Diligent Boardbooks IPO

[lastmoa]

Well no real news sadly. I'm picking the downward trend will continue.

I don't see any news (Nasdaq, dividends) to make it shoot up wildly, but don;t see anything negative either, to bring SP down. I pick that it will track up to where it was - mid $5's. Could be some new news released soon ... never know. Fingers crossed and keep positive. At least Diligent is a profitable and expanding coy.

[robbo24]

Well no real news sadly. I'm picking the downward trend will continue.

Doubt it, with nice little articles like this: http://www.stuff.co.nz/business/industries/8370618/New-markets-triple-Diligents-profit

People love this type of thing...

[binary]

I only suggest a downward trend as profit taking continues. I would imagine it wont last long and think mid $5-6 would not be unexpected in the next month or so.

[The Rocket]

Guys if you look back to the 24/1/13 and 31/3/13 I told you there is going to be a takeover and told everyone the reason why even sparky said what nonsense but it is happening. Now I think DIL are deliberately trying to lower the share price to make the offer more attractive. This is what they are doing firstly a major shareholder director selling shares at 5.50 to cap the stock once it came out who it was and how many shares they had people went lower setting the price at 5.40 why did they not sell the shares off market like most large shareholders do. Then they halted trade for two days then got a one day extension to make things seem more serious than it was. It was really nothing that everybody didn’t already know they could have just put it on the news and not halted shares for 3 days more negatives share price down again and buyers disappear. Then they delay the preliminary 2012 annual results more share price down when they do announce they do it at 5.00pm Friday and for the first time you could not find the figures strange. I found the figures elsewhere but it was not easy as it usually is it was like they were hiding them. The result was good as usual but they do not want the share price to go up so they hushed it up by leaving it until Friday afternoon till after 5.00pm. I thought the share takeover price would be $8.00 but now I think $7.50 a share a 50% premium on the $5.00 price I think DIL want at point of sale. No Dividend again as I said they do not want to pay it. It is a cash sweetener for the sale I think it will be taken over by the June meeting. You heard it here first it has taken a month for you guys to take it seriously it all adds up. I hope I am wrong but I feel it is the only thing that adds up and makes sense. What do you guys think?:ohmy:

[JohnnyTheHorse]

Betch-yo-ass.

As time goes on, I'm beginning to think you may well be right. On the 14th of November 2012 they said:


The Board of Diligent has begun working with external financial advisors in the US to assist it with considerations of dividend policy and related capital market matters. The market will be informed of any decision of the Board following the conclusion of the review.

That was three and a half months ago and we have heard absolutely zilch about the outcomes. Could it really take this long? A director said that the results "will probably not be made public until early next year (2013)." The preliminary annual report sounded like the perfect time to announce, or at least update us.

Couple this with the investor presentations in the US (possibly actively trying to find a buyer?). Also, does anyone know who the whistle-blower was with the recent incentive scandal? Is it possible that it was a potential buyer trying to push the price down or something like that?

Ahhh, gotta love speculation :p. It could quite well be that they haven't released news on dividends or the nasdaq because they have been tied up with the recent saga.

[Halebop]

Ahhh, gotta love speculation :p. It could quite well be that they haven't released news on dividends or the nasdaq because they have been tied up with the recent saga.

I think this theory is as good as any.

[kizame]

Loving the EPS growth - from 4c to 11c in EPS (not including options), and from 3c to 8c when including options.

http://www.boardbooks.com/wp-content/uploads/2013/03/Diligent-Board-Member-Services-Preliminary-FY12-Results-Announcement.pdf (page 6)

This is outstanding performance. Yes, I know that growth can't last forever and will slow down to more normal levels over time, but there is plenty of growth left. Don't know what the market price is going to do on Monday but the share deserves to pop.

Sparky have I gone wrong with my calculations (not including options etc.) US$9,141,295 @ .8240 NZ$ 11,091,133.22 Net profit.

Shares on issue 83,736,155 (again not including options) 11,091,133.22/83,736,155 = .132 c/share.

and if that's the case then PE of 39-40 ? of course excluding options etc.

[kizame]

Shoot, plumb forgot, this is in USD!

Divide by .82, and yes, your numbers are right. God how did I forget this.....

however,I include options because everyone will surely exercise them, if you look at a five year horizon.

But does that make my PE ratio a ball park figure? or have i got that wrong Sparky.

[binary]

Guys if you look back to the 24/1/13 and 31/3/13 I told you there is going to be a takeover and told everyone the reason why even sparky said what nonsense but it is happening. Now I think DIL are deliberately trying to lower the share price to make the offer more attractive. This is what they are doing firstly a major shareholder director selling shares at 5.50 to cap the stock once it came out who it was and how many shares they had people went lower setting the price at 5.40 why did they not sell the shares off market like most large shareholders do. Then they halted trade for two days then got a one day extension to make things seem more serious than it was. It was really nothing that everybody didn’t already know they could have just put it on the news and not halted shares for 3 days more negatives share price down again and buyers disappear. Then they delay the preliminary 2012 annual results more share price down when they do announce they do it at 5.00pm Friday and for the first time you could not find the figures strange. I found the figures elsewhere but it was not easy as it usually is it was like they were hiding them. The result was good as usual but they do not want the share price to go up so they hushed it up by leaving it until Friday afternoon till after 5.00pm. I thought the share takeover price would be $8.00 but now I think $7.50 a share a 50% premium on the $5.00 price I think DIL want at point of sale. No Dividend again as I said they do not want to pay it. It is a cash sweetener for the sale I think it will be taken over by the June meeting. You heard it here first it has taken a month for you guys to take it seriously it all adds up. I hope I am wrong but I feel it is the only thing that adds up and makes sense. What do you guys think?:ohmy:



Considering the Directors of DIL are also major shareholders I can't imagine they would be interested in suppressing the share price to make a takeover more attractive, which I would agree with Sparky would be around $8.50 at current market conditions.

They are not stupid and like many of us on this forum believe that DIL has the potential to become a $10 plus stock over the next few years which with current performance isnt unlikely.

I would imagine no real news was announced as there is still discussions on how to appropriately compensate Alex Sodi (which has the potential to cost $10mil +) and once this is cleared up the current cash DIL is sitting on (minus compensation) will then be announced as dividends.

[kizame]

It is interesting to note while glancing at the chart,that DIL is currently oversold on Relative Strength,and if the share price turns,will form a divergence of the MACD A powerful retracement (up on this occasion)pointer.

[Balance]

Have a look at DIL's cash flow if you want to get a real idea of how the company is doing :

Cash :

31 Dec 2010 US$3.2m
31 Dec 2011 8.9m (+5.7m)
31 Dec 2012 33.3m (+24.4m)

Increase in cash is accelerating and for 4th Q of 2012, cash increased from $25.5m to $33.3m - $7.8m.

It is likely that cash generated will exceed US$10m per quarter in 2013.

And it's good sustainable cash flow from happy customers.

That is the real substance behind this company.

[JohnnyTheHorse]

Yep. A potential acquirer could use that cash flow to pay off the company purchase pretty easily.

What sort of time frame do you have in mind for a takeover announcement (assuming there is to be one, of course)? In my mind, it would be unacceptable for them to hold off mentioning what they have planned to do with their pile of cash for another month. People would start demanding answers. Therefore, would it be reasonable to expect one within the next month or so?

[Balance]

What sort of time frame do you have in mind for a takeover announcement (assuming there is to be one, of course)? In my mind, it would be unacceptable for them to hold off mentioning what they have planned to do with their pile of cash for another month. People would start demanding answers. Therefore, would it be reasonable to expect one within the next month or so?

Relax, JTH. The history of Diligent is the massive transfer of wealth from the impatient to the patient and the brave.

Examples :

1 March 2012 - sp $3.00
1 March 2013 - sp $5.20

Massive loss of 73% from those who lost patience and sold to those with patience in 1 year.

1 March 2011 - sp 84c

Indescribable loss of 519% from those who had no patience to those who had andare still holding today.

[Halebop]

Sparky have I gone wrong with my calculations (not including options etc.) US$9,141,295 @ .8240 NZ$ 11,091,133.22 Net profit.

Shares on issue 83,736,155 (again not including options) 11,091,133.22/83,736,155 = .132 c/share.

and if that's the case then PE of 39-40 ? of course excluding options etc.


Shoot, plumb forgot, this is in USD!

Divide by .82, and yes, your numbers are right. God how did I forget this.....

however,I include options because everyone will surely exercise them, if you look at a five year horizon.


But does that make my PE ratio a ball park figure? or have i got that wrong Sparky.


Yes, I think a p/e 40 is right, without options, and 57 if you include options.

Using Katselnelsons absolute P/E model, and assuming optimistic value for their business model, I come up with a value of $7.52, though I think I have underestimated the absolute P/E number. Am on the iPad and harder to work my spreadsheet in the cloud...

All the "diluted" shares statistics published by Diligent for the last several years indicate there are almost 120m shares. The 84m odd shares currently on issue plus options plus convertable preference shares (30m shares worth).

See the notes in the previous annual report relating to "redeemable" preference shares, 30,000,000 prefs convertable on a 1 for 1 basis (and as an aside but pertinent to mostly unfounded potential of takeovers, note the terms of the prefs which hand control of the any decision relating to major transactions to the single director that the preference holders nominate). The preference shareholders are Spring Street and recent share seller Carroll Capital

EPS and PE should be derived from diluted capital. EPS circa NZ 10 cents. Personally I though this was very good as it was despite a big jump in Administrative expenses in the last quarter. Were these expenses impacted by the cost of legal issues? Anyway, current PE 52. Earnings should more than double this year. Assuming constant currency and no major changes (nor material new product launches/extensions) I'd estimate diluted EPS in the range of NZ 21 to 23 cents. With forward growth of more than 50% due the following year and prospects of product extensions, a high PE should be assured.

Assuming that we do get a dividend at some stage, my theory is it won't be paid until the preference shares have been converted. The preference holders control this company.

[Balance]

Agreed it is necessary to calculate EPS based on options.

I make EPS in NZ cents around 9.23c, being $9.141m USD divided by 120m shares and options, then divided by 82.5 for the currency.

Have a look at the cashflow multiples, STC.

Then you see the real magic of DIL's business model.

[robbo24]

That value ($3640 x 364000 shares) would equate to around $15 per share - hopefully, moosie!

[JohnnyTheHorse]

Someone has put in an ask for $3640 a share. Have no idea what they were thinking...

Or is it an omen of a takeover looming???

Insider trading, without a doubt :t_up:. On a more serious note, looks like a lot of sellers have backed off and quite a few buyers are starting to appear. Hopefully the start of a rebound after the recent selloff.

[Halebop]

Nah, looks like they just doubled up on their fields for price/quantity

So, 3640 x 3640= $13,249,600

Nice little score there if all the other bids go away and some one buys "on market"!

I was hoping they succeeded. Would have augered my entry to the rich list! :t_up:

[JohnnyTheHorse]

DIL is certainly looking pretty cheap right now. I was happy to have pretty much picked more up at the bottom, but I wasn't going to be too fussed if I missed it. There shall be some very good times in the near future for shareholders I'm picking.

[kizame]

Yep the bottom as told by the charts,but although a great company,won't be betting more funds,there will be plenty more opps down the track without overloading, But a way better bet at this stage than xro in my opinion.

[Balance]

Best thing the directors of Diligent can do is

a) work on growing the business
b) work on ways to maximise shareholder wealth, either through a Nasdaq listing, a dividend/share buyback, or by encouraging a takeover.

Which brings me to tomorrow.

It may well be that a dividend or buyback is not offered tomorrow, and that no real mention of a Nasdaq listing is made.

if so, I would take this to mean that an acquisition is on the way.

We know that one of the best tools for encouraging takeovers is lots of cash and no debt (which DIL has).

