, revenue absolutely as expected, margins still getting thinner and new client numbers suspuciously absent. Even the forecast is uninspring.

I see volume is thin as hell. 1 or 2 day bounce at most as sellers try to get the ducks in line followed by a further slamming of the SP.

As I have repeated umpteen times, until we see a) GROWTH, b) a dividend or c) expanding margins, DIL will be stuck here or worse...

Guess your a glass half empty type of guy Moosie.........

[Whipmoney]

Sorry guys, been busy up til now.

Balance, I'm exactly where I was pre this announcement.

Growth still slowing, revenue absolutely as expected, margins still getting thinner and new client numbers suspuciously absent. Even the forecast is uninspring.

I see volume is thin as hell. 1 or 2 day bounce at most as sellers try to get the ducks in line followed by a further slamming of the SP.

As I have repeated umpteen times, until we see a) GROWTH, b) a dividend or c) expanding margins, DIL will be stuck here or worse...

a) We are seeing growth and it has been surprisingly healthy.
b) Why would any growth company pay a dividend when they positive NPV projects they could undertake, whether product development or acquisitions (this explains their R&D)?
c) Their absence of expanding margins is defined by point (b) above... R&D.

There's no way I can see DIL getting worse as they are a positive cash-flow generating company, their rate of accumulation is increasing, their cash-pile is increasing and therefore their options are ever increasing.

Final note: Just because they haven't opted for dividends now this doesn't preclude them from paying these in the future....

[MAC]

A reasonable result for Diligent, with revenue guidance maintained or a smidgen thereabouts above.

It used to be that you could pick up a DIL quarterly report and the summary figures were clear and at your fingertips, graphical even, now I seem to have to get the abacus out and derive the information I’m looking for and to check if annualisations are off reported or reinstated accounts.

Not sure if I’m alone in this matter and a different reporting format shouldn’t in any way dent investor confidence, but given the recent accounting history of the company one would think they would try and make it straightforward.

How many new customers was that for the quarter ?

DISC: DCF Valuation $5.80 (no change)

[goldfish]

I want to know the customer numbers to, why wasnt they included any idea? Are they that bad or is there a genuine reason?

[Whipmoney]

I want to know the customer numbers to, why wasnt they included any idea? Are they that bad or is there a genuine reason?

My take is that the customer numbers of probably quite low however they have (and hopefully the market will) realised that customer numbers aren't really that meaningful, particularly when one customer group (e.g. the hospital group they signed) has over 500+ users.

Users numbers are everything as they this is how they price their customers. I think user number growth was around 7.1% for the quarter which is good.

In a pragmatic sense I would rather they sign one customer with 500 users than 300 customers with 1 user.

[Balance]

Just calling it how I see it!

Good on you!

Don't let the sp determine your view - let your view determine whether you buy or sell a stock.

[winner69]

I must be seeing different numbers if you all believe DIL is growing (stronglyf)

Cash in the till, (ie reported revenues plus change in deferred revenues) trend last 4 quarters is $23.4m in 13Q3 then $23.1m then $21.1m and this quarter $21.0m. That to me, even with rosé tinted glasses, is not showing increasing sales

Guidance is next 2 quarters revenues about $21m .....growth?

Seem to stuck in a sustained flat patch to me ......compounded by increasing expenses and diminishing cash flows (the mountain of cash not growing that fast)

Or do I see something different from ou guys?

[Balance]

I must be seeing different numbers if you all believe DIL is growing (stronglyf)

Cash in the till, (ie reported revenues plus change in deferred revenues) trend last 4 quarters is $23.4m in 13Q3 then $23.1m then $21.1m and this quarter $21.0m. That to me, even with rosé tinted glasses, is not showing increasing sales

Guidance is next 2 quarters revenues about $21m .....growth?

Seem to stuck in a sustained flat patch to me ......compounded by increasing expenses and diminishing cash flows (the mountain of cash not growing that fast)

Or do I see something different from ou guys?

W69, last quarter and half year were clean out accounts - all the rubbish from the accounts restatement.

Commentary about future is very positive so it is a question of whether you believe them or not.

[winner69]

W69, last quarter and half year were clean out accounts - all the rubbish from the accounts restatement.

Commentary about future is very positive so it is a question of whether you believe them or not.

Yes, but I was only really only looking at how much cash going in the till each quarter .....and it seems pretty flat to me and I really trying to look forward here.

Yes positive words this morning ....but forecast revenues not much to write home about are they. Each quarter this year going to be $20m-$22m.Slow and steady.

Future all depends on new whizz bang product. And at today's shareprice I don't feel there a free option on that either

[Balance]

Yes, but I was only really only looking at how much cash going in the till each quarter .....and it seems pretty flat to me and I really trying to look forward here.

Yes positive words this morning ....but forecast revenues not much to write home about are they. Each quarter this year going to be $20m-$22m.Slow and steady.

Future all depends on new whizz bang product. And at today's shareprice I don't feel there a free option on that either

Agree that days of exponential growth in revenues are over - it is steady growth now and 20% y-o-y growth is nothing to be sneezed at.

Watching now for other products to come on stream to boost sales growth.

Meanwhile, profits would have doubled but for the reinstatement costs. To me that was always going to be the story of DIL like Sky TV, post exponential sales growth.

"Adjusted EBITDA is calculated as operating income plus depreciation and amortization expense, stock based compensation, costs associated with the investigation and restatement of our historical financial statements, and other costs, such as the CEO’s replacement awards and restatement bonuses."

[Carpenterjoe]

I have to admit, I'm a little disappointed about the client numbers being omitted. I expect they are disappointing maybe around the 30-50 mark.

Is it possible they are controlling growth to maintain a quality product to the consumer? and in return landing bigger fish.

I was hopeful the Microsoft product was going to get a mention and its impact highlighted.

If User number are the new growth measure, then 22.2% increase in growth in one quarter, is pretty great. (Q1 +4500 users Q2 +5500users)

I'm having trouble putting a dollar value on each user? Any ideas?

Seems like the cash is being thrown around, hopefully the old saying "ya gotta spend it to make it" is true.

No mention of the public to private client ratio. Not sure this matters, but it could help indicate where the future growth will be.

Whats up with another office opening in Charlotte? is this big plans for the future? Our big flash new office in New York won't be big enough in ten years?

Currently I'm a happy shareholder

[winner69]

carpenterjoe:I'm having trouble putting a dollar value on each user

Each new user seems to front up with about $1,400 pa in cash. Then some of this ends up in 'deferred revenues'

[Whipmoney]

Yes, but I was only really only looking at how much cash going in the till each quarter .....and it seems pretty flat to me and I really trying to look forward here.

Yes positive words this morning ....but forecast revenues not much to write home about are they. Each quarter this year going to be $20m-$22m.Slow and steady.

Future all depends on new whizz bang product. And at today's shareprice I don't feel there a free option on that either


The fact is that company is growing at a healthy rate and will likely continue to do so over the next few years particularly as they focus on new markets / verticals.

With regard to opportunities for additional (e.g. higher than 20% p.a. growth) then you're partly right in that it all comes down to the development of a new product. Alex Sodi hinted in the phone conversation that they were still working on a new product (which I believe they/he had previously referred to in his last call?) and mentioned that the pipeline is looking good. The rollout of their product development facility in Charlotte with ~30 or so full-time developers is a sure sign that they are investing in future products/developments and growth.
Whether this is a whole new product or speeding up the development of existing products in the pipeline is yet to be seen. I would hope that spending of $1.5m in R&D per quarter would eventually bear some fruit.

Another opportunity that hasn't been ruled out is that they could acquire a small/medium sized competitor. With over $61m USD in the kitty and a strong cash-flow (which they could borrow against) would allow them to buy a decent sized company, and convert its client book to Boardbooks. Whilst this may be costly up-front this would provide them with a quick avenue for client growth and it seems there is capacity in their company given the new premises and increases sales & support teams.

Despite the slowing (albeit strong) sales growth, decline in SG&A (mostly due R&D once accounting for an increase premises e.g. capacity, and non-recurring expenses) I still think this company has a bright future and a lot of options on the table.

[winner69]

Agree that days of exponential growth in revenues are over - it is steady growth now and 20% y-o-y growth is nothing to be sneezed at.

.

Tracking rolling 4 quarter sales and cash receipts throws up a pretty consistent growth rate decay factor.

Over the year or so annual growth rates have decayed ( declined) by 20% each quarter (only plus/minus a couple of % points). Using DIL guidance for Q3 and Q4 that growth decay rate remains in place. This means the annual revenue / cash receipts growth rate at the end of any quarter is 80% what it was the quarter before. For instance at June annual growth rate was 43% compared to 53% at March.

Using DIL guidance revenues will be $82m in FY14 (up 27% on pcp). A straight extrapolation using that 80% growth rate decay factor for the 4 quarters of next year gives FY15 revenues of $92m (up 12% on pcp)

Seems that we have almost reached Balance's state of SKY like maturity.

Yes Whipmoney ...a new whizz bang product or an acquisition is needed to boost growth to justify current shareprice.

At 432 I don't see that offering a FREE option on that product.

Good product. Still interested in having another go making heaps of money on DIL. Just trying to take the rhetoric and see where all the positive talk is coming out in the numbers and here I am really struggling.

Never mind ..probably need to wait another nine months before making any judgement because guidance for 15 isn't that exciting

[winner69]

Carpenterjoe. Further to that $1,400 for each new user that was for the average over the last 4 quarters.

My trusty spreadsheet of DIL numbers suggest that the actual number for the June quarter was only about $750.

These new customers with 50 users getting a decent discount off the norm?

Just thought you might be interested ....funny what turns up when you regurgitate the numbers provide by quarter and when bored play around with them. A few other things 'pop' out as well as exceptions to the 'norm'. Thinking about they mean. Hope Milford guys and their analytical skills and no doubt a bit more inside information aren't doing the same sums ....might turn them off.

[Whipmoney]

Quick question. Whose been doing the recent options conversions? And are they from the Spring Street backlog of circa 40M or are they newer employee options?

New employees I think..

[Carpenterjoe]

Carpenterjoe. Further to that $1,400 for each new user that was for the average over the last 4 quarters.

My trusty spreadsheet of DIL numbers suggest that the actual number for the June quarter was only about $750.

These new customers with 50 users getting a decent discount off the norm?

Just thought you might be interested ....funny what turns up when you regurgitate the numbers provide by quarter and when bored play around with them. A few other things 'pop' out as well as exceptions to the 'norm'. Thinking about they mean. Hope Milford guys and their analytical skills and no doubt a bit more inside information aren't doing the same sums ....might turn them off.

Cheers Winner,

How confident are you that your figures are correct?
This link is old, but it gives a conflicting/different point of view

http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0CFAQFjAG&url=http%3A%2F%2Fwww.greatboards.org%2Fpubs%2FBoar d-Portal-Buying-Guide-final.pdf&ei=tZboU9K4FcXhoASjwIL4Bg&usg=AFQjCNG-Ul3slVD1GEgo-2xe4JGltNUCPQ

Are we even sure they charge per user?


Joe

[winner69]

Cheers Winner,

How confident are you that your figures are correct?
This link is old, but it gives a conflicting/different point of view

http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0CFAQFjAG&url=http%3A%2F%2Fwww.greatboards.org%2Fpubs%2FBoar d-Portal-Buying-Guide-final.pdf&ei=tZboU9K4FcXhoASjwIL4Bg&usg=AFQjCNG-Ul3slVD1GEgo-2xe4JGltNUCPQ

Are we even sure they charge per user?