By keeping the cash on hand, DIL may be "baiting" potential suitors. And what's the point in a Nasdaq listing if suitors are sniffing?

So it seems to me:

- No Nasdaq listing, no dividend declared, no share buyback = acquisition may be coming OR business as usual and directors are lazy/useless.
- No Nasdaq listing, dividend declared/share buyback made = business as usual, no suitors on the horizon, time to reward shareholders
- Move to Nasdaq/joint listing = share price and earnings growth to come for some time yet, or DIL needs more publicity with possible suitors

Just my 2c worth....

So it's "No Nasdaq listing, no dividend declared, no share buyback = acquisition may be coming OR business as usual and directors are lazy/useless.?"

[JohnnyTheHorse]

I only really see two possibilities (as I don't think the directors are useless!):

1. An acquisition is looming.

2. DIL is sorting out issues regarding the excess options before they do anything. They need to work out how much it will cost them to compensate Alex Sodi before they can announce a dividend. They would also want this issue solved before any move to the Nasdaq.

Either way, I see some serious capital gains coming our way :eek2:.

[robbo24]

still looking rather downbeat.

No way moosie, CHCH is where it's at. Still no boy racers because of the pot holes. There's money everywhere too!!!!!!!!

[Monty]

Massive numbers of shares have transferred / sold today. 225,000 shares as at 4:00pm. The price is stable at $5.39-$5:40. Does anyone understand the reason for the sell off? the average size of a parcel today was 5366 per transaction. Will the 5000 sized parcels dry up and put pressure on the market leading to price increases. Sorry for the dull questions but I am a recent investor back in the sharemarket and DIL is so far my only significant holding. (which I bought about a year ago)

[robbo24]

Massive numbers of shares have transferred / sold today. 225,000 shares as at 4:00pm. The price is stable at $5.39-$5:40. Does anyone understand the reason for the sell off? the average size of a parcel today was 5366 per transaction. Will the 5000 sized parcels dry up and put pressure on the market leading to price increases. Sorry for the dull questions but I am a recent investor back in the sharemarket and DIL is so far my only significant holding. (which I bought about a year ago)

Maybe to do with "SSH: DIL: Disclosure of ceasing to have substantial holding - 02:37p.m."?

[Balance]

Hey Monty. Go back and see my previous posts about a certain "Mr Carroll" and find the SSH notice on him this year. Has a huge number of shares and is offloading them in 5000 parcels which is capping the SP. Very unfortunate, as there are plenty of buyers that should be pushing this stock way up...

Treat it as a buying opportunity.

Remember Brian Henry was doing the same - all the way from 35 cents upwards.

Some of us helped him out (reluctantly dare I say at that time, as we thought he may know something we don't) at around 40 cents.

[JohnnyTheHorse]

Quite a large off market sale just made (~1.2M shares).

[JohnnyTheHorse]

Yes, has been a lot of that lately. Something is in the pipe me thinks...

Update: $5.50 has been broken through and the all time closing high of $5.61 is in range of being overtaken. Sellers drying up fast. XRO move over!

DISC - Holding

It's just holders of XRO selling up (as they have realised it's massively overpriced) and buying into DIL as it currently represents very good value ;)

[Halebop]

Well, I have some reasons to be happy today. Pleased I picked up an extra 15k at $5.25 on Monday.

On Sparky's spreadsheet of eternally optimistic lies, I put a price of over $7 on DIL based on the recent earnings update.

Total exaggeration... I had $6.91 on a DCF calculation (Growth diminishing from 120% to 20%pa over 5 years, 3 or 4% termination, 12% discount)

[Monty]

we are only three weeks away from the end of the first quarter (and subsequent reporting a week or two later) and also the release of the 2012 report. What I will be looking for in the first 1/4 report is growth in the sales which have been at the $6m range per quarter for the past five quarters. The break into the Asian market as well as continued growth in the North Ameria and Europen markets and the establishment of bigger sales teams, as well as the 97% retention and the 100% inbound sales enquiries must bode well for increases in new sales per quarter during 2013. In addition the latest report released 1 March states 　


The efforts to improve the Boardbooks offering are ongoing, and we have no doubt that the product at the end of 2013 will be even better than the product it is today . very interesting times ahead.

[JohnnyTheHorse]

Kicking myself right now. Was on the verge of buying another 10k worth at 5.70, but decided to wait just a tad longer to see how it would play out. Should have followed my instincts!

[robbo24]

$6.00 hit with no sellers in site. Today is looking goooooooooooood!

Two off-market trades totaling 550,000 shares @ $6 ea too... Nice.

[lastmoa]

I like the tracking up of this movement (on volume) more than that with XRO. Nice vol's. Deserved pricing. Glad I overextended myself and loaded up in the low $5's. Am overweight on Dil ... but happy.

[Xerof]

Just another day at the office for the faithful...:sleep::sleep:

[Balance]

Have a look at DIL's cash flow if you want to get a real idea of how the company is doing :

Cash :

31 Dec 2010 US$3.2m
31 Dec 2011 8.9m (+5.7m)
31 Dec 2012 33.3m (+24.4m)

Increase in cash is accelerating and for 4th Q of 2012, cash increased from $25.5m to $33.3m - $7.8m.

It is likely that cash generated will exceed US$10m per quarter in 2013.

And it's good sustainable cash flow from happy customers.

That is the real substance behind this company.

For the believers who not only hung in there but bought more.

[JohnnyTheHorse]

Those sellers are drying up awfully quickly. Hopefully the guy who saw good value in snakk at 40 cents makes the leap to $8 in DIL :t_up:

[JohnnyTheHorse]

lol, sellers will come out of the woodwork before then. Broken my old record for most profit in one day. Getting antsy now!

Patience, we're still well off fair value!

[Balance]

Is that you selling 25000 at 7.30 Sparky? There's a little clown face next to the sell order on the list :p

Giving it away at $7.30!

Nobody is going near mine until at least $8.60.

[kizame]

Giving it away at $7.30!

Nobody is going near mine until at least $8.60.

Thats probably what a few people said about XRO,now look.

[Jay]

Somebody know something the rest of us don't???? and hence the stellar increase today or is it just feeding itself

[ddrone]

I'm not selling until my shares are compulsorily acquired. :-)

If we expect Diligent to improve EPS to around 15c NZD, and can maintain growth at around 45% for the next few years, then I see DIL with a FY2014 price of just over $10.

That's not hard to imagine.

I've been watching DIL for a long time and am kicking myself for not getting in at $5.20 a week back. Currently hold RYM, you seem to hold both - which do you regard as better for fast growth? RYM seems very slow of late..

[tosspot]

Im guttered i missed yesterdays run. each time it went up i thought surely it wont go any higher. but jumped in towards the end at 6.26 purely because of what happened to xero sp. im either an idiot or hoping on the train.

[kizame]

Im guttered i missed yesterdays run. each time it went up i thought surely it wont go any higher. but jumped in towards the end at 6.26 purely because of what happened to xero sp. im either an idiot or hoping on the train.

You will be fine.
believe in what you have invested in,I thought just like you when I bought in at 3.60 something haha and now look.

[Balance]

You will be fine.
believe in what you have invested in,I thought just like you when I bought in at 3.60 something haha and now look.

It was hard to buy at 38c, then $1.10, then $2.50, then $3.80, then $4.00 etc.

That's the beauty of an uptrending stock - the rewards go with the efforts.

Compare that to those who bought and kept buying Rakon. So easy to buy all the way down as you get more and more shares. No rewards though - just more useless shares.

[tosspot]

yea im feeling quite confident about it now. really cant see it going backwards. hopefully touches $7 by the weeks end.

[robbo24]

Moose, $7.00 - just putting it out there.

[CJ]

starting to wonder if we were just getting greedy?The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.

[iceman]

The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.

Somone is being greedy indeed. Over $ 9m turnover in first 12 minutes ! Not a bad start to the week.

[CJ]

Somone is being greedy indeed. Over $ 9m turnover in first 12 minutes ! Not a bad start to the week.
Iceman: You can be my wingman any time.
Moosie 900: Bull****! You can be mine.

[Jay]

No sellers less than $8:00 at time of writing
This increase is not just from their sales/profit reports - Inside knowledge feeding the rises, not that I am complaining having got in at $3.50 a bit late I know !

[GR8DAY]

The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.



OH DEAR......WHOSE THE DROP KICK TODAY?....."GREED IS RIGHT, GREED IS GOOD"..........what the hell are you on buddy. Perhaps THE most ridiculous comments yet to make there way onto SHARETRADER............get a grip CJ, you are an embarrasment to this forum!! CREATING WEALTH FOR THE BETTERMENT OF ONESELF AND MANKIND IS OK..........GREED IS NOT.!!

"THE UPWARD SURGE OF MANKIND".....ha what a joke.........dont you mean the downward spiral of values/morals/ethics/empathy (society) as well as the destruction of our fragile planet.........all as a consequence of GREED..........not to mention of course the destabilization of the global financial system!

[TimmyTP]

OH DEAR......WHOSE THE DROP KICK TODAY?....."GREED IS RIGHT, GREED IS GOOD"..........what the...
Could you be missing the irony?
Rgds,
Gordon.

[CJ]

OH DEAR......WHOSE THE DROP KICK TODAY?Never seen Wall Street? Good movie, even if you dont agree with the ethics. Skip the sequel.

Even funnier is "Boiler Room" (based losely on "The Wolf of Wall Street") where these young brokers actually know that quote of the top of their heads.

Back to real life:

One does have to wonder what is causing the buying pressure. The price was being held down post the latest announcement by the big seller. But now for it to be rocketing up so much ??? Is everyone just buying into the speculation that has been on this forum or are there some insiders at work? Just because nobody wants to sell, doesn't mean that you buy at any price.

I guess the same could be said for XRO. Rising so quick with no real new news. I think I would be looking to lock in some profits if I hadn't already sold out.

Disc: Happy to hold DIL at this level but not interested in buying more. Sold XRO last time it peaked and missed the reentry.

[Balance]

Yes I would be suspicious of rises like these, but at least DIL has the money to back it up, XRO only has growth and a growing debt burden so I am more than happy to hold DIL rather than XRO. Something is happening behind the scenes watching those large off market trades, guess we shall find out soon.

The rise in SP is like watching those Bollywood music videos; you don't understand what's happening, but you're mesmerised nonetheless!

One suspects that an announcement on 'capital initiatives' has been delayed due to the hiccup associated with the options/renumeration stuff-up.

Once that is fixed, an announcement is almost inevitable?

[GR8DAY]

GR8DAY is Carl Fox: "Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others."

CJ is Gecko: "It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another"

I like to think of myself as Bud Fox: "Life all comes down to a few moments. This is one of them."




DOES THAT MAKE ME YOUR BROTHER OR YOUR FATHER MOOSE?? (probably the latter)

[GR8DAY]

lol, going on the average age of posters on here, you would be me granpappy :p



ha LOL.......if you keep posting Moose at the rate you do your guna be old before your time so you might catch me up!!.........(more your fathers age FYI)

[Balance]

Treat it as a buying opportunity.

Remember Brian Henry was doing the same - all the way from 35 cents upwards.

Some of us helped him out (reluctantly dare I say at that time, as we thought he may know something we don't) at around 40 cents.

Hope some of you took the buying opportunity presented by Mr Carroll selling down.

Life is made up of moments and generous people like him.

[PlatnuM195]

Been keeping up with the news for a long time now but was wondering, where did the talk of an acquisition originate from? Was it mainly speculated from the size of their cash reserves, or was it from some analyst comment?

[CJ]

I picked up a small amount (15,000) at $5.25 last Monday. Most of my holding was bought as low as $1.35 and at points around 2.50 and 3.80. Avg price around $2.65, but I have a lot of DIL now.

Am tempted to take some of the top off at $6.75 to de-risk, but will hold off for now. I acknowledge this might not be smart, it could be wise to de-risk. But I am puzzled by something.

You see, what I can't work out are the large volumes. Now what am I supposed to make of large volumes of DIL being bought over the last week at higher and higher prices? There aren't any SSH notices being announced as buyers (I've seen ACC sell down a little this afternoon), and it doesn't look like mutual fund behaviour. There could be many reasons for this turmeric, and I wouldn't want to get everyone's hopes up.

But, hypothetically, what if the big kahuna is coming, and they've been aggressively buying so they have a 10% plus stake lined up through confederates when they announce? And what if they can then argue that the buyout price they offer is determined by the price of DIL before they first started acquiring? Eg - premium of 50% on $5.50 or so rather than the $6.sixtychrist being quoted now. (Apologies for the blasphemy in advance)

I freely admit this is one of many hypotheses that could apply to DIL's recent price rise. And I'm not saying I'm right. Just that I've seen a couple of takeovers at work before, and this looks kind of like the run up to one.It could also be US Hedge funds picking up on the same rumours (or maybe the odd wink) to ensure the actual purchaser has some guaranteed sellers lined up.

[moimoi]

So it isn't aware of information in relation to the "percent price increase"... is it aware of information in relation to the recent volume increase? ;-)

Well Done holders...

[Xerof]

Interesting that XRO hasn't had a similar ticket issued yet...

speeding tickets usually require % and​ volume

[Baddarcy]

speeding tickets usually require % and​ volume

Interesting...

Question from NZX "Given this increase in the price of DIL, and the recent rise in volumes, please advise NZX
whether Diligent Board Member Services INC continues to comply with Listing Rule 10.1.1."

Answer from DIL "Dilligent is not aware of Material information that has not been released to the market in terms of listing rule 10.1 that has lead to this percent price increase"

Note they only answered half the question and not specifically the right point either. So much for improved governance!!

[blobbles]

Hate to say it but I feel this points to some non-disclosure going on here. How long that continues for or whether they will be penalised (or even investigated) if its true remains to be seen.

And like Baddarcy said, they only answered half of the question asked. Maybe they are being so aloof (but sounds more like "why do we have to tell you anything?") because they are going for a full NASDAQ listing soon and so won't be beholden to such laws required by the pitiful NZX? Guess we will know soon, but to me it appears someone knows before the rest of the market does.

If the volumes were low, I would think differently. But 8 million on Friday and 10 million so far today? Somethings going on.

[Xerof]

IMO, certainly somethings in the wings, but they do not have to comment on both price movement and volume (some may have misinterpreted my first comment), merely declare that there is no information that can and should be released.

moosie, this is only at the NZX level, not FMA

[CJ]

IMO, certainly somethings in the wings, but they do not have to comment on both price movement and volume (some may have misinterpreted my first comment), merely declare that there is no information that can and should be released.

moosie, this is only at the NZX level, not FMAThen why did they phrase it like the did. The part in bold would be unnecessary:

Answer from DIL "Dilligent is not aware of Material information that has not been released to the market in terms of listing rule 10.1 that has lead to this percent price increase"

Semantics yes but does make you wonder if they choose those words specifically.

[Silverlight]

ACC has sold another 900,000 odd shares, good time to take some profits.

[Xerof]

Then why did they phrase it like the did. The part in bold would be unnecessary:

Answer from DIL "Dilligent is not aware of Material information that has not been released to the market in terms of listing rule 10.1 that has lead to this percent price increase"

Semantics yes but does make you wonder if they choose those words specifically.


pass CJ

moving on

On the basis ACC is selling at market, I personally conclude it is not likely to be a takeover. Usually side agreements are done with major holders, with price escalation clauses in place to protect the seller from missing out on higher offers at a later date.

this leaves dual listing or divi in the mix, or maybe its simply the dawn of realisation by johnny-come-latelys that this is a boomer of an outfit!!

[Silverlight]

Ever thought ACC might be selling down for Mighty River?

I say hold, no way am I selling!

ACC have 17b FUM, with 6b FUM in govt bonds, a futher 5b in NZ corporate bonds and over 200m in cash, they don't need to sell down to buy MRP, even if they were going to take a stake.

Sale of 600,000 shares for net consideration of NZD $3,290,100 on 7th March 2013, at $5.50. They sold another 300k odd prior to that as their holding is now 5.2m shares from 6.1m.

[JohnnyTheHorse]

I've stopped trying to guess what's going to happen and when, and am just going to be patient and see. I've realised that pretty much no matter what happens, I'm going to be making some pretty good money :p.

[lastmoa]

Thank you to those above who have appreciated my thoughts on Diligent's intrinsic value. It's a wonderful company - those who hold are indeed wise, smart and hopefully much wealthier!

Sharetrader readers will have seen i've given an intrinsic value of over $7 for Diligent based on earnings for the trailing twelve months (EPSTTM). To be precise, I assess IV on EPSTTM of 9.1c to be $7.30 or so.


However, we are now in a position where Diligent needs to be considered on EPS for the future twelve months (EPSFTM). Now, we don't know what this will be, but we do know that Diligent grew by over 100% last year, and presumably could average 45-50% per annum over the next five years. EG, the next two years around 80-100% and the last two years in that five year period around 20-30%.

Let's look at some options, all assuming average growth of 50% over five years.

If we think EPSFTM is 14c, IV is $10 or so

If we think EPSFTM is 15cps, IV is $10.75 or so

If we think EPSFTM is 16c, IV is 11.50 or so

If we take the average of my IV estimates for 2012 and 2013 then a potential price for acquisition this year should be around $8.65 - $9.40

I say this not because I am trying to get people excited in huge profits, but to illustrate that this company is worth paying a premium for, should someone come-a-knocking. It is spitting out cash, it's growth rate is phenomenal and its product is near-bulletproof. Do not think of Diligent solely in 2012 terms....

Yes, Appreciate your insight, Sparky, and certain others on this board, on this stock and others. Indeed the company is worth paying a premium for and congrats to all that hung on in and even were buying whilst the price was being suppressed (imho). This rise (on volume) is justified and the next couple of months will be very interesting for this stock. Congrats for all for the patience to still be in on this. I read with amusement the brokerage 'expert analysts' take on the rise (or lack of), in the media.

[tosspot]

Looks like today will be a bit of a sell of for profit day maybe even next few days but will uptake again after that similar to what xero did at certain walls it hit.

[Baddarcy]

My my my, gone very quiet on the markets today for DIL. Down 1c and just under 45,000 shares traded.

Looks like we might be in for a settling day, let the dust settle.

The speeding ticket and subsequent notice from DIL saying there is nothing in the wind looks to have taken the wind out of DILs sails.

Guess we wait for the next quarterly now, mid April.

[Baddarcy]

I think there is still some upside potential left, that sell side is still looking thin, and with a major seller gone it could continue to push. MACD loop is far from being completed yet...

maybe...(hopefully !!)...but the buy side is looking even thinner at the moment

[Balance]

Milford selling down a bit and taking profits. Hmmm...

Just prudent thing to do - they are now grossly overweight DIL and still have $40m invested in this one stock.

This has been the stock which gave Milford its exceptional fund gains in the last 2 years. Other stocks like Ecoya and Moa had their moments for Milford but have not gone anywhere.

So they will be looking for the next supernova performer. And I think they are thinking hard about one that is already rock and rolling ahead.

[CJ]

Milford is followng Belgie's posts ... be very careful here folks ... with IT startups you need to know when to get out ...Milford only took about 10% of their holding off the table. Given their entry point, they are probably still overweight. If we see more selling by them it could be a concern.

[JohnnyTheHorse]

Milford is followng Belgie's posts ... be very careful here folks ... with IT startups you need to know when to get out ...

DIL is no longer an IT start up - they are a solid company with a proven market, proven growth, proven management and proven revenues. The best place to get out with a company like this is when your shares get acquired. It's not like the SP is over-hyped as it's trading below fair value.

[Xerof]

Milford is followng Belgie's posts ... be very careful here folks ... with IT startups you need to know when to get out ...

LOL

Belg, you're suffering from unrequited purchase syndrome. Putting the ****s up DIL holders with such comments is most unbecoming of a person of your immense status and character

ps whatever happened to your double top at ~$3.70?

:D

[CJ]

Milford only took about 10% of their holding off the table. Given their entry point, they are probably still overweight. If we see more selling by them it could be a concern.


Milford still selling down...mmm - another 20% sold. Due to closeness, it is part of the same decision but still concerning.

One think I have been wondering about is mandates. They (and ACC etc) will have set mandates about what they can hold. It could be that the price has risen so much that they are outside their mandate (overexposed to a share) and are being forced to by the trustee, notwithstanding what they actually think about the investment. Has anyone looked into this before?

[Monty]

Diligent went to a peak of $6.80 early this week before settling back and gradually settling (as it seems around $6.30. In a couple of weeks the first quarter is completed and shortly thereafter the forst of the 2013 quarterly reports will be published. With a little bit of selling down and prfit taking does any one expect a reasonable lift when the first quarter results are published.

[Xerof]

(Sparky has worked for a Kiwisaver provider before, so that is why I know that they will have trustees telling them it is unacceptable to hold so much money in one share, particularly if they are looking after people's Kiwisaver funds)

This is one of the great conundrums of being a fundie I guess, you are forced to trade out of your most successful holdings....

the result is mediocrity

[blobbles]

mmm - another 20% sold. Due to closeness, it is part of the same decision but still concerning.

One think I have been wondering about is mandates. They (and ACC etc) will have set mandates about what they can hold. It could be that the price has risen so much that they are outside their mandate (overexposed to a share) and are being forced to by the trustee, notwithstanding what they actually think about the investment. Has anyone looked into this before?

No need to ask that question I think - of course they need to sell down when a stock price shoots up. It's an arse covering move, they may know that the stock still has room for growth buy they are forced to sell down due to an apparent over reliance on one stock. If that stock were to suddenly drop, the people with their money in the fundie would scream bloody murder as they would claim they were over exposed to it. I think this goes back to investor psychology and people feeling losses much more than gains.

Also, these guys only have to lock in a certain % raise each year. If they can lock that in by selling down, they will do it. This ensures they keep their jobs and looks great for their performance.

But in saying that, its great for us small guys to take some more shares in growing companies!

[Balance]

Some big exercising of options by staff and directors today..... Those options aren't much use in a potential takeover bid until they are converted to shares......

Usually takeover offers recognize options and offer market values for them.

[CJ]

Some big exercising of options by staff and directors today..... Those options aren't much use in a potential takeover bid until they are converted to shares......Most options would convert in the event of a takeover.

They are probably converting so that the options cant get taken off them like they had to for the CEO ;)

I would look more at the tax treatment for employees. In NZ (not sure of US), in a rapidly increasing company, it is best to exercise asap to minimize the tax.

[Xerof]

Looks to me like a catch up disclosure of the acquisition of unlisted options under various of the employee stock incentive schemes - rather than the exercise of those options – so I am not sure there is anything in it apart from tiding up late paper work.

correct, not converting, but seems to be simply an update? No longer even sure it's late on reflection

[CJ]

Sparky - That comment is also direct to you re "New Product".

[Balance]

Yes, you will note my comments from 24 October may seem prescient.

http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO&p=383951&viewfull=1#post383951

Makes sound, logical and good sense to me for Diligent o be developing and evaluating such a product - an extra US$5000 a year from their customer base = big bucks!

[JohnnyTheHorse]

Note that they didn't actually say that they weren't developing a new product in that statement.

[CJ]

Note that they didn't actually say that they weren't developing a new product in that statement.I noted that as well. Their press releases seem to be very considered, hence my comments re the last speeding ticket and only commenting on price, not volume. It looks like they choose their words carefully.

[Baddarcy]

Note that they didn't actually say that they weren't developing a new product in that statement.

I'm still left wondering why they bothered to make the statement at all?