Joe

Mathematically really confident, in practice no idea

Just taking the increase in revenues / cash receipts and dividing by increase in number if users over quarters as well as rolling quarters to smooth out timing etc.

Sparky used to use this methodology based on client numbers so must be ok. On a client basis the number appeared to be $35,000 odd. But now not telling us client numbers anyway

Somebody said user numbers is a better number anyway. Your link does suggest that there are some 'free' users anyway under the umbrella of a lent pricing structure.

What the last quarter numbers do suggest a largish discount of sorts for big new customers like this 500 user hospital.

[Harvey Specter]

how the hell did habour manage to buy another 1% of this tightly held stockPretty sneaking. Accumulating while the price is weak and not even impacting the market.

[winner69]

how the hell did habour manage to buy another 1% of this tightly held stock

About 6 million shares traded in that time ....so they took 15% of them

Does this say DiL not really in demand except for people like Harbour.

DIL still unloved and unwanted by the masses? On the last results not surprising

[MAC]

About 6 million shares traded in that time ....so they took 15% of them

Does this say DiL not really in demand except for people like Harbour.

DIL still unloved and unwanted by the masses? On the last results not surprising

I's an equation for wealth transfer from short to long that we are seeing on a few NZX growth stocks now. Long may the opportunity continue.

[Balance]

Pretty sneaking. Accumulating while the price is weak and not even impacting the market.

And continuing to accumulate?

[Monty]

Has anyone seen the half year report on the nzx website. I haven't read it yet and came here looking for people who had read it so I don't have to.

[Monty]

Maybe the guys who can read and analyse the results are doing other things. Or maybe the results are so mundane and boring that they are not worth commenting upon. I am reviewing now and there really don't seem to be anything worth writing home about

[KiwiGreen]

Yeh results are decent - as expected.

I would really like to see a noticeable jump in revenue attributed to the windows offering soon. Currently I would hold my personal valuation at around $5.2-5.4 (fully diluted). That's not advice.

They should be looking to increase margins now. People have been suggesting that because they are making so much cash they are getting a bit loose with costs. I agree with this. Their margins could be better. I personally believe the time has come to bring in some new experienced faces to help the general running of the business. At the same time the geniuses that built this product of course still need to be kept on board to manage the innovative side of the company - just get them out of general business operations etc.

In the next two years I am looking for:
Listing on a US (or London) stock exchange.
Experienced directors brought in to help guide the company as it continues to grow at still quite remarkable rates.
A second product that can leverage off of DIL's networks and the huge credibility it has earned internationally.
I would be very happy if they could continue to grow revenue at the current 35% rate, that would certainly add 2 or 3 dollars to my valuation, but they will need a new product to do so I feel.

[Harvey Specter]

Good summary KiwiG.

I think they need a consolidation period after all there stuff ups but will soon need to answer

What they are going to do with the cash
How they are going to keep growing at 30%+

They must have some plan, otherwise why are they growing costs. The good old days when we could trust that they had everything under control are unfortunately over.

[Carpenterjoe]

Yeh results are decent - as expected.

I would really like to see a noticeable jump in revenue attributed to the windows offering soon. Currently I would hold my personal valuation at around $5.2-5.4 (fully diluted). That's not advice.

They should be looking to increase margins now. People have been suggesting that because they are making so much cash they are getting a bit loose with costs. I agree with this. Their margins could be better. I personally believe the time has come to bring in some new experienced faces to help the general running of the business. At the same time the geniuses that built this product of course still need to be kept on board to manage the innovative side of the company - just get them out of general business operations etc.

In the next two years I am looking for:
Listing on a US (or London) stock exchange.
Experienced directors brought in to help guide the company as it continues to grow at still quite remarkable rates.
A second product that can leverage off of DIL's networks and the huge credibility it has earned internationally.
I would be very happy if they could continue to grow revenue at the current 35% rate, that would certainly add 2 or 3 dollars to my valuation, but they will need a new product to do so I feel.

Cheers kiwi

I do agree this stock is undervalued.

I strongly dis agree that this is the time to start penny pinching. One of their sectors is growing at 70%, to handle that sort of growth you don't want to be worried about expenses.

I agree the time will come when this company needs to become more efficient. This should happen once growth becomes stagnated and their product is selling in every country.

I feel your statement contradicts itself, hire new faces but cut costs? But I can see where your going.

Their operating expenses are at roughly 25million Pa, how much do you think U can save without causing damage to their reputation with the customers/directors? every customer lost now could costs them two fold if and when a new product is offered.

Just my thoughts before I go work in the rain.

Joe

[Baddarcy]

In the next two years I am looking for:
Listing on a US (or London) stock exchange.
Experienced directors brought in to help guide the company as it continues to grow at still quite remarkable rates.
A second product that can leverage off of DIL's networks and the huge credibility it has earned internationally.
I would be very happy if they could continue to grow revenue at the current 35% rate, that would certainly add 2 or 3 dollars to my valuation, but they will need a new product to do so I feel.

New product of sorts does appear in the pipeline still.....thou it feels like the pipeline doesn't actually have an end, we've been saying that for some time now.. Quote from the Half Yearly.

"Diligent’s growth plan for the second half of 2014 and beyond is clear. First, we will continue to penetrate new market
opportunities in our more established markets. Next, we intend to expand into new geographies while continuing to
deepen our penetration in those markets where we have a growing presence such as Europe and Asia. Finally, we will
accelerate our R&D investments to further expand the capabilities of our existing products and to develop new
complementary products. Consistent with this last initiative, we recently announced the opening of our new Charlotte,
North Carolina development center in the second quarter."

[Monty]

the earning per share is according to the NZX website $0.085. but there is also a substantial cash in bank of $62m and assets of $87m. by the end of the year cash in bank assuming they just accumulate will be close to $80m and assets at over $100m.

can someone break this down to what is the potential share value based on revenue and how the asset backing of the share impacts on price. And the justification or science behind the particular multiplier used

[sharp]

https://www.nzx.com/files/attachments/200103.pdf

[Harvey Specter]

https://www.nzx.com/files/attachments/200103.pdfWell they got bitch slapped but they have plenty of cash to pay the fine.

[psychic]

That'll teach 'em.

[Banksie]

Well they got bitch slapped but they have plenty of cash to pay the fine.

So, as a shareholder I was at a disadvantage because they didn't report, now as a shareholder I am being fined for this. Seems awfully unfair.

[nextbigthing]

So, as a shareholder I was at a disadvantage because they didn't report, now as a shareholder I am being fined for this. Seems awfully unfair.

A lefty complaining about being taxed and that money going to other people. Ironic ;)
Merely a drop in the bucket for DIL though aye, carry on.

[Banksie]

A lefty complaining about being taxed and that money going to other people. Ironic ;)
Merely a drop in the bucket for DIL though aye, carry on.

Not sure that was called for NBT, this is not the political thread.

I know the amount is trivial but the point I was trying to make it that the system seems to be penalise the victim.

I suppose as shareholders it is now our responsibility to ensure those responsible take the rap. Loss of bonuses for all the execs this year?

[Whipmoney]

A lefty complaining about being taxed and that money going to other people. Ironic ;)
Merely a drop in the bucket for DIL though aye, carry on.

Stupid comment.. what are you... an extreme right wing nut?

He made a fair point.

[nextbigthing]

Stupid comment.. what are you... an extreme right wing nut?

He made a fair point.

Yeah excellent post whipmoney. It's this sort of sh!t that just lost us the Moose. It was mearly a light hearted jib with the point that it was a drop in the bucket.
But no well done. Keep it up and we might lose some more.

[klid]

lol. chill out!
This is all stuff that happened a long time ago and this was foreseeable a long time ago right?

[Whipmoney]

Yeah excellent post whipmoney. It's this sort of sh!t that just lost us the Moose. It was mearly a light hearted jib with the point that it was a drop in the bucket.
But no well done. Keep it up and we might lose some more.

Well I was being ironic but I guess you missed it..

Lol don't blame me for moosie, I've hardly been around so don't even know what happened.. besides I liked the kid.

[Baddarcy]

So, as a shareholder I was at a disadvantage because they didn't report, now as a shareholder I am being fined for this. Seems awfully unfair.

At the end of the day, it was the staff of DIL who stuffed up as well as the auditors who didn't notice the stuff up. The staff are the responsibility of the the CEO who is appointed by the Directors, who in turn are appointed by the shareholders. The auditor is also appointed by the shareholders....so seems fair enough to fine the company to me.

Boy...even 1 day later that wet bus ticket is still stinging ;-)

[Harvey Specter]

At the end of the day, it was the staff of DIL who stuffed up as well as the auditors who didn't notice the stuff up. The staff are the responsibility of the the CEO who is appointed by the Directors, who in turn are appointed by the shareholders. The auditor is also appointed by the shareholders....so seems fair enough to fine the company to me.

Boy...even 1 day later that wet bus ticket is still stinging ;-)The CEO, Directors and Auditors sign off on the accounts. Shareholders dont.

The CEO, Directors and Auditors have full access to any information they ask for. Shareholders dont.

But at the end of the day (Had to through that in since it is election time), if fines are to be born by Directors, they would just charge even more than they do know.

[longy]

That is just the way it is. Shareholders voted the directors in so ultimately shareholders could boot them out. So when they stuffed things up we all suffer. I thought $100K was a great deal (meaning got off lightly).

[Carpenterjoe]

Anyone keeping an eye on this chart? I believe its a good thing when or if the MA30 cross the ma 180?

[zigzag]

Anyone keeping an eye on this chart? I believe its a good thing when or if the MA30 cross the ma 180?

Probably more to do with the $US?/$NZ exchange rate.

[theace]

Some (good) news .... https://uk.finance.yahoo.com/news/diligent-named-finalist-customer-independent-102000368.html

[Crystal Ball]

Some (good) news .... https://uk.finance.yahoo.com/news/diligent-named-finalist-customer-independent-102000368.html
Great news, it all helps! This thread has been very quiet of late, Dil SP has been marching slowly but solidly upwards , long may it continue......

[hairofthedog]

Shhhh Crystal Ball, your comment just caused a 3.4% drop. :eek2:

[Crystal Ball]

Shhhh Crystal Ball, your comment just caused a 3.4% drop. :eek2:

Omigod, so it has, dropped like a stone .16 cents under open.
Must be a jinx, sorry I spoke !!
wonder why it took a dive like that......

[BFG]

Who has a red 2003+ model Mazda MX5 withe the license plate DIL NZX? You have been spotted.

[robbo24]

Who has a red 2003+ model Mazda MX5 withe the license plate DIL NZX? You have been spotted.

My guess is Roadrunner :D

[The Rocket]

The person who owns the Mazda with rego DIL NZX is Roadrunner who is loyal to the stock as we all know.:)

[Crystal Ball]

What's going on with Dil. Huge drop on Friday and now another big upswing ! Up to $4.79 ..... Weird, somebody knows something - Roadrunner ? You in the know?

[robbo24]

What's going on with Dil. Huge drop on Friday and now another big upswing ! Up to $4.79 ..... Weird, somebody knows something - Roadrunner ? You in the know?

Just someone trying to ensure that I am #1 on the NZX stock picking contest at the end of the week :D

[couta1]

What's going on with Dil. Huge drop on Friday and now another big upswing ! Up to $4.79 ..... Weird, somebody knows something - Roadrunner ? You in the know?
Don't get too excited very low volume.