Its referencing a FNZ report from 3 months ago for goodness sake ! Who cares ?

But on a positive note, the market has taken it better than i expected it to, actually much better.

[Balance]

It may be that other researchers are saying "How come you told FirstNZ about XYZ and not us?"

Me thinkth you probably hit the nail on the head, STC.

Having said that, FNZC has been covering the stock in full and properly now for over 4 years so they do know the company very very well. Good on them as their clients have done very well out of their coverage and recommendation.

I asked another major broking firm what their analyst think of the stock and the firm was honest enough to say they only started looking at it last year but found it too hard to analyze!

[lastmoa]

Jesus wept, that's appalling. I know that Forsyth Barr have been thinking about getting DIL covered. By the time they do get around to covering it, the company may be acquired or listed in the USA only!

Forsyth Barr have research on Moa Beer. Go figure on priorities.....

Before I got my sh**e together and set up an online trading acct I was using a full-service brokerage service with a major firm. Never used their advice but they always wanted my opinions on tech stocks. One way traffic. They admitted that they didn't follow Xero or Dilgent because they didn't understand their model. Didn't fit their mould for a standard 'normal' company.

[Balance]

Before I got my sh**e together and set up an online trading acct I was using a full-service brokerage service with a major firm. Never used their advice but they always wanted my opinions on tech stocks. One way traffic. They admitted that they didn't follow Xero or Dilgent because they didn't understand their model. Didn't fit their mould for a standard 'normal' company.

Sadly, this is the state of the broking industry in NZ today. There's hardly any coverage of stock beyond the top 20 stocks although brokers will cover their 'pet' stocks - typically stocks which they have brought to the market or done a corporate deal on. And as we all know, you do not want to believe too much in the research of their pet stocks!

What we have is a massive dumbing down process with brokers all chasing clients to leave 'funds' with them so that they can charge them 1% a year. They in turn leave the funds with managed funds who in turn charge another 2% or more! If things go wrong, the brokers blame the fund managers and the fund managers in turn blame the market or the companies for misleading them!

So those looking for exponential gains on the market are going to have to do more of their homework and get set before the brokers finally come onboard.

Meanwhile, be extra careful of the offerings from brokers!

Good example in recent years is Forsyth Barr's Credit Sails. The Commerce Commission inquiry into the product found that some Forbar brokers were shoving the product, irrespective of its appropriateness, into some of their captive portfolio clients' accounts. When the product went belly-up, Forbar's initial reaction was to blame the GFC. They have had to cough up to compensate clients' losses since then but not before some very telling revelations about the inner workings of the practices of the firm!

http://www.chrislee.co.nz/index.php?page=taking-stock

Excerpt : "If that is the case a public-minded lawyer may well be looking at the issues that result from the release of the pre-float papers which speak so loudly for themselves.

Those papers spoke of the slanting of information to attract “flies” to the “honey” – that is investors to a deal that was to be lucrative for Forsyth Barr.

The Strategic Finance preference shares, another Forsyth Barr offering that produced zero returns (like Credit Sails) was done in that era, as was the South Canterbury Finance preference share issue, (also a zero) and their marketing of Feltex shares might also now have a new hue to it, which might interest the stung investors.

If an environment was such that investors could be seen as “flies” and the balance of information supplied was “Aerosol” then do those who lost from these issues now have fresh hope?

The release of the documents from the Credit Sails compensation enquiry also raises an issue about the media.

It seems the media badly misrepresented Forsyth Barr’s current beleaguered chief, Neil Paviour-Smith, a young man with a background in National Mutual Insurance where he worked for an abbreviated time in his formative years.

Paviour-Smith was quoted four years ago, obviously inaccurately, as saying that Forsyth Barr was only the broker to the Credit Sails issue, had little to do with the development of the Credit Sails product, and was not responsible for it.

He was quoted then as presenting a strong case to discount any Forsyth Barr accountability for any prospectus misrepresentations.

Clearly he was mis-quoted for the truth was that Forsyth Barr initiated the offer, fought for it to be made, and sought to have a strong influence in the presentation of the facts.

The released Commerce Commission findings tell us that.

Paviour-Smith was quoted then as being dismissive of any Forsyth Barr liability for the product’s misrepresentation.

Clearly he was mis-quoted for he has since told investors how long and hard he has fought to get compensation for investors, despite being restrained by a blackout on comment, and how proud he is of the victory he has had by achieving this excellent outcome for investors.

It is as well that he has clarified this for one cannot infer this from the documents provided.

The Commerce Commission may feel that it alone played the hand to achieve the level of compensation and may feel it had to strong arm squealing opponents. It is of great comfort to know that Paviour-Smith was a key help to the commission.

One imagines Paviour-Smith would apply that same vigour if there were any similar circumstances in the build-up to the issues from Strategic, South Canterbury Finance and Feltex."

[Mobius]

This was an entirely new market, and Brian Henry's vision was entirely correct: It was a little late, but (and it's a big but!) not a dollar short! It took some time for the product to become highly regarded, and to scale easily, and the 21st century solution to an 18th century problem finally found its niche in cost savings and director convenience, all backed up by the best 24/7 "Concierge Level Support" in the world. That's why the retention rate is 97%.

The Apple iPad is what really made Boardbooks fly. Even Apple itself had no idea the iPad would be so heavily adopted by business, and had it squarely targeted at the living room. This was evidenced by the extreme length of time it took them to get the iPad ready for corporate use. Diligent DID see, very early on, that the iPad was the perfect device for Boardbooks, and embarked on a native-app development process immediately, eventually ensuring sales would go ballistic.

So, it is hardly surprising an old-school stock broking firm would have extreme difficulty analysing the business.

[Balance]

This was an entirely new market, and Brian Henry's vision was entirely correct: It was a little late, but (and it's a big but!) not a dollar short! It took some time for the product to become highly regarded, and to scale easily, and the 21st century solution to an 18th century problem finally found its niche in cost savings and director convenience, all backed up by the best 24/7 "Concierge Level Support" in the world. That's why the retention rate is 97%.

The Apple iPad is what really made Boardbooks fly. Even Apple itself had no idea the iPad would be so heavily adopted by business, and had it squarely targeted at the living room. This was evidenced by the extreme length of time it took them to get the iPad ready for corporate use. Diligent DID see, very early on, that the iPad was the perfect device for Boardbooks, and embarked on a native-app development process immediately, eventually ensuring sales would go ballistic.

So, it is hardly surprising an old-school stock broking firm would have extreme difficulty analysing the business.

You are assuming that the old-school stock broking firm :

1. Cannot keep up with the times?

2. Can analyse 'old' businesses anyway? Feltex and Rakon come to mind!

That is, what they think they know and can research blew up but what they do not think they know and do not research go ballistic into the stratosphere?

Sad indictment on the industry?

[kizame]

This from xro this afternoon.

??"A US listing is certainly something a business with global aspirations
would consider. We have been advised it would not make sense to consider a
listing in the US until we can see at least US$100 million of revenue.

So why would dil consider it at this stage,I think depending on revenue,it is unlikely DIL will list in the next couple of years.

[CJ]

This from xro this afternoon.

??"A US listing is certainly something a business with global aspirations
would consider. We have been advised it would not make sense to consider a
listing in the US until we can see at least US$100 million of revenue.

So why would dil consider it at this stage,I think depending on revenue,it is unlikely DIL will list in the next couple of years. DIL doesn't need as much revenue to justify its business model (since it is profitable) as a loss making company like XRO.

DIL has annual license revenue of $25m vs XRO of $44m yet is turning a profit on fantasic margins. That is why XRO needs $100m and DIL doesn't.

Having said that, you could be right.

[CJ]

DIL has annualised licence revenue of over USD$50m. :)my bad, I was looking at the "new revenue" figure.

Why is XRO worth twice as much.

[kizame]

my bad, I was looking at the "new revenue" figure.

Why is XRO worth twice as much.

Maybe it is considered that XRO has the higher growth potential,where they have many many accounting customers that don't need boards and directors.

[lastmoa]

From todays '10K announcement' I got off nzx.com, two things stood out for me :
Namely that the R&D spend is going up nicely - 10% increase from 2011.
and
on pg25 under 'revenues' this comment :
The Company recognizes revenue ratably over the contract period, which is generally twelve months. Accordingly, the full impact of the growth in subscription agreements will be recognized over the next twelve months. All of the deferred revenue of $17.6 million recorded on the balance sheet at December 31, 2012 is expected to be recognized as revenue in the next twelve months.

Looks like, as expected, they will incur increased expenditure so as to implement remedial measures to improve compliance and regulatory requirements.

Nice to see liquidity of $33.4 million. 8-)

Didn;t know they had an office in Hong Kong, in addition to Singapore - nice to see some focus on Asia.

[Halebop]

Personally think the argument has less to do with Diligent and more to do with macro strategy. If we are in a low growth environment, growth companies are coveted and bid up. As economic growth perceptions ratchet up, the relative merit for growth companies diminishes.

My take is that the global economy still has 2 to 3 years of low growth ahead and therefore growth investments are still relatively attractive.

Because I think the shares are worth almost $7 now (using 12% discount rate), then they are worth almost $8 in a year. On top of that the cynical part of me thinks the market normally over-shoots valuation and I don't believe we have gone there yet.

But growth investing is not for the fain hearted - the volatility of DIL over the last few weeks is perhaps more than some people can handle?

On the annual results - everything was pretty much as expected. There was a clear warning in the notes that profts may (I think will) take a hit around options/compensation/fines. This isn't what we wanted but suspect the market will be looking through that by the time it happens. My view is that there is little chance of takeover while there is uncertainty around profit reporting... but feel free to talk it up!

[lastmoa]

Got this recent positive brokerage (First NZ Capital) coverage :

Diligent Board Member Services (+2.5%): We are introducing DIL to our portfolio following initiation with an Outperform rating. DIL is an attractive business model with strong cash flow and remains in a strong growth phase. DIL continues to trade at a significant discount to global SaaS peers and remains one of our strongest conviction Buys.

[lastmoa]

Is this reporting seeing into the future? 8-)

http://www.stuff.co.nz/business/market-data/8455482/Strong-GDP-figure-boosts-shares

Xero led gainers on the local bourse. The cloud accounting software firm continued its rapid acceleration, rising 3.5 per to a record $11.90.

Software provider Diligent Board Member Services also rose with a gain of 1 per cent to $11.90, after its annual report showed rapid growth in 2012.

[CJ]

One thing to add Sparky - Revenue figures for DIL are historic (I think based on US47m converted to NZD )whereas for XRO you are using current run rate. Profit for year to march for XRO is forecast at $38m I think. Given their revenue figures are growing significantly each quarter/month, you should be using consistent metrics (either historic or current run rate) so either XRO is even more overvalued than you say, of DIL even more undervalued.

You will note that XRO always mentions an annualised current run rate to make its revenue figures look better.

[winner69]

Moosie ...get back to work .....the boss is watching

[Halebop]

I think the question is then, why is DIL's inherent value not being recognised? And if XRO falls out of favour, will DIL see SH's flock into it?

XRO is not a viable benchmark for DIL. We are comparing two companies with little in common other than they are both listed on the NZX and both claim the "SaaS" moniker. The only reason we are making comparisons is because they are the only companies in the SaaS sub-sector listed on the NZX.

I think it is far more useful to value DIL as a stand-alone investment and not make comparisons with peers. Otherwise we may be convinced that the 20 times sales metric is conservative when actually many of the companies in this valuation universe will never be profitable. We'll make the same mistakes the dot-com zealots made years ago with silly attempts at valuations on click-throughs or eye-balls.

DIL has effectively capped it's value by growing consistently at $6-$7m in new business per quarter. While we might still disagree on the proper/exact assumptions, this makes valuation a simple set of mathemtical assumptions. It's pretty easy to assume a number like $26m in New business and a 97% retention rate on run rate revenues.