[winner69]

And 5 bucks by week end I reckon

[Crystal Ball]

Just someone trying to ensure that I am #1 on the NZX stock picking contest at the end of the week :D

Well, robbi whatever the reason, it's finely me !!
And yes couta it is low volume but what is weirder, I just went to look at the depth- someone offering a parcel of 1,000 shares at $4.70, then jumps to $4.79. I really don t understand how that works......

[Crystal Ball]

And 5 bucks by week end I reckon

Absolutely hope so, about time it went up to where it should be !!

[longy]

I think given the history of movement of its SP, a few traders have their fingers on the sell button. The moment the SP dips..."Bang". However, I thought it was some profit taking and cause a little excitement then and as a member here has mentioned... the volume has been quite low.

[Roadrunner]

Who has a red 2003+ model Mazda MX5 withe the license plate DIL NZX? You have been spotted.

Haha!...yep its me,well spotted!A 2006,6 speed manual and a lot of fun, as confirmed by my mate The Rocket :) Im very happy with the way Diligent are going.The trend is back on the upswing in my view with the old base of $4,which I don`t expect to be revisited.I don`t think $5 will hold them back this time either and I`m guessing the climb will be steady and solid....Unless we get some news on new product/acquisition etc., in which case they will fly.I`m in for the long term anyway and have always thought of DIL as a quality company that would have been knocking on the door of $10 if we hadn`t had all of that fiasco over restatement.After a frustrating period for shareholders I`m hoping for happier times ahead.

[Whipmoney]

And 5 bucks by week end I reckon

Well it would be nice (particularly for lining my pockets) however I think it will be a slow and steady rise with a few more knock-backs to come.

It did look as though someone were accumulating last week as $4.65 kept getting tested by sellers and held firmly on good volume. The wind seems to have come out of her sails this week though and the volume has been low.

I would like to think it will be $5 by the end of October (by which time we will have the Q3 announcement).

Hopefully they've had some decent growth in the European markets and in new verticals in the US. Taking a bigger global-macro view, this stock is long on the USD (where its generates most of its revenues & the currency in which it holds its cash reserves) so the fall in the NZD (if sustained/maintained) should lead to a gradual rise in the SP.

[Crystal Ball]

Haha!...yep its me,well spotted!A 2006,6 speed manual and a lot of fun, as confirmed by my mate The Rocket :) Im very happy with the way Diligent are going.The trend is back on the upswing in my view with the old base of $4,which I don`t expect to be revisited.I don`t think $5 will hold them back this time either and I`m guessing the climb will be steady and solid....Unless we get some news on new product/acquisition etc., in which case they will fly.I`m in for the long term anyway and have always thought of DIL as a quality company that would have been knocking on the door of $10 if we hadn`t had all of that fiasco over restatement.After a frustrating period for shareholders I`m hoping for happier times ahead.

Like your style ( and your cup half full philosophy) Roadrunner !! :-)

[Mista_Trix]

I've only looked on yahoo finance, but we've got golden cross action going on!!

... but no trades :-S

[Jay]

Still no trades at 2pm - Strange - does someone know something - about DIL that is, not anything in particular

[Mista_Trix]

I myself have just got back in on the Golden Cross, been out since its down-trend, but happy that, that looks to be broken and has stabilised upwards.

I don't care about lack of movement.
I think with far too many companies on the NZX trending downwards at the moment, those that are undervalued and trending upwards are a rare commodity.

[Baddarcy]

I'm a bit of a novice on these sort of things but i thought a Golden Cross also needed some volume to go with it?

The volumes of shares traded per day dropped off in the second half of August and has stayed low ever since?

[Mista_Trix]

I'm happy with what appears to be pre-loading from May to September at expectation of the cross as the lines looked closer and closer.

It may bite me, but I'm happy to set and forget on this one, looking at the beginning of August, we're at the bottom of the channel formed upwards since then, so if it keeps drifting slowly up then I'm fine, I'll set some stops just in case.

Additionally, the MFI is high since that point and the money hasn't left yet.

[couta1]

Out of all my current heavy paper losses I'm carrying on tech stocks this is the one I'm lest worried about long term simply because they are the only one making a profit and sitting on a large cash pile.

[Jay]

Yes has been creeping up slowly. The time to buy in was around the 380-390 mark (Dec/Jan at is has turned out- came up about then on my scan for shorter term plays and would still be in). I didn't, already have enough and did not want to commit anymore to the sector,
Also holding on paper loses on this one at present, each week it has been getting less and less

[Roadrunner]

Looking forward to a good solid result on Tuesday and maybe some direction on how the push in europe is progressing with the new data centre etc.

[Crystal Ball]

Looking forward to a good solid result on Tuesday and maybe some direction on how the push in europe is progressing with the new data centre etc.

Hopefully it will push the price up, had a nasty slump on Friday ! Really annoying !!

[zigzag]

Looking forward to a good solid result on Tuesday and maybe some direction on how the push in europe is progressing with the new data centre etc.

Are you sure it's Tuesday? They didn't announce 2nd qtr results until early August. i know they used to provide an update on the second Tuesday of the month following the end of the quarter, but maybe they're not doing this anymore, and just sticking to the regulatory disclosures.

[Roadrunner]

Are you sure it's Tuesday? They didn't announce 2nd qtr results until early August. i know they used to provide an update on the second Tuesday of the month following the end of the quarter, but maybe they're not doing this anymore, and just sticking to the regulatory disclosures.

You may be right zigzag but I`m presuming they are reverting back to the old pattern of updates like they used to now that things are back to normal following the restatement.

[Monty]

You may be right zigzag but I`m presuming they are reverting back to the old pattern of updates like they used to now that things are back to normal following the restatement.

I really struggle to understand this share at times. I almost wonder if the directors no longer care that much about shareprice. A few weeks ago the share hit $4.76 and has since slumped circa 10% back to $4:30. Is there any rumour of some underwhelming news?

[MAC]

I really struggle to understand this share at times. I almost wonder if the directors no longer care that much about shareprice. A few weeks ago the share hit $4.76 and has since slumped circa 10% back to $4:30. Is there any rumour of some underwhelming news?

I think Monty, it’s a combination of value investors still discounting for accounting issue risk, and in their absence short termers being left to play with technical levels. That’s what is still keeping the SP well below valuation.

It’s hard to know what DIL can do to really bring full confidence back, I would have liked to have seen enough heads roll so as to demonstrate a fresh start to the market, but the bulk of those responsible for the restatement issues are still sitting in their same office chairs. It might be that a good confident strategic plan presentation for putting the cash pile to work might just do the trick.

I hope DIL can move forward somehow and satisfy all those still looking on cautiously. At an engineering level it is just such an innovative company, there is all the potential in the world.

[artemis]

I see a headline in NBR (article is behind the paywall) that DIL is the top tech stock pick of an analyst. Anyone know which analyst?

[Harvey Specter]

I see a headline in NBR (article is behind the paywall) that DIL is the top tech stock pick of an analyst. Anyone know which analyst?ForBar - Outperform - $6.05
First NZ - Outperform - $4.20 (assume this hasn't been updated in a while)

[zigzag]

ForBar - Outperform - $6.05
First NZ - Outperform - $4.20 (assume this hasn't been updated in a while)

Why would they then make it an outperform? I thought it more likely meant to read $5.20. Anybody dealing though FNZ know the correct figure?

[dingoNZ]

Why would they then make it an outperform? I thought it more likely meant to read $5.20. Anybody dealing though FNZ know the correct figure?

It an old valuation, they will update next month when the DIL update comes out

[artemis]

ForBar - Outperform - $6.05
First NZ - Outperform - $4.20 (assume this hasn't been updated in a while)

Thanks for that HS. Do you know if the ForBar one is very new? The NBR article seems to have been posted just today.

[iceman]

The NBR article quotes James Schofield from FNZ allocating " outperform" with a target price of $ 5.05. He also says that a NASDAQ listing or further product development could be a catalyst over the coming year, something that has been much canvassed on this thread !

[Monty]

I thought the first quarter financials would be out this morning. A little disappointed they are not. is there any news when the first quarter summary will be out ?

[dingoNZ]

I thought the first quarter financials would be out this morning. A little disappointed they are not. is there any news when the first quarter summary will be out ?


Late newt week I believe

[robbo24]

Things I like about DIL right now:

- Strengthening of the USD meaning that the cash pile is relatively bigger in NZD terms.
- RSI cross
- MACD cross and histogram rising
- DMI in a strong position, ADX line starting to move back up in line with SP increases
- OBV on the way up
- Break of long term 475 resistance this morning, next stop 490/500?
- Company with consistent growth and profits, much lower risk than other tech stocks

What I don't like in the short term:

- Fast and slow stochastics are maxxed out.


All in all, for what it's worth, DIL looks ok to me. Not that my opinion carries great weight :D:D:D:D:D:D

[Balance]

The knockers have all crawled back into their slimy holes?

[robbo24]

The knockers have all crawled back into their slimy holes?

What's to knock these days?

[Balance]

What's to knock these days?

Sp goes down, knockers come out.

Sp goes up, knockers disappear.

Lesson learnt? The knockers are your best contrarian indicators you are ever going to get - note their names!

[robbo24]

Sp goes down, knockers come out.

Sp goes up, knockers disappear.

Knockers out for the boys!! :D:D:D:D:D:D:D

[BFG]

$4.75 break and very thin volume looking very nice for e retest of $5.00. Looking for a higher high today.

[winner69]

Sp goes down, knockers come out.

Sp goes up, knockers disappear.

Lesson learnt? The knockers are your best contrarian indicators you are ever going to get - note their names!

Balance, when the 'knockers' buy cheap they usually shut up for a while ....and then reappear when one thinks its time sell to start raving how good things are and how it is still cheap etc

Isn't that the way the world works

[winner69]

That bloody moosie guy was a big DIL knocker.... I wonder if he has bought back in.

That bloody moosie guy deleted himself like the clown and belg and turmeric, couldn't hack it on sharetrader

So we will never know about bloody moosie buying back in ...I doubt it though

[Balance]

That bloody moosie guy was a big DIL knocker.... I wonder if he has bought back in.

He is back in.

[robbo24]

That bloody moosie guy was a big DIL knocker.... I wonder if he has bought back in.

Big knockers are always the best knockers imo

:D:D:D:D:D:D:D:D

[blobbles]

I was knocking DIL a bit. Based on their last report their OpExp were out of control and was growing much greater compared to their revenues. Not a good track to be on for a SaaS company!

If their fundamentals change I will stop knocking them. Until then I still say be wary...

And please note you guys are simply doing knocking behaviour in reverse, cheering when the SP rises! Exhibiting the same behaviour you criticise others for is a bit silly... Particularly when no new information has come to light.

[couta1]

That bloody moosie guy was a big DIL knocker.... I wonder if he has bought back in.
Ask BFG I hear he's pretty close to old Moosie.

[Balance]

Ask BFG I hear he's pretty close to old Moosie.

:D :D :D

Now now - they are two different animals altogether.

[couta1]

:D :D :D

Now now - they are two different animals altogether.
Dead right the same beast but different animals:cool:

[JayRiggs]

Dead right the same beast but different animals:cool:

Big Friendly Giant?

[cyclist]

I was knocking DIL a bit. Based on their last report their OpExp were out of control and was growing much greater compared to their revenues. Not a good track to be on for a SaaS company!

If their fundamentals change I will stop knocking them. Until then I still say be wary...

And please note you guys are simply doing knocking behaviour in reverse, cheering when the SP rises! Exhibiting the same behaviour you criticise others for is a bit silly... Particularly when no new information has come to light.

Yep. I pulled the plug around then for the same reason. Market is presently telling me I got it wrong.:ohmy:

I have a nagging feeling that the insiders don't really give a hoot about the typical small shareholder. They are happily enriching themselves without needing the share price to go up.

[BFG]

A nice little shakeout today with the buys being easily filled up again. Someone is showing their hand here...

[Monty]

nice to see some steady rises, but the question is will it break the $5:00 barrier and climb past or yet again will DIL tease us and go close but not quite over the summit?

I have been thinking for the past 18 months that this share must be about o do something exciting. Am I living in a dreamworld?

[BFG]

nice to see some steady rises, but the question is will it break the $5:00 barrier and climb past or yet again will DIL tease us and go close but not quite over the summit?

I have been thinking for the past 18 months that this share must be about o do something exciting. Am I living in a dreamworld?

As I posted before, someone is now very interested in DIL. Everything is cleared up now and the future is certain. Slow, steady rises ahead with a strengthening USD and known quarterly increases.

[Balance]

As I posted before, someone is now very interested in DIL. Everything is cleared up now and the future is certain. Slow, steady rises ahead with a strengthening USD and known quarterly increases.

SP strengthening towards a good announcement?

Nasdaq listing, capital repayment, takeover, new product, acquisition, good result - one or more of any of those.

Cannot wait for tomorrow!!!!!!

[Crystal Ball]

SP strengthening towards a good announcement?

Nasdaq listing, capital repayment, takeover, new product, acquisition, good result - one or more of any of those.

Cannot wait for tomorrow!!!!!!
Always the optimist :-) nice to see someone with the glass half full not half empty !!

[BFG]

All you will get tomorrow is a "steady as she goes" report. I gave up hoping for the above wish list looooooooong ago!

[Balance]

All you will get tomorrow is a "steady as she goes" report. I gave up hoping for the above wish list looooooooong ago!

We shall see - they have been very quiet and like children, that's when things happen!

Haha.

[winner69]

Main thing revenues up 24% on last year

Pity about the bottom line

[Balance]

All you will get tomorrow is a "steady as she goes" report. I gave up hoping for the above wish list looooooooong ago!

Steady as she goes it is.

Sigh.

[Whipmoney]

Steady as she goes it is.

Sigh.

The news is actually pretty damn good. Heading towards US $100m revenues and she's already generated ~ US$23m of cash in the last 9 months (after taking into account restatement costs and CAPEX).

Not bad at all.. for a US $322m Market Cap company.

Up she should go.

[sharp]

Looks damn attractive compared to say Orion.

[Balance]

The news is actually pretty damn good. Heading towards US $100m revenues and she's already generated ~ US$23m of cash in the last 9 months (after taking into account restatement costs and CAPEX).

Not bad at all.. for a US $322m Market Cap company.

Up she should go.

Take out the $67m of cash and it's looking like it could be $30m on $255m market cap?

[Whipmoney]

Take out the $67m of cash and it's looking like it could be $30m on $255m market cap?

Exactly.. huge FCFF yield. ~11.7% (after taking into account significant capex)

[Harvey Specter]

Main thing revenues up 24% on last year Good announcement I thought. Its only a Q3 update so not sure why people expected more than pure accounting info.

NASDAQ listing is still over a year away as they have to have over US$100m revenue to do it properly. This year will be ~$80m so will need another year to hit the number. therefore 2016 is the earlist possible so not point saying any more now anyway.

- Revenue up - check
- Good growth - check
- high retention - over 95% - double check
- cash balance growing - check
- no more accountant stuff ups - check
- More awards - check

Disc: in upto to my armpits.

[Balance]

Good announcement I thought. Its only a Q3 update so not sure why people expected more than pure accounting info.

NASDAQ listing is still over a year away as they have to have over US$100m revenue to do it properly. This year will be ~$80m so will need another year to hit the number. therefore 2016 is the earlist possible so not point saying any more now anyway.

- Revenue up - check
- Good growth - check
- high retention - over 95% - double check
- cash balance growing - check
- no more accountant stuff ups - check
- More awards - check

Disc: in upto to my armpits.

http://www.nbr.co.nz/article/diligent-boosts-earnings-8-third-quarter-lifts-full-year-outlook-165049

NBR agrees with you - results beat guidance, and full year results upgraded.

A few interesting pointers from Conference Call so far :

1. Gearing up to really take on European market - potentially as big a market as US. One key reason why R&D spend has doubled.

2. Board will consider using cash hoard to do share buybacks if sp stays at current levels.

[Whipmoney]

http://www.nbr.co.nz/article/diligent-boosts-earnings-8-third-quarter-lifts-full-year-outlook-165049

NBR agrees with you - results beat guidance, and full year results upgraded.

A few interesting pointers from Conference Call so far :

1. Gearing up to really take on European market - potentially as big a market as US. One key reason why R&D spend has doubled.

2. Board will consider using cash hoard to do share buybacks if sp stays at current levels.

Yeah its brilliant, this panned out pretty much as I had expected.

It's funny that I remember heaps of people crying that they were doing/considering share buybacks, which I found absurd given that as long as the cash is on the table this option is always there. Obviously the board have a broader view of where it is better spent to generate a return and given that the SP was depressed and cash kept accumulating, the stock to me was only getting more attractive by the quarter.

[iceman]

http://www.nbr.co.nz/article/diligent-boosts-earnings-8-third-quarter-lifts-full-year-outlook-165049

NBR agrees with you - results beat guidance, and full year results upgraded.

A few interesting pointers from Conference Call so far :

1. Gearing up to really take on European market - potentially as big a market as US. One key reason why R&D spend has doubled.

2. Board will consider using cash hoard to do share buybacks if sp stays at current levels.

SP not going to stay there though mate ;)

[robbo24]

SP not going to stay there though mate ;)

A close about $5.10 will slam the s*** out of that long term resistance point.

Looks like the golden cross of SMA 100 and SMA 200 will occur shortly too.

Very good signs for DIL :D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

Disc: Back in earlier this morning

[BFG]

Support floor and uptrend catalyst in the form of BUYBACKS if SP does not move - BUY MODE ACTIVATED

:D :D :D :D :D :D :D :D :D :D :D

[Balance]

Support floor and uptrend catalyst in the form of BUYBACKS if SP does not move - BUY MODE ACTIVATED



Milford Fund will be scrambling to buy back in - they can have mine at $9.60, around 50% more than the price they sold out at! :D

[robbo24]

milford fund will be scrambling to buy back in - they can have mine at $9.60, around 50% more than the price they sold out at! :d

gaynor gayctivated :d:d:d:d:d:d:d:d

[BFG]

Milford Fund will be scrambling to buy back in - they can have mine at $9.60, around 50% more than the price they sold out at! :D

If it's going to $10 ya might as well wait for $20 and Sodi buying Handleys rocket for chips because he broke his company

:D :D :D :D :D :D :D :D :D

[robbo24]

If it's going to $10 ya might as well wait for $20 and Sodi buying Handleys rocket for chips because he broke his company

:D :D :D :D :D :D :D :D :D

Too soon BFG, people died.

:D :D :D :D :D :D :D :D :D

[BFG]

Too soon BFG, people died.

:D :D :D :D :D :D :D :D :D

One person dies from SUGARY DRINK every hour of every day. Can't tell me that's not a tragedy???

[blobbles]

Is this a $600 million company with a diminishing growth rate and pretty crazy OpExp for a SaaS company that doesn't seem to have anything else up its sleeve except incremental updates to its product? Market says yes.

[Whipmoney]

Is this a $600 million company with a diminishing growth rate and pretty crazy OpExp for a SaaS company that doesn't seem to have anything else up its sleeve except incremental updates to its product? Market says yes.

If that's what the market thinks I'll take that wager. Especially considering its currently a USD$333m company with US$67m on the balance sheet.

[blobbles]

If that's what the market thinks I'll take that wager. Especially considering its currently a USD$333m company with US$67m on the balance sheet.

Just remember there are 120m shares in the company, not 87m...

[Balance]

Just remember there are 120m shares in the company, not 87m...

Good point, Bobbles.

Gotto thank you for providing balance and for your knocking which allowed me to grab some cheap shares a few months ago.

Long may you continue to do so!

[blobbles]

Good point, Bobbles.

Gotto thank you for providing balance and for your knocking which allowed me to grab some cheap shares a few months ago.

Long may you continue to do so!

I also picked up a few when it was around $3.5 a while back. Even though this was still above my valuation, I figured the market is irrational so likely will get a bump in the future. That might be it for me now though, hopefully a bit higher tomorrow and I will exit with a decent profit.

Until they show some spending restraint or do something better with their cash than a buy back (like make a real new product with their teams of development staff that seem to be sitting around twiddling thumbs).

Seems like they are back slapping themselves with high salaries so have got a bit complacent.

[KiwiGreen]

I agree largely with bobbles. Growth is still decent but they need a new venture to re-ignite it. I wouldn't be too bothered about a new product if they were really making the most out of Boardbooks, but Bobbles is right that their OpEx is way higher than it needs to be. Gross Profit Margin is fine but I expect a much better NP margin.

As a shareholder I wouldn't fight a buy back though. Would be happy to continue watching the SP grow. I just think the people running this business think they are geniuses for what they have already achieved and don't seem to be driving forward with the next stage of growth. Complacent. Get new management in to run the boardbooks business efficiently and get the team that designed boardbooks working on a new problem. I still value this in the $5.xx nonetheless. I expect we haven't yet seen true effect of the Windows edition (not that I think it will be a big big impact, but it should help to sustain growth in the 20%s for another year).

In summary: stop being complacent, get innovating and make a second product the market will be excited about DILIGENT.

[Te Whetu]

I REALLY hope they have a new product (and a good one).

This is their R&D spend, by quarter, for the last 11 quarters:

Q1 2012 – $474k (7% of revenue)
Q2 2012 – $579k (7% of revenue)
Q3 2012 – $576k (5% of revenue)
Q4 2012 – $647k (5% of revenue)
Q1 2013 – $933k (7% of revenue)
Q2 2013 – $945k (6% of revenue)
Q3 2013 – $1.2m (7% of revenue)
Q4 2013 – $1.4m (8% of revenue)
Q1 2014 – $1.3m (7% of revenue)
Q2 2014 – $1.5m (7% of revenue)
Q3 2014 – $2.5m (12% of revenue)

SERIOUSLY... you better have something to show for it... that increase alone is 21% of EBIT.

My other issue with today's announcement is the revenue guidance. Okay, good revenue growth in Q3 (from $20.3m Q2 to $21.4m Q3), well done DIL! However:


The guidance is for Q4 revenue is between $21.6m and $22.1m.

At the low-end, the revenue guidance is equivalent to no growth! Remember, not all customers come at the start of a quarter, so even if the net number of DIL customers was unchanged, revenue would likely go up a little (discounting any one-off fees). I am outright saying that the low-end estimate will be beaten.

The high-end estimate is not much better; if I thought only $22.1m revenue was going to be achieved Q4, I would seriously consider selling my DIL shares! I expect better than $22.1m... yes, I consider $22.1m to be possible; however, I would be very disappointed if this eventuated.

To me, it appears to be DIL setting up easy-beat targets which it can then easily knock down. Yes, Q4 and Q1 have historically been slower quarters for DIL. But it is not predicting slow, it is predicting a stand still.

To be honest, I'm half way between blobbles and Balance. I don't think DIL is worth its current share price on its current growth trajectory. However, I hold for two reasons: 1) I, like blobbles, figure the market can be irrational at times, particularly when SaaS is mentioned; and 2) iff DIL can produce a new product, AND it doesn't screw it up, AND it successfully cross-sells the new product, THEN I can see DIL being worth a lot more.