This still makes Diligent very attractive - even static new business dollar growth still amounts to rapid growth because the base is still low. Margins will continue to expand. Capex is modest. They appear to be the number 1 player in their category. Free cashflow is strong and growing fast. Assuming longevity in the business model, a number 1 ranked subscription business with low capex and strong free cash flows is exactly the sort of business professional investors want to own.

On reasonable valuation metrics DIL is under valued. But is isn't trading at 10% or 20% of reasonable valuation any more. More like 80% to 90%. The only thing that will confound the market is if DIL changes it's rate of growth - both faster and slower new business growth (and the assumption of steady state 97% retention) will prove the share price is very sensitive to growth assumptions.

Perhaps I'm entering the zealot category now but I think growth rates have upside - revenues outside USA are growing very rapidly off a low base and I think we have to assume they are also more profitable than revenues in the USA

[lastmoa]

Eslinda Hamzah, Managing Director of Asia Pacific buying up large last week. VERY good sign for growth in that region if you ask me...

I like. I like.

[Balance]

Eslinda Hamzah, Managing Director of Asia Pacific buying up large last week. VERY good sign for growth in that region if you ask me...


Read carefully - she exercised 250,000 options at 57 cents and sold.

[Microsloth]

https://www.nzx.com/files/attachments/172919.pdf

my reading of her disclosure shows no recent 2013 transactions "last week "

interesting that date of signature 31 March 2013 (hows that work ? )

am I missing some thing here ?

[CJ]

Read carefully - she exercised 250,000 options at 57 cents and sold.My reading is she exercised 250k but only sold 100k (ie. retained 150k)

Selling a portion of shares acquired through options is normal, especially if it crystalises a tax liability

[Balance]

My reading is she exercised 250k but only sold 100k (ie. retained 150k)

Selling a portion of shares acquired through options is normal, especially if it crystalises a tax liability

She works in Singapore - no tax liability.

I have no problem with her selling - good on her receiving excellent payback for being a contributor to Diligent's success.

I do have a real problem with the disclosure regime of the NZX (and Diligent) however - when were the shares actually sold and why did it take so long for the sales to be disclosed?

[Balance]

Nice little payday for her. Retaining some is always good, not as good as I first thought though. Sorry I didn't read it all the way through!

Looks like she sold at under $4.00 back in Nov 2012 so that tells you she knows little about how DIL shares are going to perform!

[Xerof]

I don't think it matters much whether or not they comply by lodging change in holdings notices, timely or otherwise....of the 5 posters who commented on exactly what Ms Hahmaz acquired and sold, I don't think anyone actually got it right (i'm still trying to work it out myself for sure, but I think she converted 250, and sold 50) maybe I'm number 6!!, but you will get my point.....

said it before...their compliance governance has been very lax, but clearly they are trying to catch up with all the unreported changes currently

said it before....can live with that and move on


and Sparky, on your point, you would think Weldon, of all directors, would know not to pose that question to NZX!

[Balance]

The more I think about a publicly listed company with a former NZX CEO as director applying for discretion to not have an NZX approved auditor, the more I realise that goose is not worth his salt.

Either that, or there are a lot of people at the NZX relishing the opportunity to embarrass him.

Wanderkid Weldon is probably still in the time warp of thinking that NZX regulations and compliance do not apply to him.

Also, he is probably still trying to figure out why DIL cannot screw DIL's customers as he did when he was at NZX. DIL's other directors need to tell him (gently 'cos he is such a sensitive soul) that DIL is not in a monopoly business (like the NZX) and customers can and do walk if they are screwed too hard.

Sooner they wake up to his credentials as a good time director and manager the better for all DIL shareholders.

Bloody disgrace.

Oh, he probably is making a few phone calls to his mates in the National Party to see if anything can be done to change the rules?

[pierre]

I looked up the Thesaurus online to find out the meaning of Diligent. This was the result:

hard-working
industrious
assiduous
meticulous
conscientious
thorough
attentive
careful
painstaking
lazy (Antonym)

.....just thought you might like to know.

[winner69]

Living up to their name then

[JohnnyTheHorse]

http://www.radionz.co.nz/news/business/131384/diligent-shareholder-urges-board-shake-up

Milford saying they want bit of a board shake up. Fair call from Brian Gaynor. I'm pretty disappointed in DIL with these recent issues. Ah well, they are fairly minor and changes should be implemented to stop anything like this ever happening again. Good thing that the business is very solid and practically has a license to print money! ;)

[Balance]

http://www.radionz.co.nz/news/business/131384/diligent-shareholder-urges-board-shake-up

Milford saying they want bit of a board shake up. Fair call from Brian Gaynor. I'm pretty disappointed in DIL with these recent issues. Ah well, they are fairly minor and changes should be implemented to stop anything like this ever happening again. Good thing that the business is very solid and practically has a license to print money! ;)

Interesting as Brian Gaynor is a HUGE fan of that small minded economic misfit, Weldon, who of course is now a director of DIL!

[CJ]

Interesting as Brian Gaynor is a HUGE fan of that small minded economic misfit, Weldon, who of course is now a director of DIL!Fat load of good he was.

[robbo24]

Good to see the full year report https://www.nzx.com/companies/DIL/announcements/234623

Nothing toooooo striking that people didn't know already though I don't think

[robbo24]

Although, is it a concern that at the bottom of the annual report the auditors are still listed as HRR? (http://www.stuff.co.nz/business/industries/8474746/Diligent-faces-NZX-rules-breach):

The company has used United States firm Holtz Rubenstein Reminick (HRR) to audit its accounts since 2008, but Diligent said HRR wasn't and couldn't be registered in New Zealand under the Auditor Regulations Act (ARA), as was now required by the FRA following a rule change.

[JohnnyTheHorse]

Been looking at the technicals and they are beginning to look VERY similar to the situation last Nov/Dec where the price went up ~$1, retreated a bit and then went for another ~$1 run. I'm not saying a run to $7 will happen in the next week or two (although it may if history repeats!), just wanted to bring this to the attention of you traders and people looking for an entry. Keep an eye on her.

[Blendy]

mmmm I'm tempted. I'm heavily over balanced with DIL already, but it could pay off....

[tosspot]

according to Google finance their Preliminary earnings are 6th of April. Not sure how accurate that is because its this Saturday. but if around then should see the share price shoot up again if results seem as expected.

[Banksie]

... should see the share price shoot up again if results seem as expected.

I am new to investing and trying to understand what influences price. I would have thought that they would only shoot up if the results are better than expected and if they are only 'as expected' then this would already be factored into the price.

Although - in a bull market any news that isn't negative seems to push the price up.

[Banksie]

Thanks for the comprehensive reply Sparky. I appreciate the time you took and it has given me some useful tools to kick-start my fundamental analysis. I did purchase DIL a few days ago as I wanted exposure to a SaaS product and couldn't get my mind around the eye-watering price of the XRO shares. While I believe the Xero product is more exciting and has a greater potential it could be years before they justify the current price.

I can hear the wise old forumites thinking - he should have done his FA before buying - so to put your mind at rest, I am investing very little money in my current picks. The idea is to get into the game and then increase my portfolio over time investing in my good choices and discarding the bad.

[JohnnyTheHorse]

according to Google finance their Preliminary earnings are 6th of April. Not sure how accurate that is because its this Saturday. but if around then should see the share price shoot up again if results seem as expected.

I would expect the first quarter 2013 results to be out on the 16th. DIL stopped rising on these reports around the middle of last year, as the results are more or less expected (very good, but expected). I would only expect a rise if there is a good surprise, but I wouldn't hold my breath.

I'm quietly confident that we will be hitting $7 within the next two weeks though (due to what I said in my previous post). Charts and horses can be wrong though, so DYOR.

[robbo24]

You will recall how fears over Greece in 2011 pushed all NZ share prices down, meaning idiots were selling out of retirement village operators in NZ on news that had nothing to do with retired people in NZ.

Thanks for this very informative post, and LOL-style banter.

[lastmoa]

Thanks for the comprehensive reply Sparky. I appreciate the time you took and it has given me some useful tools to kick-start my fundamental analysis. I did purchase DIL a few days ago as I wanted exposure to a SaaS product and couldn't get my mind around the eye-watering price of the XRO shares. While I believe the Xero product is more exciting and has a greater potential it could be years before they justify the current price.

I can hear the wise old forumites thinking - he should have done his FA before buying - so to put your mind at rest, I am investing very little money in my current picks. The idea is to get into the game and then increase my portfolio over time investing in my good choices and discarding the bad.

Good choice, Banksie, imho. Yes, think it is good to get into a SAAS-model stock yesterday. 8-)
Whilst people have been recently bandying the words 'eye-watering' 'way overpriced' etc to the Xero stock, I just see it as the price have got ahead of the Xero current business status. It can be expected as more people find out, (and get excited) by the potential of what Xero could indeed pull off. I think Drury has been conservative on his goals so, whilst I think the SP will correct a dollar or so because naive people expect a profit next year or something, in the long term it will trajectory upwards.
Diligent meanwhile is cash positive, and the increased R&D spending justifies to me that something is in the pipeline. Think the SP has no reason for any pullback (unlike Xero), so do expect some 'controlled' upward trajectory from this current holding position ($6.20-$6.35).
Sure, apply your TA and/or FA, but the current figures given by Xero/Dil do not explain the full story of what stage in computing we are in and the potential ahead. That is why NZ brokers have trouble covering these stocks.
I hold both XRO and DIL and add on dips.

[lastmoa]

Yes, the entry of major US player seems to offset the no-Nasdaq-listing-yet saga. US hedge funds will get the benefit of a falling Kiwi dollar as well if they invest now (at a much later date of course). Would love to see DIL go on a run like XRO because of foreign funny money, about time we saw some of it!

yes, when you do a superimpose of the Xero chart on Dil you see from around March onwards the divergence that has occurred.

[lastmoa]

They are such different investments I wouldnt bother to compare charts.

I hear what you are saying but the do have some similarities (namely SAAS) and the charts are reflecting that. imho.
Regardless, I am pleased to read on the tidy-up of the auditor mess and look fwd to the upcoming sales update, like Sparky said is due. Think this stock has been in its typical hold and now due for another run up. Believe $7 is about right.

[lastmoa]

Yup me too.

In terms of a comparison, the nature of the different directions the two companies are repsectively taking suggests to me DIL is on a steady long term track upwards while Xero wil be a crazy bumpy ride all over the place and could really end up anywhere. Time will tell and hopefuly both companies succede, but the risk associated with Xero now is far greater than DIL and as a result I would expect that to be reflected in their repsective SP trajectories.

Far comment, Tumeric. I do like to see, in my TA, the SP having breathers that create nice new resistance levels. Can see that clearly in DIL and there is a nice upward pattern forming. XRO is not quite as clear in this area, so unsure whether there will be a correction before business catches up with SP there. Like you, I want both to succeed well, and believe they will.

[winner69]

Turmeric - you and others use the word risk a lot

Do you have a measure of risk or is just a gut feel subjective thing?

Just interested

[Silverlight]

US hedge funds will get the benefit of a falling Kiwi dollar as well if they invest now (at a much later date of course).

Moosie if a US fund manager buys DIL today at $6 at 0.85 cent cross rate, it costs them USD$5.10 per share. If the NZD falls to say 0.70 cents against the USD, then their DIL share is now worth only USD$4.20. From the US perspective, buying NZD assets at the moment is the worst possible time to buy, if you think the NZD is going to fall.

This ignores all other factors, I am just making the point the high NZD is very big headwind for foreign investors at the moment, not a benefit at all.

[Monty]

I understand that should the dollar fall the share value for a US investor would be adversely affected, however in the case of Diligent their income is also based in USA $ (as that is where the majority of the sales currently are (although Europe and Asia are large growing markets for Diligent). so.... If the NZ$ falls would that not also mean an increase in sales revenue in US$ terms therefore impacting upon the price in a positive way because the income would increase in NZ$ by default. Anyone who understands this stuff better than me care to comment or advise those less sophisticated investors??