People can talk up a NASDAQ listing or whatever else they want. But unless DIL can come up with a new product, I don't think it is worth its current price. That being said, I'm sticking with it for now, and hoping that R&D is an indication DIL is close to launching a new product (as opposed to being an R&D black hole).

Cheers
Te Whetu

[blobbles]

I REALLY hope they have a new product (and a good one).

This is their R&D spend, by quarter, for the last 11 quarters:

Q1 2012 – $474k (7% of revenue)
Q2 2012 – $579k (7% of revenue)
Q3 2012 – $576k (5% of revenue)
Q4 2012 – $647k (5% of revenue)
Q1 2013 – $933k (7% of revenue)
Q2 2013 – $945k (6% of revenue)
Q3 2013 – $1.2m (7% of revenue)
Q4 2013 – $1.4m (8% of revenue)
Q1 2014 – $1.3m (7% of revenue)
Q2 2014 – $1.5m (7% of revenue)
Q3 2014 – $2.5m (12% of revenue)

SERIOUSLY... you better have something to show for it... that increase alone is 21% of EBIT.

My other issue with today's announcement is the revenue guidance. Okay, good revenue growth in Q3 (from $20.3m Q2 to $21.4m Q3), well done DIL! However:


The guidance is for Q4 revenue is between $21.6m and $22.1m.

At the low-end, the revenue guidance is equivalent to no growth! Remember, not all customers come at the start of a quarter, so even if the net number of DIL customers was unchanged, revenue would likely go up a little (discounting any one-off fees). I am outright saying that the low-end estimate will be beaten.

The high-end estimate is not much better; if I thought only $22.1m revenue was going to be achieved Q4, I would seriously consider selling my DIL shares! I expect better than $22.1m... yes, I consider $22.1m to be possible; however, I would be very disappointed if this eventuated.

To me, it appears to be DIL setting up easy-beat targets which it can then easily knock down. Yes, Q4 and Q1 have historically been slower quarters for DIL. But it is not predicting slow, it is predicting a stand still.

To be honest, I'm half way between blobbles and Balance. I don't think DIL is worth its current share price on its current growth trajectory. However, I hold for two reasons: 1) I, like blobbles, figure the market can be irrational at times, particularly when SaaS is mentioned; and 2) iff DIL can produce a new product, AND it doesn't screw it up, AND it successfully cross-sells the new product, THEN I can see DIL being worth a lot more.

People can talk up a NASDAQ listing or whatever else they want. But unless DIL can come up with a new product, I don't think it is worth its current price. That being said, I'm sticking with it for now, and hoping that R&D is an indication DIL is close to launching a new product (as opposed to being an R&D black hole).

Cheers
Te Whetu

Yep, I have banged on a number of times on this thread about their high R&D costs. The Windows product I suppose can be put under R&D, but what else is going on? The "new product" that has been hinted at before a lot appears to only have been the Windows app. $2.5m on a Windows app? Not likely...

Good post Te Whetu, nailed it.

[winner69]

The news is actually pretty damn good. Heading towards US $100m revenues and she's already generated ~ US$23m of cash in the last 9 months (after taking into account restatement costs and CAPEX).

Not bad at all.. for a US $322m Market Cap company.

Up she should go.

Whip, I have trouble reconciling your $23m cash

To me operating cash flow is $16m less capex $4m giving FCF of $12m

Doesn't look like too much in the way of one off stuff either

Quite a difference

[Balance]

Yep, I have banged on a number of times on this thread about their high R&D costs. The Windows product I suppose can be put under R&D, but what else is going on? The "new product" that has been hinted at before a lot appears to only have been the Windows app. $2.5m on a Windows app? Not likely...

Good post Te Whetu, nailed it.

The question was asked specifically at the Conference Call about the increased R&D spend.

Answer was that DIL has identified a number of opportunities to extend and expand on its product offerings, and ramped up R&D to deliver.

They had planned on getting their Charlotte product development R&D facility up and running over 2 years but have been pleasantly surprised they have been able to hire the right staff required in a shorter period. Hence, the increased R&D & admin spend.

Question now is whether DIL will be able to deliver on those opportunities.

[MAC]

It is hard to see DIL as a growth stock when the sole product cycle is maturing, the market for it is becoming saturated, and the best management can strategically come up with for the cash pile, after a long awaited couple of years in the think tank, is just a suggested share buyback.

The analyst consensus price target at $4.09 is a bit low IMO, I reckon the brokers are still unduly factoring in a discount for restatement risk. My DCF provides $5.50, I don’t see any reason why the SP should not go there over time.

I see DIL squarely as a cyclical now though, ranged $4 to $6 for the foreseeable future.

[Balance]

It is hard to see DIL as a growth stock when the sole product cycle is maturing, the market for it is becoming saturated, and the best management can strategically come up with for the cash pile, after a long awaited couple of years in the think tank, is just a suggested share buyback.

The analyst consensus price target at $4.09 is a bit low IMO, I reckon the brokers are still unduly factoring in a discount for restatement risk. My DCF provides $5.50, I don’t see any reason why the SP should not go there over time.

I see DIL squarely as a cyclical now though, ranged $4 to $6 for the foreseeable future.

Wait for the update from analysts in the next week after this result.

Market is definitely slowing down (growth rate wise) in the States which is why they are gearing up to take on Europe - Germany was highlighted as a market ripe for the picking.

I still see DIL like a Sky TV - difference is that DIL has a global reach while as Sky TV operates in a truly saturated NZ market and is reliant on incremental product and price increases to drive earnings growth. Has not stopped Sky TV performing as a stock however.

[MAC]

The median consensus price targets of 5 analysts for diligent is $4.09, the lowest is $3.86, the highest is $4.67, according to Yahoo's collation of them.

Some might consider my valuation at $5.50 quite bullish in that context actually, it's a valuation I adjusted from $5.90 in February if you care to check back on the thread, and is not inconsistent.

https://au.finance.yahoo.com/q/ao?s=dil.nz&ql=1

I don't prescribe to predict what the technical's are telling folk, and I admittedly really take little notice of sentiment, up or down, if they are telling you something else then I genuinely wish you luck and prosperity.

Markets FT have a range of $5.00 to $6.05, with a median of $5.30

http://markets.ft.com/research/Marke...asts?s=DIL:NZC (http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=DIL:NZC)

And then there is the outlier, Forsyth Barr, as they really very often are, high or low. An interesting report though which may be found here for all;

https://www.forsythbarr.co.nz/yk-fil...he%20Board.pdf (https://www.forsythbarr.co.nz/yk-files/8f94a52a21fccf655d00bc99fa07eeab/DIL%202014-09-30%20Beyond%20the%20Board.pdf)

regards, Mac

[winner69]

I see Forbar use 93 million as number of shares (ords plus employee options)

No mention of the preference shares.

I see DIL include the prefs when calculating their eps.

All makes a big difference. Should we use 123 million a the number o shares? If Forbar did they would have to reduce valuations by 25%. But they not stupid so 93 million must be the number

Methinks the 'market' is only using the 83 million (ignoring the prefs)

These prefs are actually something aren't they, not some nebulous thing floating around that don't matter.

Got me stuffed

[Whipmoney]

The median consensus price targets of 5 analysts for diligent is $4.09, the lowest is $3.86, the highest is $4.67, according to Yahoo's collation of them.

Some might consider my valuation at $5.50 quite bullish in that context actually, it's a valuation I adjusted from $5.90 in February if you care to check back on the thread, and is not inconsistent.

https://au.finance.yahoo.com/q/ao?s=dil.nz&ql=1

I don't prescribe to predict what the technical's are telling folk, and I admittedly really take little notice of sentiment, up or down, if they are telling you something else then I genuinely wish you luck and prosperity.

Markets FT have a range of $5.00 to $6.05, with a median of $5.30

http://markets.ft.com/research/Marke...asts?s=DIL:NZC (http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=DIL:NZC)

And then there is the outlier, Forsyth Barr, as they really very often are, high or low. An interesting report though which may be found here for all;

https://www.forsythbarr.co.nz/yk-fil...he%20Board.pdf (https://www.forsythbarr.co.nz/yk-files/8f94a52a21fccf655d00bc99fa07eeab/DIL%202014-09-30%20Beyond%20the%20Board.pdf)

regards, Mac

From memory Goldman's were giving it $5.40 - $5.50 in their last update. That's around what I had in my own DCF.

I'm not going to lie, I think there is a hell of a lot more upside potential than downside risk with all the R&D which they are doing which they can easily afford out of cash-flow.

[MAC]

I agree Whipmoney, there’s a lot of very smart innovative people in that company, well with the exception of their accountants perhaps, and who really knows what they have cooking in the basement.

From a potential perspective I reckon they really are capable of doing it all over again, management just need to want to do it, perhaps they do, perhaps they are just content leading a happy fat cat executive’s life now, very often companies becomes cyclical just for that reason alone, it would be interesting to hear from an insider as to what level their blood pressure is at ?

[winner69]

From memory Goldman's were giving it $5.40 - $5.50 in their last update. That's around what I had in my own DCF.

I'm not going to lie, I think there is a hell of a lot more upside potential than downside risk with all the R&D which they are doing which they can easily afford out of cash-flow.

Well you would hope that those extra 24 IT gurus are doing something wonderful?

[winner69]

Exactly.. huge FCFF yield. ~11.7% (after taking into account significant capex)

Maybe it's only a low FCFF yield of ~4% (annualising 9 months cash flow and using 123 million shares)

[winner69]

Things just seem as they should be with Diligent's financials

Talk of growing users and fantastic cash flows just don't seem to gel

Numbers below are last 5 quarters

First thing - number of users going up by about 5,000 per quarter ..... but cash receipts (what customers are actually paying in cash) is remaining around the $21m to $24m. Look at Q3 numbers - there are 19,000 extra customers but cash receipts are about the same as last year

As per previous post I struggle to see how US$12m of free cash flow over 9 months supports an Enterprise Value of US$400m

It really is times like this when fundamental analysis is useless and the squiggly lines are important

Even though if you experts out there know the answer to the customer numbers and receipts conumbrum let me know.

[BFG]

Things just seem as they should be with Diligent's financials

Talk of growing users and fantastic cash flows just don't seem to gel

Numbers below are last 5 quarters

First thing - number of users going up by about 5,000 per quarter ..... but cash receipts (what customers are actually paying in cash) is remaining around the $21m to $24m. Look at Q3 numbers - there are 19,000 extra customers but cash receipts are about the same as last year

As per previous post I struggle to see how US$12m of free cash flow over 9 months supports an Enterprise Value of US$400m

It really is times like this when fundamental analysis is useless and the squiggly lines are important

Even though if you experts out there know the answer to the customer numbers and receipts conumbrum let me know.

Is this perhaps due to the new way of stating the financials? Are those numbers you're using previously the restated ones? Interesting point you bring up Winner. Last thing we want is another debacle! :D

[winner69]

Is this perhaps due to the new way of stating the financials? Are those numbers you're using previously the restated ones? Interesting point you bring up Winner. Last thing we want is another debacle! :D

All restated numbers from Cash Flow statements

This seems to have started since thy stopped reporting new licence numbers and reverted to user numbers.

Maybe not many new licences and new users pay stuff all?

[BFG]

All restated numbers from Cash Flow statements

This seems to have started since thy stopped reporting new licence numbers and reverted to user numbers.

Maybe not many new licences and new users pay stuff all?