[winner69]

Some use volatility as a measure of risk

The historical volatilty ( over 3 month periods) of the nzx has been between 9% and 11% over the past year

DIL has averaged about 25% and currently is no more volatile than a year .....even though volatility is increasing from a low in October lost year

XRO has averaged about 35% but funny enough I'd less volatile at the moment than it was a year ago. But important to note that on a 3 month basis volatilty has increased from 21% at beginning march to current 34%

Interesting eh ....but prob means diddley squat at the end of the day ....I just say go with your gut feel and if not losing any sleep over it no worries

As Taleb would say there is still some chance ( maybe quite high) of another global financial catastrophe in the next year but because no one thinks it will happen prob not factored into many people's decisions

[Banksie]

Interesting point Monty - another factor to consider is what currency they cover their costs with. For a SaaS company I would imagine the 4 big costs are R&D, Hosting Infrastructure, Support, and Marketing. For someone selling into the US Marketing, Hosting and the bulk of Support would be US based while R&D could be NZ based. So the relationship between these costs would determine whether an exchange rate fluctuation would negatively or positively affect the bottom line.

[Whipmoney]

Some use volatility as a measure of risk

The historical volatilty ( over 3 month periods) of the nzx has been between 9% and 11% over the past year

DIL has averaged about 25% and currently is no more volatile than a year .....even though volatility is increasing from a low in October lost year

XRO has averaged about 35% but funny enough I'd less volatile at the moment than it was a year ago. But important to note that on a 3 month basis volatilty has increased from 21% at beginning march to current 34%

Interesting eh ....but prob means diddley squat at the end of the day ....I just say go with your gut feel and if not losing any sleep over it no worries

As Taleb would say there is still some chance ( maybe quite high) of another global financial catastrophe in the next year but because no one thinks it will happen prob not factored into many people's decisions


Volatility is only one measure (or form) of risk, i.e. price risk. Aside from that there is the fundamental business risk (e.g. their product, market and model) and Market risk (NZX, Global/Local economic environment, Currency etc). The first category is probably the more important of the two as if the stock price went down due to market influences I would probably look to acquire more (assuming the fundamentals were still in place).

Whilst you're right that another major financial catastrophe could occur, I imagine this wouldn't really affect their subscriptions/retentions as businesses still need to operate at the end of the day. That being said there could be an effect on their revenues (price sensitivity or FX movements). I guess the biggest risk with this stock is that a better product is released by another party.

[JohnnyTheHorse]

Looking at the selling depth she certainly looks primed for another run. Doesn't appear to be enough buyers around yet though.

[h2so4]

The risk might be that DIL disappears off the face of the planet.

[JohnnyTheHorse]

Sellers have been scared off again! Sellers at 650, 661, 720 and 750. None of them are large. If we get any volume of buyers today this could get exciting.

[Balance]

Buyers have been scared off again! Sellers at 650, 661, 720 and 750. None of them are large. If we get any volume of buyers today this could get exciting.

You mean sellers scared off, right?

This run will take the stock to $7.00 as the sellers have been moped up?

[JohnnyTheHorse]

Ah yes, have edited my post. At least $7 would be nice :p

[Balance]

Don't think it has nearly enough steam behind it for a run. Sellers are noticeably absent but they can easily appear again to cap the price. This always happens in the run-up to an announcement. Still expecting SP to trade below the $6.50 range, too many nervous nellies out there at the moment.

The world is going to be swamped soon with US$1.4 trillion from Japan. Watch that money wash all over the world.

The nervous nellies will be too afraid of missing out - just as we are now seeing in the property markets!

[robbo24]

I find the DIL chart/graph to be interesting.

There are large, sudden increases with very little retraction of the share price - then it maintains at a similar level until the next large, sudden increase.

I'm optimistic that Moosie is right.

[kizame]

Interesting to note that the bollinger bands have tightened so much,and the stock is starting to break out (on the upside) .
Looking forward to seeing where this is heading now.

[JohnnyTheHorse]

Up to 648 today. By the looks of things it's just a trading bot constantly buying small parcels at that. I suspect moosie is right that there still isn't quite enough buyer interest to sustain a solid rise just yet.

[Baddarcy]

Funny trading going on this afternoon, every 2 - 5 mins a buy goes in for between 100 - 200 shares.

Not complaining as they are buys not sells, but looks a bit odd.

11/04 13:04 6.480 183 0.000 0.000
11/04 13:01 6.480 162 0.000 0.000
11/04 12:59 6.480 124 0.000 0.000
11/04 12:57 6.480 122 0.000 0.000
11/04 12:56 6.480 139 0.000 0.000
11/04 12:55 6.480 162 0.000 0.000
11/04 12:52 6.480 133 0.000 0.000
11/04 12:50 6.480 156 0.000 0.000
11/04 12:47 6.480 201 0.000 0.000
11/04 12:39 6.480 166 0.000 0.000

[TimmyTP]

Funny trading going on this afternoon, every 2 - 5 mins a buy goes in for between 100 - 200 shares.

Not complaining as they are buys not sells, but looks a bit odd.

11/04 13:04 6.480 183 0.000 0.000
11/04 13:01 6.480 162 0.000 0.000
11/04 12:59 6.480 124 0.000 0.000
11/04 12:57 6.480 122 0.000 0.000
11/04 12:56 6.480 139 0.000 0.000
11/04 12:55 6.480 162 0.000 0.000
11/04 12:52 6.480 133 0.000 0.000
11/04 12:50 6.480 156 0.000 0.000
11/04 12:47 6.480 201 0.000 0.000
11/04 12:39 6.480 166 0.000 0.000

Hello, relatively new member here. I would guess this is a VWAP or TWAP algo, which will be trying to beat VWAP or TWAP, but will also have a target to complete a minimum quantity by the end of the trading day. That's why you've seen lots of small trades at the same price, even if the price is not moving.

[TimmyTP]

Ah could be something simpler then like an iceberg

[Whipmoney]

Funny trading going on this afternoon, every 2 - 5 mins a buy goes in for between 100 - 200 shares.

Not complaining as they are buys not sells, but looks a bit odd.

11/04 13:04 6.480 183 0.000 0.000
11/04 13:01 6.480 162 0.000 0.000
11/04 12:59 6.480 124 0.000 0.000
11/04 12:57 6.480 122 0.000 0.000
11/04 12:56 6.480 139 0.000 0.000
11/04 12:55 6.480 162 0.000 0.000
11/04 12:52 6.480 133 0.000 0.000
11/04 12:50 6.480 156 0.000 0.000
11/04 12:47 6.480 201 0.000 0.000
11/04 12:39 6.480 166 0.000 0.000

forgive my ignorance but how do they get around incurring lots of trading costs on the small trades?

[Baddarcy]

Also interested. Anyone?

Yeah me too, it could be they all get packaged up a bit like when you put in a buy or sell at a price and it takes a few days to fully trade, you only get charged for the total, not for each one. Though this is different.

Still happening by the looks of it too

11/04 14:48 6.440 155 0.000 0.000
11/04 14:45 6.440 83 0.000 0.000
11/04 14:45 6.440 25 0.000 0.000
11/04 14:43 6.440 126 0.000 0.000
11/04 14:42 6.440 135 0.000 0.000
11/04 14:39 6.440 100 0.000 0.000
11/04 14:37 6.440 125 0.000 0.000
11/04 14:36 6.440 115 0.000 0.000

[Baddarcy]

Must be frustrating being the guy with the 2000+ sell order in seeing 50 odd shares selling every 5 min or so!

Even more so when some other bugger drops in 1c cheaper than you !! :-)

[Jay]

Bot trades of some sort??

[TimmyTP]

Yeah me too, it could be they all get packaged up a bit like when you put in a buy or sell at a price and it takes a few days to fully trade, you only get charged for the total, not for each one. Though this is different.
The NZX publishes exorbitant looking trading fees, but my guess is they are talking about order fees, partly because my ASB trading account lets me "view my trades" when I'm really viewing my orders.


In a 'normal' exchange, total fees per trade would more likely be less than 1bp of consideration with no minimum fee, so breaking up an order into many trades wouldn't be more costly than a big fat trade in that respect.

If anyone is interested in examples, ASX's fees are published here (http://www.asxonline.com/intradoc-cgi/groups/participant_services/documents/information/asx_027373.pdf) and HKEX's here (http://www.hkex.com.hk/eng/market/sec_tradinfo/trancost.htm).

Of course you need to be a trading participant to access these kinds of trading costs - or negotiate yourself a DMA deal with a broker. But I think the point is that you might see more trading like this if algos and simulated order types became more popular among NZX members - and for some it would pay to be on the lookout for this sort of behaviour.

[lastmoa]

Think this 2013 report is worth reading if you haven't already. With good growth in USA we all would like to see that replicated in other regions. This article gives some insight into the efforts being made in Europe : http://www.boardbooks.com/wp-content/uploads/2013/03/Diligent-European-Roundtable-White-Paper.pdf

Incidentally, I do like this quote : “The biggest selling point is that most of the people around the table, with the exception of your executives, will be directors of a number of different companies. So if you can say to them, ‘Look I know you’re carrying around a suitcase full of board papers because I’ve seen you complaining at the desk in whichever airport it happens to be because it’s been mislaid. What if you had everything you needed on one device?’ You see the behaviour change with the awareness of the benefits.”

[Baddarcy]

Our little friend looks to be taking a rest today, must have gobbled up enough 100-200 stock bites yesterday.

[TimmyTP]

Maybe they are doing the opposite; trying to keep the price stable until they have filled their (say) 100K order?

[h2so4]

Or that the meteor hits the planet.

Only hand basket risk then?

[lastmoa]

Diligent have announced to the market a "term sheet" resolution to the options issue facing its CEO. The actual resolution needs to be voted on at the AGM.

https://www.nzx.com/companies/DIL/announcements/235171

An expensive mistake, but I am pleased the company is now free from the uncertainty over the options issue.

Yes, pleased to hear the finalisation for this and the auditor problem. Good to see they have addressed these overhangs in a prompt manner and are now keen to move forward positively and Diligently. 8-)

[Balance]

First NZ Capital have just issued some commentary on the options solution proposed to shareholders. They seem to approve it.



and the last lines of the report



First NZ remain one of the few brokers in NZ with coverage of Diligent, despite it now being a $750m company (with all options exercised). They should be congratulated for keeping a close watch on this NZ success story.

Indeed!

FNZC placed 3m shares at 42 cents a few years ago (courtesy of Brian Henry) with some clients and are they happy!

Meanwhile, some of the other brokers are still wondering what DIL actually does!

[tosspot]

so are they actually posting their quarterly results tomorrow or is it speculation at this point.

[JohnnyTheHorse]

so are they actually posting their quarterly results tomorrow or is it speculation at this point.

Speculation. I'd be willing to bet my left nut that it will be tomorrow though :).

[Everwood]

Quarterly results has been released https://www.nzx.com/files/attachments/173856.pdf It's good to see they have hired an additional seven people in Research and Development.

[Monty]

The quarterly update is pretty much as expected. Sales continue to hold at around $6m per quarter. This is the similar level of sales for the past six quarters. Importantly the retention rate of 97% is holding. and revenue is now a staggering $15m per quarter and seems to be climbing by about $2m per quarter. The have $US36m in the bank. What will this money be used for. I also wonder if there is any mechanism for a surge in sales through Asia Pacific and Europe. I will watch with interest any changes to the share price today. I guess there will be a bit of upward pressure.

[CJ]

Revenue still upwards on the exponential growth curve.
Given that new sales are static at around the 6.5m mark, I beleive their revenues are no longer exponential, just linear.