Yes the key was always new licenses. They could have sold 1 license to a company with 5000 users for all we know! I'm not impresed by this...

[Whipmoney]

Yes the key was always new licenses. They could have sold 1 license to a company with 5000 users for all we know! I'm not impressed by this...

While I was only half listening to the call at work I they acknowledged that they sold 1 license which had ~600 users, which by all accounts is on the larger end of the spectrum.

It also sounds like the bulk of new growth is coming from Europe (and Asia-Pacific to a lesser extent) and that this was with only one major sales manager on the ground in Amsterdam. They've just filled an equivalent role for Germany which is one of their strategic markets, and the new language support should help.

http://www.boardbooks.com/news-events/press-releases/diligent-hires-klaus-lindinger-from-oracle-to-grow-its-german-market-share

Given their love for administration I imagine German corporations would be lapping this up. Mercedes, BMW, Volkswagen group, plus many thousands more potentially large clients...

[winner69]

Totally disagree..... the key is not new licences it is new users as their revenue stream is based on a the amount of users logging on per licence.

Licences have very little to do with the final revenue stream it's a number of end users that matters.
Number of new licences is irrelevant
For example the company wont get rich by signing 100 new licences with 5 users each(total 500 new end users) but they will get rich signing less up less new licences say 30 with an average 150 users each (total 4500 new end users).
I am surprised you don't get this BFG.

Based on the increase in revenues and the increase number of users over the last 4 quarters it looks like each new user is worth about $1,100 annually (on the average) ....but that number has been decreasing each of the last 4 quarters

[janner]

Looks damn attractive compared to say Orion.

Orion !!..The Hunter..

Looking for prey !!.. :-)))

[BFG]

Totally disagree..... the key is not new licences it is new users as their revenue stream is based on a the amount of users logging on per licence.

Licences have very little to do with the final revenue stream it's a number of end users that matters.
Number of new licences is irrelevant
For example the company wont get rich by signing 100 new licences with 5 users each(total 500 new end users) but they will get rich signing less up less new licences say 30 with an average 150 users each (total 4500 new end users).
I am surprised you don't get this BFG.

The maximum amount of new users able to be trained by the company is a little over 5,000 (anybody know the total number? We discussed it awhile ago). The fact that this "new users" number has stayed the same while "client numbers" has decreased (concordant with a decrease in growth rate and share price) suggests the opposite to me.

Happy to be proven wrong! :D

[Whipmoney]

The maximum amount of new users able to be trained by the company is a little over 5,000 (anybody know the total number? We discussed it awhile ago). The fact that this "new users" number has stayed the same while "client numbers" has decreased (concordant with a decrease in growth rate and share price) suggests the opposite to me.

Happy to be proven wrong! :D

Mathematically this makes no sense.

If the company is limited to onboarding only 5000 customers per quarter then realistically it doesnt matter if this is one client, 50 or 5000.

If this were the case then of course the revenue growth rate would decline as the numerator (5000 x revenue per user) is being divided by a continually growing denominator (existing customer base x revenue per user).

I also don't see how you can say that they are limited to training only 5000 new users per quarter given the recent expansion of their New York HQ and additional customer service staff.

The growth rate is declining because this isn't your typical generic SaaS product. Its limited to a certain subset of users (i.e. Directors - a target market that's generally slow to move) and it probably takes a while for these types of companies to adopt. The low hanging fruit in the US has been converted and now they're moving up the tree. There recent moves show that they been looking to replicate the US experience in Europe where its likely they will face less competition and will have more of an edge with regard to their software, service, German data-centre, language packs etc.

Time will tell I guess.

[BFG]

I was just reminiscing on previous conversations about the maximum trainable users per quarter was circa 5000 (I can't remember the exact number) as they had a limited number of trainers. No doubt the number of trainers has increased. If it has though, you have to ask why aren't they getting even more users onboard per quarter then?

The fact they dropped the client numbers signed up per quarter silently hoping no one would notice, while keeping the user numbers speaks volumes. It's like the dotcom boom fad of measuring "eyeballs" as possible revenue; you can have a billion eyes viewing your website, but if no one follows through and buys anything it's pretty pointless!

[twotic]

I was just reminiscing on previous conversations about the maximum trainable users per quarter was circa 5000 (I can't remember the exact number) as they had a limited number of trainers. No doubt the number of trainers has increased. If it has though, you have to ask why aren't they getting even more users onboard per quarter then?

The fact they dropped the client numbers signed up per quarter silently hoping no one would notice, while keeping the user numbers speaks volumes. It's like the dotcom boom fad of measuring "eyeballs" as possible revenue; you can have a billion eyes viewing your website, but if no one follows through and buys anything it's pretty pointless!

As per Snapiti's disagreement with one of your previous posts, IF revenues are a function of user numbers (not just licenses) then your analogy is a poor one at best....

On that note, surely some of you knowledgable investors could put this one to bed? Presumably the relationship between revenue and both user and licence numbers is pretty well known, although I note that Winner has on several occasions posed effectively the same question with minimal response.

Thank you to anyone in advance that can provide a bit of clarity.

Disc: Don't hold, but interested.

[BFG]

Lmao ok got it snaps. I'm just confused in that respect why a) it was ever shown in quarterlies and b) why others plotted it on multiple graphs and c) why revenue growth each quarter ($$$ wise, not percentage) isn't exactly the same or nearly so as the new users are almost always the same?

It was a boring weekend but a good one visiting the oldies and bugging the hell out of 'em :D

[winner69]

For what its worth here is table of license numbers (to 14Q1) and user numbers along with rolling 4 quarter Cash Receipts (what customers paid and I use that to overcome the deferred stuff)

So users per license was creeping up ever so slightly to 14Q1 but nothing dramatic

Over the last year the Cash Receipts per user has been just over $1,000 but trending down slightly (even though higher than a few years ago)

Still need to work out why 14Q3 users increased by 4,500 but cash receipts were only up fractionally

Anyway make what you want but things look pretty steady as she goes

[winner69]

That Forbar report linked by MAC had a DCF of value of $5.10 (on 93 million shares)

That valuation driven by having 270,000 users in FY20, ie growth of 14.5% pa and 3 times as many as now. seems reasonable in view of current growth rate decay DIL is currently experiencing.

Funny enough this works out at about 4,800 new users per quarter. Seems like guru analysts are on same wavelength as guru BFG in thinking this is all they can handle.owth of

Current price close to Forbars valuation, even with all that growth built in. So no bonanza here, just the 11% pa return (their WACC) over the next 6 years. Looks like another The Future Is Now scenario so just keep trading those squiggly lines seems best strategy.

[zigzag]

Where on earth do Forbar get 93 million shares? The ords and the prefs both count as equity, so there are about 120 million shares altogether. Are you sure you are quoting Forbar correctly?

[winner69]

Where on earth do Forbar get 93 million shares? The ords and the prefs both count as equity, so there are about 120 million shares altogether. Are you sure you are quoting Forbar correctly?

They used 92.4 million, being shares plus employee options assumed to be exercised

Forbar are gurus so obviously the prefs don't need to be counted. Others seem to use the lower number as well so we must be wrong If they did would reduce valuation a bit eh.

Their $5.10 becomes less than $4.00

[winner69]

DIL have another quarter like Q3, guidance suggests so, and FY earnings about US$10n

Currently a PE of nearly 50 or over 40 if cash mountain accounted for.

And Nick Lewis says on the radio this morning this is a maturing business

Umm

[BFG]

Winner, using a high number of users per license (40), we can assume new licenses is around the 120-130 mark by dividing by new users eh? May be lower as was said earlier one license was for a massive 600 users! This suggests the new user number is no longer in decline, so why they cut it from reporting times and when plenty were using it to see where the company was heading is bizarre to me...

And yes, ForBarr using undiluted share number is disingenuous. Treating them as if they don't even exist doesn't mean it is so! Jeez guys if you can't even get the fully diluted price right...

[Balance]

They used 92.4 million, being shares plus employee options assumed to be exercised

Forbar are gurus so obviously the prefs don't need to be counted. Others seem to use the lower number as well so we must be wrong If they did would reduce valuation a bit eh.

Their $5.10 becomes less than $4.00

Don't expect much from Forbar research - same firm which brought Feltex (single biggest fastest IPO collapse) and Credit Sails (MD was caught lying about the firm's role in structuring and promoting the product) to the market. It's all about the money - how they make it for themselves!

[winner69]

So much positive sentiment around DIL means following the squiggly line is the thing to watch, esp as fundamentals seem to mean squat all.

So from $5.00 the line looks like $5.50 plus soon .....hen what the big unknown, but don't forget sentiment rules.

[BFG]

There have been a few DIL price *upgrades/targets over the weekend. Craig's have gone to 6.84, forbarr remain on $6.05 with outperform and firstnz are $5.80. The average of the three is $6.23

Barring a disaster, I expect momentum traders to start targetting these prices as we have seen great accumulation below $4.50.

[Baa_Baa]

So much positive sentiment around DIL means following the squiggly line is the thing to watch, esp as fundamentals seem to mean squat all.

So from $5.00 the line looks like $5.50 plus soon .....hen what the big unknown, but don't forget sentiment rules.

Absolutely, the price chart is your friend - especially when all else confounds. Breaking resistance at $5.11 (Friday's high) is obviously significant and immediate focus, above that $5.50 beckons, and below $4.85 offers light support and $4.80 strong support.

This of course says nothing about the actual value of DIL, only which of the buy vs sell sides are prevailing .

[Hoop]

Absolutely, the price chart is your friend - especially when all else confounds. Breaking resistance at $5.11 (Friday's high) is obviously significant and immediate focus, above that $5.50 beckons, and below $4.85 offers light support and $4.80 strong support.

This of course says nothing about the actual value of DIL, only which of the buy vs sell sides are prevailing .

Positive Brokers research reports hitting the public media late as usual.....TA has just broken out of its trading range (rectangle pattern) but starting 3 months ago was the 1st confirmation that an uptrend was being established..The 2nd confirmation in Mid October establishes the new primary uptrend line..What makes the confirmations more potent were the fact they happened on support conjunctions...therefore in early August chartists interested in DIL would have been alerted that the odds were safe enough to start entry buying at around 410c..The quarter results announced at that time put a floor on the price ..HMMmm..Harbour's good timing accumulation.
The next confirmation in Mid October strengthens the uptrend and from a technical point of view with this bullishness it was only a matter of time that a breakout would occur...

Disc: have no DIL shares..money is invested in better places e.g power shares

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL10112014-1.png (http://s458.photobucket.com/user/Hoop_1/media/DIL10112014-1.png.html)

[Whipmoney]

Bugger Hoop, you beat me to it :t_up:

What I was going to highlight was the advantage of using an entry/exit strategy to maximise portfolio returns. While most studies that say its time in the market not timing the market that gets good returns, this ignores the opportunity cost of having your money elsewhere for significant lengths of time while you wait for a recovery. In DIL's case, if you use the 200 day MA as a signal you would have exited back in June 2013 (or July 13 at the latest) @$6 and stayed out until October 2014 with an entry of $4.60. If you had stayed in the whole 16 months you would have lost a further 23% of your capital, and you would have missed out on having that capital invested elsewhere for that time, which even in a boring old dividend stock would have returned about 10% in dividends, plus normal capital appreciation during what was a 2013-2014 bull market run. So by selling out and waiting to buy back in, you would have minimised the extent of your capital loss by exiting, reduced your portfolio losses by making profits on another investment, plus earned additional cash from dividends to buy even more shares back now.

Wouldn't that depend on the stock though?