Still no comment on use of the cash balance (other than a few R&D people) or a possible US listing. Will be interesting to see how the market reacts today.

[Whipmoney]

My IV calculator says DIL has a price of $7.30 based on known earnings. Extrapolating future earnings into the model gives me a number of $12.55. Wow.

From memory I had $7.02 based on some very conservative growth forecasts. I lost my model but today's results have well and truly exceeded my forecasts.

[Balance]

Yes, a concern, but nowhere near as bad as 9/11. Might see a ripple effect over the next few days but I don't think it will be more than that.

This is going to sound terrible but 9/11 presented one of the greatest buying opportunities in the market's history.

Emotional and fear impact of such events are massive but economic impact rather limited to the short term.

And markets are driven short term by fear, hope and greed.

Fear by far has the greatest impact day to day.

[CJ]

The big question right now is whether this act was carried out by an international terrorist organisation or by a domestic group.I have heard the that bombing was race related.

Disc: I am very sorry for anyone who I have offended.

[CMo]

I'd take scoops from the NY Post with a pince of salt... In the same story they're reporting 12 dead, whereas most other agencies have the reported figure at 2.

[lastmoa]

Looks like we might be seeing the drop before the run-up starting. Have a price target ~$6.
Agree on a pullnback before another run to $7, but my analysis says $6 is too ambitious. I thinking more $6.15-20(ish).

[lastmoa]

Quarterly results has been released https://www.nzx.com/files/attachments/173856.pdf It's good to see they have hired an additional seven people in Research and Development.

I also was pleased to see that they intend to increase investment in R&D. Better that than pay a dividend. Quite significant with adding 7 people just in this area alone, so tells me that there is something in the pipeline. Add that to their continuing good retention rate and we may see a nice complimentary income stream released soon.
No big surprises in the report but a nice continued upward trajectory. (and a tidy-up of past errs). Phew.

[Whipmoney]

I also was pleased to see that they intend to increase investment in R&D. Better that than pay a dividend. Quite significant with adding 7 people just in this area alone, so tells me that there is something in the pipeline. Add that to their continuing good retention rate and we may see a nice complimentary income stream released soon.

Complimentary..? If they build a SaaS solution for companies executive teams then surely this would representative the lion's share of their revenue streams as boards of directors are only existant on the minority of companies.

[Baddarcy]

Complimentary..? If they build a SaaS solution for companies executive teams then surely this would representative the lion's share of their revenue streams as boards of directors are only existant on the minority of companies.

One thing i did notice in the announcement a month or so back when DIL told off FNZ about their analyst report. They made a comment that i read as they were working changes that would expand the use of Boardbooks to employees of their existing customers.

I read this as them saying they were working on alterations to the software in an attempt to try to expand the use of Boardbooks down from just the Boards to the executive and project team levels of their existing clients.

I also read it as them saying they were not working on a new product.

In my mind this is a very good strategy if the can pull it off.

Thoughts?

[Baddarcy]

Botty is back, downsized a bit thou

7/04 13:26 6.340 96
17/04 13:23 6.340 77
17/04 13:21 6.340 78
17/04 13:19 6.340 83
17/04 13:17 6.340 83
17/04 13:14 6.340 79
17/04 13:12 6.340 83
17/04 13:10 6.340 74

[lastmoa]

A v.recent Indian 'Rollout for Boardbooks' article, for those who are interested : http://www.efytimes.com/e1/fullnews.asp?edid=104153

Looks like they reviewed a few board portals before settling on Diligent's offering.

"It is an innovative, paperless and environmentally friendly product, and it’s going to save us time, money and effort. All companies should use this wonderful tool for board meetings.”

[ddrone]

Some big volumes today but little change to the share price.

[Whipmoney]

"Sellers keep sellin', buyers keep buyin'". See my previous comments about a dip before a run up. ;)

How long you think until it'll pop? Based on the lastest results (11.52% QoQ revenue growth) this thing is way undervalued.

[winner69]

Sparky, what's the delay on articles going on line usually? Would like to have a read. Cheers.

Don't be such a skinflint - go out and buy a copy

Bastards - they wrap it in plastic these days

Sometimes print stuff never online ....most print articles read father a week but need to be a subscriber

[CJ]

Sparky, what's the delay on articles going on line usually? Would like to have a read. Cheers.Sometimes quite a while. To ensure people maintain their paper subscription, they keep some stories separate.

[Whipmoney]

Useful points from article

- might move to another stock exchange amid compliance issues
- big cash pile noted of $42.5m
- still has complex compliance issues
- DIL reports in accordance with IFRS and GAAP as a US company on the NZX
- Deloitte to be ratified in June, but won't solve issue
- FMA rule changes means that DIL needs to get two separate audits done, which could bring up two different figures, confusing investors
- NBR asked if this would expedite a Nasdaq listing. CEO Alex Sodi wouldn't comment, passed on to Chairman David Liptak
- "We make no secret that last year we were looking at alternative listings"
- "think about simplifying complexity of compliance standards"
- "haven't made any decisions but we continue to look at it and what is best for shareholders"
- Added 7 programmers to R&D
- Sodi is happy to resolve options issue, excited about the future and opportunities increasing

Excuse my ignorance but what's the benefit (to existing shareholders) of listing on the nasdaq (aside from being a deeper market with more astute coverage)?

Given the issues with two audits etc I take it they won't be cross-listed if they were to opt for listing on the NASDAQ.

[Halebop]

...what's the benefit (to existing shareholders) of listing on the nasdaq (aside from being a deeper market with more astute coverage)?

I think the board (or management?) are suggesting they are materially an American company with an American base (Head Office, material count of customers, some key shareholders, registered domicile) in a market where technology companies are well understood and often highly valued. Additionally, the double reporting regime is adding cost and complexity.

The flipside is that several NZ based institutional investors may have a mandate that precludes or restricts by size investments into the USA or Nasdaq. This could result in downwards pressure on the share-price or even a public disagreement. Double reporting isn't really that hard to deal with - you just need processes that understand the needs (governance process hasn't proved to be a strong point so far). Also, a small company (by American standards) in a big market like the Nasdaq can be lost amongst the many alternatives. In NZ Diligent is in the Top 50 and must have attracted index tracking funds (who may also need to sell if the listing moves to Nasdaq).

I'm not yet convinced a Nasdaq only listing will fly; I'm not yet convinced it will result in a higher valuation (it could), I'm not yet convinced it is too hard to report into two exchanges, I'm not yet convinced key local shareholders want this. I am convinced the expense of screwing up the option issues was higher than the costs of two reporting regimes and maybe management are looking to change the subject? It may also be that the two key holders of convertible shares would prefer a Nasdaq listing (I think there are tax advantages to a Nasdaq listing over an NZX listing if they sold).

[JohnnyTheHorse]

Looks like another day of reasonable volume with DIL. A lot of the trading lately (both buying and selling) has been with reasonable sized parcels (~10k shares) and quite a few large off markets. The sell side is starting to looking quite thin, although ~10k parcels keep getting put out, then someone snaps them up pretty quick! Hopefully this goes somewhere.

[tosspot]

Everyone have their ticket for the Chatanooga-Cho-Cho? Think she's steaming up and getting ready to leave the station soon... ;)
Jeez you sure are optimistic on well just about everything. I wouldn't be betting on a run until it breaks 6.50 at least. its been to 6.45 a few times

[tosspot]

Why would you be in the market if you were a pessimist? (other than to short sell obviously!)
dont take it so seriously. It was light hearted. I just see you in every thread building up hype for a large increase in price. But yes hopefully you are right

[tosspot]

now were getting somewhere

[JohnnyTheHorse]

Looks like Mr Trading Bot is back too, he just pushed it to 665 (although there is now a seller at 658).

[lastmoa]

Yeah, feels pretty good seeing DIL close over the $6.50 mark, in fact closer to $6.60. Let's hope the rest of the week is as kind to Diligent as Monday is!

Of course, all tech stocks may be slapped around the world if Apple has a bad result on our Wednesday morning (their Tuesday after market close).

The expectations on Apple are high and I do think they will release numbers that will put pressure on their SP even at their sub$400 price. Don't think this will affect ALL tech stocks like you say, Sparky. Analysts know that Google, Samsung, etc numbers are in line. Will effect Sandisk, etc, who have a direct relationship with Apple, though. imho.

[Balance]

Yeah, feels pretty good seeing DIL close over the $6.50 mark, in fact closer to $6.60. Let's hope the rest of the week is as kind to Diligent as Monday is!

Of course, all tech stocks may be slapped around the world if Apple has a bad result on our Wednesday morning (their Tuesday after market close).

A bad result from Apple already priced in?

Stock is trading ex-growth and on a PER of less than 10!

[Balance]

Would it be fair to say the bot is working both in a positive and negative way for the SP?

I havent really followed intraday trading that carefully but it seems when the bot comes on line the SP initially jumps but then it seems to entice sellers who realise they effectively have a guaranteed sale at or below the current ask and hence the prices gets driven down a bit.

Is that a fair observation?

Too many punters looking at the day to week movements rather than year to year.

Too worked up over 25 cents movements and missing out on $2.50 movements?

[Whipmoney]

Would it be fair to say the bot is working both in a positive and negative way for the SP?

I havent really followed intraday trading that carefully but it seems when the bot comes on line the SP initially jumps but then it seems to entice sellers who realise they effectively have a guaranteed sale at or below the current ask and hence the prices gets driven down a bit.


That doesn't necessarily equate to a bad thing if anybody is going long as it draws out the weak sellers and once those are wiped out either the bot-buyer itself or others in the market will jump on the train and bid up the SP.

I noticed yesterday there were quite a few small retail investors putting small bid parcels close to the ask and the bot-buyer was coming over the top and buying up small parcels at market.

I think we're going to see a lot of action today boys (and girls)!

[PlatnuM195]

Depth seems to be back for viewing.

[tosspot]

If the bots in play get ready for a large increase

[Blendy]

WOW!! $7! Nice work.

[Anonymous]

Really? LOL - great news. My feeds are all on a 20 min delay at Yahoo and ASB, so I'll have to live vicariously through your live updates!

Hey Sparky, ASB seems to give you a 20min delay on your portfolio view and watchlist view but if you click into the share then prices are live as is depth etc. It gives you a timestamp and you can click the refresh arrow thing beside it to refresh. (Although for DIL you might not want to as it no longer has a 7 in front of it.)

[CJ]

I love it when my reaction to seeing the shareprice is - "Oh F!" and it is in a good way.


Hey Sparky, ASB seems to give you a 20min delay on your portfolio view and watchlist view It loads as 20min delay but if you push the refresh icon (circular arrow), then it goes real time.

From memory they are charged per live price so they only give it to you if you specially request via the refresh button.

[lastmoa]

TWO Large 320,000(approx) trade just went thru at $7. Interesting.

[JohnnyTheHorse]

Been interesting watching this track upwards much slower than usual. Looks like caution is starting to enter DIL as investors realise the growth cannot remain exponential forever...

Whilst we are approaching a fair value, there is still plenty of upside growth for the business and the SP (as I'm sure you're aware). With the amount of R&D going on, there is going to be a new money maker probably by the end of the year (maybe an addon or adaption of Boardbooks). We also still await news regarding what they're going to do with their pile of cash and whether or not they will list on the Nasdaq.

[Monty]

Been interesting watching this track upwards much slower than usual. Looks like caution is starting to enter DIL as investors realise the growth cannot remain exponential forever...

However with 97% retention and new sales of around $6m per quarter (constant over the past 6-7 quarters), opening up into new markets, 100% in bound sales calls, Growth is still substantial.