For example if you were bullish on PEB (based on fundamentals) however exited on its down tend from ~72c (18/3/13) to ~49c (10/10/13) you would have missed its spectacular jump to ~$1.60 over the days 3 days of trading leading up to 25/10/14.

I tend to factor in upside potential relative to downside risk, i.e I believe that a stock has a good fundamental floor and great upside potential (which may be hard to time) then its probably worth holding onto.

[Whipmoney]

Well yes, but I am talking about investing strategies not speculation. The only reason you buy a stock like PEB or any other company with no revenue or profits, is that you cross your fingers and hope that it "pops" one day.

Your post makes no sense, as without start-up/venture/seed capital ("investment") then a multitude of high revenue/highly profitable billion dollar companies wouldn't exist today.

One can easily include some more "speculative" stocks in a diversified portfolio, whilst still maintaining a viable investment strategy.

Disc: was in PEB when it "popped". Sold before it "popped".

[Whipmoney]

PS: 326k volume by lunchtime.. is this formally a golden cross?

[Balance]

that's what I was thinking.... good volume with $5 holding very very positive sign.

Brokers issued their upgraded reports over the last few days - can sense investors buying in. See the crossing of 294,000 shares at $5.025 when market was trading at $5.00? Good sign of buying interest and willingness to pay up for volume.

And this time, Milford has nothing to sell - they bought Xero instead!

[MAC]

I think some TA pride has burst Whipmoney, all those on the thread who bought in hoping the share price would explode to $9 or something because it was in the charts and the tea leaves, brought back to reality by valuations of what is now more a cyclical stock than a growth stock.

Still a bit of upside there for value investors though, it’s not at a sell threshold just yet.

[Crystal Ball]

Bugger Hoop, you beat me to it :t_up:

What I was going to highlight was the advantage of using an entry/exit strategy to maximise portfolio returns. While most studies that say its time in the market not timing the market that gets good returns, this ignores the opportunity cost of having your money elsewhere for significant lengths of time while you wait for a recovery. In DIL's case, if you use the 200 day MA as a signal you would have exited back in June 2013 (or July 13 at the latest) @$6 and stayed out until October 2014 with an entry of $4.60. If you had stayed in the whole 16 months you would have lost a further 23% of your capital, and you would have missed out on having that capital invested elsewhere for that time, which even in a boring old dividend stock would have returned about 10% in dividends, plus normal capital appreciation during what was a 2013-2014 bull market run. So by selling out and waiting to buy back in, you would have minimised the extent of your capital loss by exiting, reduced your portfolio losses by making profits on another investment, plus earned additional cash from dividends to buy even more shares back now.
All well and good KW presuming that you are able to exit where you had placed your" money elsewhere" . Sometimes, when you exit at the right time and buy elsewhere, by the time it's right to buy back in, you may not be able to sell and recoup your investment that you had placed elsewhere, to buy back in.... Would be nice if it all panned out like that, but quite often it
doesn t.....

[Hoop]

Your post makes no sense, as without start-up/venture/seed capital ("investment") then a multitude of high revenue/highly profitable billion dollar companies wouldn't exist today.

One can easily include some more "speculative" stocks in a diversified portfolio, whilst still maintaining a viable investment strategy.

Disc: was in PEB when it "popped". Sold before it "popped".

Me too using TA timing buy/sell signals
A year ago the big move from 50 to 70 happened too suddenly but there was a 3 day pause at 70c which was time enough to enter before it shot away to 160c....So many anti TA people have used this example but its mostly a myth...

[Hoop]

All well and good KW presuming that you are able to exit where you had placed your" money elsewhere" . Sometimes, when you exit at the right time and buy elsewhere, by the time it's right to buy back in, you may not be able to sell and recoup your investment that you had placed elsewhere, to buy back in.... Would be nice if it all panned out like that, but quite often it
doesn t.....
Not sure your reasoning here..Selling to buy something better seems to work for me....... as long as you are not seduced into temption to plonk everything into these very low illiquid stocks for a quick buck...illiquid stocks can be risky things if you suffer from periodic cash shortages e.g sell to pay IRD

[Crystal Ball]

Not sure your reasoning here..Selling to buy something better seems to work for me....... as long as you are not seduced into temption to plonk everything into these very low illiquid stocks for a quick buck...illiquid stocks can be risky things if you suffer from periodic cash shortages e.g sell to pay IRD
Yes, if you do manage to buy better, but that doesn t always happen....to me, anyway. I guess I am more of a risk buyer than you which means I am stuck waiting for sp to go up on some good news. That may take time and by then I may have missed an opportunity elsewhere....I make sure the money I invest isn t needed in a hurry, but sometimes unfortunately I don t pick the right stocks.... Learning curve stuff I guess.

[winner69]

So after his discussion between good and bad and lifts and escalators is DIL a buy at the moment or not?

[Whipmoney]

I'd say if you wanted to buy DIL it is probably safe to buy it as it looks like the bottom is in. Is it the best stock to buy you can find on the market? Need to go back to FA to figure that out. What is the expected EPS growth over time, compared to its current P/E? Is it expensive or cheap?

It's interesting to see that people use earnings (an accounting measure) & EPS for a stock like DIL where their income/cash-flow is front-loaded.

Wouldn't FCFF/DCF analysis be more accurate for a stock like this?

[winner69]

It's interesting to see that people use earnings (an accounting measure) & EPS for a stock like DIL where their income/cash-flow is front-loaded.

Wouldn't FCFF/DCF analysis be more accurate for a stock like this?

Of course FCF and DCF is the more appropriate method, even though some say I is now a mature company so earnings multiplies might a good simple way to value.

Back to FCF I have trouble seeing how the current FCF of $16m can support an EV of $400m - even with exorbitant growth rates.

As you put it a FCF yield of ~4%

Never mind the fundamentals it's the positive sentiment that matters and that indicates a rising shareprice.

[Crystal Ball]

Best advice I can give here is stop waiting for the lift, and take the escalator. In other words, buy a stock that is quietly appreciating over time (in a confirmed uptrend) instead of sitting on a stock tht's going nowhere waiting for it to suddenly jump. Its far far easier to get rich slow, than it is to try and hit the jackpot on one stock. Although that doesnt stop 99% of investors chasing the "holy grail" <sigh>
Yes, the elusive holy grail....That's sound advice from you KW and something I need to remind myself of,cheers for that !

[Longhaul]

In other words, buy a stock that is quietly appreciating over time (in a confirmed uptrend) instead of sitting on a stock that's going nowhere waiting for it to suddenly jump. Its far far easier to get rich slow, than it is to try and hit the jackpot on one stock.

I am adding this to my list of essential Sharetrader insights. Thanks KW!

[Whipmoney]

Absolutely, the price chart is your friend - especially when all else confounds. Breaking resistance at $5.11 (Friday's high) is obviously significant and immediate focus, above that $5.50 beckons, and below $4.85 offers light support and $4.80 strong support.

This of course says nothing about the actual value of DIL, only which of the buy vs sell sides are prevailing .

$5.11 now breached. Looking good.

[Leftfield]

November 14, 2014 - Diligent Board Member Services, Inc. (NZX:DIL), provider


of the Diligent Boardbooks(R) solution - the world's most widely used board


portal - today announced it ranked 98th on Deloitte's 2014 Technology Fast


500(TM), a ranking of the 500 fastest-growing technology, media,


telecommunications, life sciences and clean technology companies in North


America. Diligent grew 1,195 percent (with a revenue increase of $5.0 million


to $64.8 million) from 2009 to 2013.

[Whipmoney]

November 14, 2014 - Diligent Board Member Services, Inc. (NZX:DIL), provider


of the Diligent Boardbooks(R) solution - the world's most widely used board


portal - today announced it ranked 98th on Deloitte's 2014 Technology Fast


500(TM), a ranking of the 500 fastest-growing technology, media,


telecommunications, life sciences and clean technology companies in North


America. Diligent grew 1,195 percent (with a revenue increase of $5.0 million


to $64.8 million) from 2009 to 2013.















Absolutely massive volume today, 890k shares

[Wolf]

Will be interesting to see if $5.00 holds on Monday.

[Monty]

Will be interesting to see if $5.00 holds on Monday.

seems to be holding at $5.02 with reasonable volume (around 52,000 shares traded) I guess someone together with the trading of 890,000 on Friday is stocking up. but when can we call this as an upward trend?

[klid]

I like how it looks over 3 months now. 6 OK too.

[Monty]

another day of heavy trading with over 500,000 shares traded. someone continues to accumulate. Im just surprised there is very little upward pressure on the price. there must be less and less shares available on the market for trading. at least the price is holding up over $5

[Wolf]

another day of heavy trading with over 500,000 shares traded. someone continues to accumulate. Im just surprised there is very little upward pressure on the price. there must be less and less shares available on the market for trading. at least the price is holding up over $5

I would say its someone distributing/profit taking rather than accumulating. Large volume with out the price rising showing floating supply. Once this floating supply is gone the price will move up.

[BFG]

another day of heavy trading with over 500,000 shares traded. someone continues to accumulate. Im just surprised there is very little upward pressure on the price. there must be less and less shares available on the market for trading. at least the price is holding up over $5

Watch On Balance Volume (OBV) on charts for ques on if there's really buying or distributing going on.

[JohnnyTheHorse]

Definitely some good distribution here. Buyer is starting to pay up slightly more. There have been no SSH's from selling so I expect that the seller is almost out of shares.

[pierre]

ACC has been the seller:


REL: 1520 HRS Diligent Board Member Services INC (NS)

SSH: DIL: SSH Notice - (Accident Compensation Corporation ("ACC"))

Disclosure of movement of 1% or more in substantial holding or change in
nature of relevant interest or both
Sections 23 and 24, Securities Markets Act 1988

Relevant event being disclosed: Movement of 1% or more
Date of relevant event: 18 November 2014
To: NZX Limited
And: DILIGENT BOARD MEMBER SERVICES INC NPV
Date this disclosure made: 19 November 2014
Date last disclosure made: 24 January 2014

Substantial security holder(s) giving disclosure

Name(s): Accident Compensation Corporation ("ACC")
Nicholas Bagnall, Paul Robertshawe, Blair Tallott, Blair Cooper, Jason
Familton
Contact details: Matthew Cunliffe +64 4 816 5743
investmentscompliance@acc.co.nz

Summary of substantial holding to which disclosure relates

Class of listed voting securities: Ordinary Shares
Summary for: Accident Compensation Corporation ("ACC")
Nicholas Bagnall, Paul Robertshawe, Blair Tallott, Blair Cooper, Jason
Familton

For this disclosure,--

(a) Total number held in class: 6,477,441
(b) Total in class: 86,822,226
(c) Total percentage held in class: 7.461%

For last disclosure,--

(a) Total number held in class: 7,127,653
(b) Total in class: 83,776,155
(c) Total percentage held in class: 8.508%

[stoploss]

Definitely some good distribution here. Buyer is starting to pay up slightly more. There have been no SSH's from selling so I expect that the seller is almost out of shares.
Looks like they have plenty more to go if they want to ......

[BFG]

Looks like they have plenty more to go if they want to ......

Hopefully they hold and we will see no more ACC fees in 2017 as promised!

[JohnnyTheHorse]

Looks like they have plenty more to go if they want to ......

Yup, unpredictable as to how many they want to let go of. Certainly wouldn't think it'd be more than 2-3% though (but could be wrong).

[klid]

Definitely some good distribution here. Buyer is starting to pay up slightly more. There have been no SSH's from selling so I expect that the seller is almost out of shares.

There's been a lot of volume consistently recently! Intriguing.

This cash! Gosh, got to be something really good to use it for..!!!

[JohnnyTheHorse]

Lots of buy signals went off around the $4.40 area, then $4.80 and $5.00 resistance lines. DIL is well and truly in a confirmed uptrend. I see the current price action as a continuation trend - a distribution of shares before the next leg upwards. There have been very large volumes traded in the current $5.00-$5.10 band, so there are large players both buying and selling (ACC being one of them, but looks like the majority of shares sold has been by someone else).

This could be a short rectangular flag, in which case the next move will be soon. Alternatively this could turn into a rectangular trading band, which could last 3 months or more (although it would be a very narrow band, so maybe the former is more likely? - maybe Hoop can advise on that). The last day or two have seen the large buyers and sellers mostly absent, so it's just a waiting game to see what happens. Tiny parcels on the buy side so there may be a bot active or someone looking for a large crossing? Definite buy signals if $5.10 is broken on volume.

Disc: Trading.

6496

[theace]

Some news .... http://www.businesswire.com/news/home/20141203005033/en/Diligent-Announces-Reaching-400-Clients-EMEA-Region#.VIAjlzGUcqQ

[BFG]

Some news .... http://www.businesswire.com/news/home/20141203005033/en/Diligent-Announces-Reaching-400-Clients-EMEA-Region#.VIAjlzGUcqQ

Anyone tell us what percentage of total clients this number now makes up? And what the growth rate is in Europe using last know number vs now? I can't find anything as they stopped reporting client numbers (from a quick trawl of 75 pages!)

[alistair85]

Any ideas why dil seems to be on the slide? I thought we could expect good things...

[BFG]

Any ideas why dil seems to be on the slide? I thought we could expect good things...

As I stated earlier, a reversion back to sudden jumps after quarterlies followed by slides downwards between them. The usual games played by the usual suspects ;)

[JohnnyTheHorse]

Any ideas why dil seems to be on the slide? I thought we could expect good things...

From the trading I have been observing it looks like there has been a distribution of shares between some large institutions. It is possible that we could see an SSH from the buyer soon. The buyer did not appear to be too active today - weakness on the US markets (and a likely correction) has dampened their enthusiasm I'd say.

It's the wider market forces at play - nothing to do with DIL really.

[JayRiggs]

Good to see Pie Funds getting back into DIL.
From their latest newsletter.

I have also taken a position in Diligent for both the Growth Fund and the Global Fund. We like the exposure to USD earnings, defensive nature of the earnings and the companies attractiveness as a takeover target. Pie previously owned Diligent a few years back and rode the stock from $1.00 to $8.00 before exiting. Currently at $5 it appears to offer good value once again.

[BFG]

Looks like the DIL train is getting ready to leave the station again. RSI, MACD, OBV all up with the DMI showing a bullish cross. $5.25 is psych resistance while $5.50 is major long term resistance as is $6.00.

There's a reason DIL was the most picked ST 2015 contest stock ;)

[Beagle]

I decided to buy a ticket to ride today. Seeing as four brokers are picking it I decided to have a small piece of the action.

[kizame]

Looks like the DIL train is getting ready to leave the station again. RSI, MACD, OBV all up with the DMI showing a bullish cross. $5.25 is psych resistance while $5.50 is major long term resistance as is $6.00.

There's a reason DIL was the most picked ST 2015 contest stock ;)

I think it has just popped over the major resistance at 5.10 so it's looking good,I think a bit of water needed to get under the bridge before the next advance.Would like to see this stock continue upwards as it is one of the truly profitable tech stocks.

[robbo24]

I think it has just popped over the major resistance at 5.10 so it's looking good,I think a bit of water needed to get under the bridge before the next advance.Would like to see this stock continue upwards as it is one of the truly profitable tech stocks.

I agree with kizame.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

[BFG]

Stop buying up all the DIL Rob, leave some for the others! :D

[BFG]

Straight upwards to test $5.50 resistance. This pup has legs again! Bet the Sparkster and RR are happy today :)

[pierre]

Straight upwards to test $5.50 resistance. This pup has legs again! Bet the Sparkster and RR are happy today :)

Yep looking good today. I'm happy - back above my average cost again at last!

[winner69]

Straight upwards to test $5.50 resistance. This pup has legs again! Bet the Sparkster and RR are happy today :)

That $5.50 won't be resistance .... $6.00 next week

When 4 brokers pick it everybody wants some of the action

After $6 then anything is possible

[BFG]

That $5.50 won't be resistance .... $6.00 next week

When 4 brokers pick it everybody wants some of the action

After $6 then anything is possible

Textbook early test of $5.50 and failure. Have to be more patient than that Winner ;)

[winner69]

Textbook early test of $5.50 and failure. Have to be more patient than that Winner ;)

That 550 level was exactly 2 years ago

Might have been resistance for a month or so on the way up but didn't act as support on the way down

Good thing that once 550 was broken the price went all the way to 820 - something to look forward to even though the last two years have been a disaster for some

[winner69]

570 is an interesting point to watch out for

It's the 50% Fib retracement from the lows of 320 .... and the point in October 2013 when the share price really collapsed - the 150 drop to just above 400 in a couple of days

(512 was another Fib ... that was resistance for a while)

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL30122014-1.png (http://s458.photobucket.com/user/Hoop_1/media/DIL30122014-1.png.html)

[winner69]

Candles give a different perspective than a line with just daily closing prices eh.

The 'yes it did' days in question did have intraday lows of 545 and 555 but closes of 567 and 610

So one way of looking at it 550 odd was actually support (as per your chart) but for those who only look at prices at the close 550 barely registers on the way down. There was that spike down at 567 and then a spike down to 540 a few weeks later.

When its 8 bucks again in a few months we'll wont enen worry about todays failure to break through a thing called resistance.

[winner69]

Interestingly DIL climbed 40% over the holiday break last year

Seems a seasonal thing. Maybe a couple of good broker reports and media coverage or maybe annual sharetrader exuberance

Don't know but interesting .....and indicates a bit more to go over the next few weeks as only up less than 10% so far this holiday break

6 bucks plus in a couple of weeks, maybe 6 bucks 50

C'mon BFG ....give it a go ....better than hoarding your Aussie bucks.

[BFG]

Whose said I haven't already bought? ;)

[winner69]

Whose said I haven't already bought? ;)

Sorry mate, misunderstood your earlier posts

Welcome aboard .....but keep the profits this time around.

Chart around 9 bucks could get messy

[Hoop]

.....

......When its 8 bucks again in a few months we'll wont enen worry about todays failure to break through a thing called resistance.

To be fair to DIL, yesterdays price rise to 550 was a large daily jump ..It rocketed up tested 550 resistance and failed the first time, so like you Winner I wouldn't assume 550 is the top..by "running out of gas" at 550 recognises the 550 resistance level is working and I agree 550 resistance should not be a worry with up trending stocks...up trends break resistances...

Recognising resistances when buying/accumulating up-trending stocks is of timing importance...(buy in/accumulate around support areas..wait(patience) around resistance areas)...A short term throwback to the 510 support and watch would be the plan (great in theory never works in practice..eh?)..With no Christmas cheer on Wall St and NZ$ up against the US$ today this would be the short term noise I would like to hear if I was thinking to buy the up trending DIL

Typical low volume holiday noise???....hmmm maybe,.. although yesterdays volume wasn't huge, it wasn't very low either and history has seen this latest DIL bull cycle with many rises on low volumes..somewhat typical for an partially "illiquid" stock of just under 87M shares issued.

Interestingly DIL climbed 40% over the holiday break last year...Hmmm that was a sudden rise too and then nothing more for the next 10 months

Disc: own none...but now watching with interest...(TA-wise ..should've got in at $4.25)..

[BFG]

nice tiny disclaimer there Hoopster ;)

[Hoop]

nice tiny disclaimer there Hoopster ;)

http://i458.photobucket.com/albums/qq306/Hoop_1/Untitled10.png (http://s458.photobucket.com/user/Hoop_1/media/Untitled10.png.html)

[JohnnyTheHorse]

Looks like we're having a crack at that small ~530 resistance that's formed, so we will be testing 550 again if successful.

[BFG]

See ya $5.50 :)

[winner69]

See ya $5.50 :)

And the big boys are still on holiday

Methinks 6 bucks next week

[pierre]

See ya $5.50 :)

Looks like it's hit the ceiling at 549 at the moment. Let's hope it's a glass one that will be smashed next week when the big players get back from the beach.

[Baddarcy]

Sell side is looking a bit thin now.

[Whipmoney]

When's the announcement? Tomorrow morning?

[zigzag]

When's the announcement? Tomorrow morning?

I think it's more likely to be early Feb.

[pierre]

When's the announcement? Tomorrow morning?

Q2 was announced August 8 and Q3 announcement was November 7. That would indicate February 9 as the earliest date there will be any news.

[Schrodinger]

Q2 was announced August 8 and Q3 announcement was November 7. That would indicate February 9 as the earliest date there will be any news.

Interesting that ASB have 40% lending against these guys. Nice endorsement...

[pierre]

Looks like it's hit the ceiling at 549 at the moment. Let's hope it's a glass one that will be smashed next week when the big players get back from the beach.

Well, there's certainly been some broken glass around over the past few days - hit 580 this afternoon!
Could easily knock over $6 when the really big boys start back next week - who knows where by the time of the next announcement around February 9.
Nice!

[Monty]

Diligent results to be announced on 2 March 2015. I wonder if it will be same ole, same ole, (that is my guess) or they may surprise the pants of us by talking about what they doing with their stash of cash (close to $100m??) new product (not holding breath) Nasdaq listing (forlorn hope).

Diligent Board Member Services, Inc. ("Diligent" or the "Company") (NZX: DIL) today announced that it intends to release its financial results for the Fiscal Year ended December 31, 2014 on Monday, March 2, 2015 NZDT (Sunday, March 1, 2015 US ET). The results will be issued before 9:00 a.m. NZDT (3:00 p.m. US ET, Sunday, March 1).

[Crystal Ball]

Diligent results to be announced on 2 March 2015. I wonder if it will be same ole, same ole, (that is my guess) or they may surprise the pants of us by talking about what they doing with their stash of cash (close to $100m??) new product (not holding breath) Nasdaq listing (forlorn hope).

Diligent Board Member Services, Inc. ("Diligent" or the "Company") (NZX: DIL) today announced that it intends to release its financial results for the Fiscal Year ended December 31, 2014 on Monday, March 2, 2015 NZDT (Sunday, March 1, 2015 US ET). The results will be issued before 9:00 a.m. NZDT (3:00 p.m. US ET, Sunday, March 1).
Well if they are sitting on all that cash n not going to do anything with it, about time they decided to pay us patient shareholders some dividends me thinks! May as well be in our back pocket, not theirs....

[Lola]

Diligent results to be announced on 2 March 2015. I wonder if it will be same ole, same ole, (that is my guess) or they may surprise the pants of us by talking about what they doing with their stash of cash (close to $100m??) new product (not holding breath) Nasdaq listing (forlorn hope).

Diligent Board Member Services, Inc. ("Diligent" or the "Company") (NZX: DIL) today announced that it intends to release its financial results for the Fiscal Year ended December 31, 2014 on Monday, March 2, 2015 NZDT (Sunday, March 1, 2015 US ET). The results will be issued before 9:00 a.m. NZDT (3:00 p.m. US ET, Sunday, March 1).

Well at least they are keeping us informed nowadays. If the cynics that post on this thread decided to quit there'd be almost nobody left.