Could someone please explain why there are new sales of approximately $6m per quarter, (for the past 6-7 quarters) which is great, but revenue only increases by about $2m per quarter. Is the difference because the reports deduct operating costs, therefore the reported increases in revenue are net? On this basis the revenue increases over the next 2 years increasing at $2m per quarter will be about $16m. ($2m x 8 quarters) Which is double the current revenue stream of about $15m per quarter. (ie in two years can we expect revenue of about $30m per quarter and growing if current trends continue?)

In addition if they continue new sales of around $6m per quarter as it has been for past 6-7 quarters, with a 97% retention rate then new sales of about $50m over the next two years and the entry into the European and Asian Markets makes Diligent look extremely attractive long term. Is this a correct analysis?

[Halebop]

Could someone please explain why there are new sales of approximately $6m per quarter, (for the past 6-7 quarters) which is great, but revenue only increases by about $2m per quarter.

This is the difference between Run Rate Revnues (we have +6m per quarter) and Revenue recognition (only a portion of the $6m in ANNUAL license fees is recognised each QUARTER). Keeping in mind reported quarterly revenues can't be directly extrapolated from Run Rate Revenues (because each quarter there will be a different mix of renewals, up-sells, cancellations and new business), annualising the quarterly increase in sales looks aproximately sensible against a $6m quarterly new business rate and a 97% retention rate.

[Whipmoney]

This is the difference between Run Rate Revnues (we have +6m per quarter) and Revenue recognition (only a portion of the $6m in ANNUAL license fees is recognised each QUARTER). Keeping in mind reported quarterly revenues can't be directly extrapolated from Run Rate Revenues (because each quarter there will be a different mix of renewals, up-sells, cancellations and new business), annualising the quarterly increase in sales looks aproximately sensible against a $6m quarterly new business rate and a 97% retention rate.

The revenue recognition is less important than the actual cash-flow which runs through the business which is more important. You can see the cash piling up on their balance sheet (offset by deferred revenue liability, i.e. an accrual transaction).

[Monty]

Pure SaasS companies are commonly subject to takeovers at over 20x revenue...!

So.... assuming any potential takeover is say delayed 12 months and diligent continues to grow at the same rate (ie additional $6m new sales per quarter and revenue increasing at $2m per quarter, then in 12 months Diligent will be worth even more.

Recommendation would be to hold???

[lastmoa]

I am personally holding and hoping for a takeover. I like the company and think the SP has upside still but I would like to cash in (hopefuly with the next 12 months) and de risk some of my portfolio.

I'm overweight on DIL, but can't really justify selling a portion as can't see another stock that has the same upside potential. Would like to top up more on XRO but need steel balls now. 8-)
Agree totally with Brighton_early. Thanks for the calc's.

[JohnnyTheHorse]

My shares will have to be compulsorily acquired (takeover) to get them off me ;).

A lot of sellers have just been pulling out, only sellers at 750 and 800 now.

[tosspot]

Im am loving this stock. almost back to break even on my stock from the massive lose with PEB

[PlatnuM195]

Sellers are disappearing fast today, looks like $8 is pretty close.

[Mobius]

Buyers are disappearing fast today, looks like $8 is a long way off. :P

[Mobius]

Book your next trip on the Diligent Express for a departure in 2.5 months from now.

[Balance]

Book your next trip on the Diligent Express for a departure in 2.5 months from now.

Huge American buyers out there looking for stock apparently.

That's why they have paid up to get volume at $7.00 and are still there looking for more stock.

They can have mine when it reaches $11.50.

[kizame]

Huge American buyers out there looking for stock apparently.

That's why they have paid up to get volume at $7.00 and are still there looking for more stock.

They can have mine when it reaches $11.50.

Balance are you pumping (not that this stock needs to be,nor am I doubting your credibility but...) or do you have reliable info.

[Balance]

Balance are you pumping (not that this stock needs to be,nor am I doubting your credibility but...) or do you have reliable info.

The share price action speaks for itself.

I heard from an advisor who told me that their institutional desk had a big order from US.

[kizame]

The share price action speaks for itself.

I heard from an advisor who told me that their institutional desk had a big order from US.

Excellent thankyou, big orders at this stage tells the story really,still plenty of growth potential and solid market position looking ahead.

[Jay]

Down 29c so far today - taking a breather??? Though smallish trades

[robbo24]

If I thought Diligent would drop temporarily below $6, I'd be tempted to start buying again.

I've been watching the SP this morning and would love to buy in again... The Xero-effect always seems to have an effect on Diligent shares but they are two different beasts in my mind. Happy to see the SP come down (buyers drying up big time today) so I can add some more DIL to the old pock.

[tosspot]

why on earth is everyone panic selling diligent just because of xero. its painful to watch

[lastmoa]

why on earth is everyone panic selling diligent just because of xero. its painful to watch

Agree. And I am still even wondering why this Xero panic selling started in the first place. What's changed with the story? Chicken Little?
Good for experienced longer-term investors to hover up.

[JohnnyTheHorse]

Over the last 3 months XRO has doubled in SP, DIL has seen a 40% gain.
Over the last two days XRO has seen a 20% decline, DIL has seen a 7.3% decline
The proportion of 2 day decline to 3 month rise is .20 for Xero and .18 for DIL so roughly even.

Does this make it a good buying opportunity for DIL? or for XRO?

Im thinking about using my $ from recent sale of XRO shares at $15 and splitting them between more shares in DIL and XRO.

EDIT: Going to wait for the dust to settle though.

The difference is that the DIL share price was justified (at fair value), whereas the Xero share price was not justified and overvalued (In my view. I don't think we need to start another 'is Xero in a bubble debate' :). It's impossible to put a fair value on Xero, whereas it is possible with DIL). I think splitting half and half is a much better decision than putting it all in Xero.

[Halebop]

The volumes being traded aren't yet very convincing.

The thing that helped XRO rise so far was the blue sky factor. As a more easily quantifiable investment, DIL didn't have the benefit of unfettered blue sky. On the flip side, those clearer value factors also help support the DIL share price.

As an aside I recommended DIL to a friend a couple of years back when the price was about $1.00. They eventually bought at about $2.25 (thinking they might have missed the boat already). Shortly afterwards, a friend of the friend followed them into DIL at $2.50. This 2nd person has proved a salutary lesson on patience versus panic. Somehow, between the price rising from $2.50 to $7.50, they have traded in and out several times and in aggregate lost money! Takes all sorts to make a market huh?

[lastmoa]

Timing the market is a w***e and hardly ever works! I tried it for quite awhile (and still do) and still manage to lose money once in a while (although still very much in the positive). I have learnt through my 2 short years of trading that patience is a saintly virtue in this game and should be adhered to at all times if one truly believes in their investment!

Yep, Moosie. And the patience with what you hold comes with the faith you have in the people and the company garnered from your own research into the very, people, company and the marketspace they are trying to gain traction in. Let the scrabblers fight and panic over this brief respite.

[lastmoa]

Truly. I just hope SNK is going to ratify my change over from swing trader to long-term holder!

If you are more into the swing-trading I personally think you are probably better with ASX miners then.

[gv1]

I guess its 2nd of MAY when people sell up and come back after 4-6 mths.
Discl. not holding either DIL or Xero.

[Blendy]

right, i freed up some cash today to take advantage of this strange pricing we're seeing. My intention is half in DIL, half (somehow) in XRO. I'll see what happens.

[Banksie]

Do you own any other stocks? Pretty risky!

Very risky for the next few days. All those who wish they were on the last rocket ride will climb in and raise the price. Once it gets close to the the high all those that bought at $15 dollars and are sweating today will pile out.

Without any changes to the fundamentals I have no idea how to time an entry into XRO.

[Blendy]

Do you own any other stocks? Pretty risky!

yes, quite a variety, and I'm well aware of the risks :) My buy in prices have not been met yet so it might not even happen.

[Banksie]

those on here are a lot more likely to diversify than others!

I may have mentioned this before but I am new to investing (only began a few weeks back - so I guess I fall into the taxi driver crowd :) ). The last few days have been a good lesson in diversification. I don't have many shares but do have holdings in DIL and SUM, so although DIL is down, overall my portfolio is still looking healthy.

[Blendy]

Ah ok, just worried about your risk profile there for a minute! Should know better that those on here are a lot more likely to diversify than others!

Hey no worries - that's what we're all here for, right? A bit of support and helpful advice. :)

[Banksie]

Not for me to tell you what to do, but I wouldn't trade out of either of those two stocks. you may be buying at a much higher price than I did in 2011, but they are good companies.

Yes, it is my intention to hold. With DIL and SUM a big price correction would be a good opportunity for me to acquire more.

I think I got into this bull market too late to make massive returns - so now it is all about watching, learning and positioning myself for the next cycle.

[lastmoa]

Not for me to tell you what to do, but I wouldn't trade out of either of those two stocks. you may be buying at a much higher price than I did in 2011, but they are good companies.

I could understand selling to take some profits if holding since the early days. But more importantly, I'd only really look to sell when the story changes - despite all the volatility and froth and bubble in the markets, both DIL and SUM are highly profitable well run companies, with a great product their users like. DIL of course has the potential arbitrage upside that might come from a takeover (which has been theorised for a few months), or from floating on the Nasdaq which management have acknowledged they have explored.

add to that, the potential for increased revenue for DIL on the back of a new 'add-on' product. We all know they have invested in more developers which we should see the fruits of by eoy, hopefully.
Like you say, the story hasn't changed so why sell.
Incidentally, I see Facebook and LinkedIn reported on US last night - nice figures.

[Xerof]

Banksie, you say you only began investing a few weeks ago, and you already seem to be fretting over price movements. If you are truely an investor, don't act like a trader. If you have invested, then I presume you have done your research and are happy to hold these stocks, so why **** your pants over the daily noise? Give them a few years to florish, but keep an eye on the 'story' and their progress. If things change that are not to your liking, then sell out.

only sayin' but hope it helps

[Banksie]

why **** your pants over the daily noise?

Not sure which post you are referring to here. All I am doing is commenting on the price movements. Trying to get an understanding of what influences the market. As you say, day to day movements shouldn't worry the investor...but it is interesting to track them.

There are plenty of good companies on the NZX that I would like to invest in that I believe are overpriced at this point. I am watching, waiting, and accumulating cash for the next market bottom.

[JohnnyTheHorse]

Diligent looking for a UI/UX designer. Here's a nice quote from the job listing:


The focus of the job will be to assist the Product Owner & Business stakeholders in strategizing and developing a suite of applications for the PC, iPad & Windows 8 market.

http://www.linkedin.com/jobs?trk=jobs_search_public_seo_page&jobId=5495995&viewJob=

[JohnnyTheHorse]

The term "suite" leads me to believe that they are possibly developing a whole set of applications for board members (and likely other markets such as universities and hospitals etc). Just going from memory I think they have employed somewhere around 15 new R&D staff (excluding graphic design staff etc) since the start of 2012, so I'm expecting some quite big products to be released, not just minor add-ons.

Wont be letting go of these shares any time soon :t_up:

[lastmoa]

Diligent watchers may be interested to see that the company has released some Webinars in concert with the Companies Secretaries Network, on the benefits of Diligent's products and board portals.

http://www.link2portal.com/new-video-series-value-electronic-board-books

thanks Sparky.

[JohnnyTheHorse]

Dreams certainly are free Sparky. I must say, DIL is my favorite stock. The potential future upside to the SP is huge, whilst I feel the risk is relatively small for a growth company (it is there however... imagine the effect of a security breach!!).

For those of you wanting more videos and case studies, check out the insights section on their website. I think most of the content is quite new and very interesting/helpful.

http://www.boardbooks.com/white-papers/

[CJ]

Sigh. Dreams are free, aren't they?


Dreams certainly are free Sparky.Maybe for those that bought in at 10c, effectively giving them away. My 'dreams' cost me $2 per share ;)

[Banksie]

Quarterly results are out:
https://www.nzx.com/companies/DIL/announcements/236113

Graph on pg8 of the presentation gives a good representation of the potential of the SaaS model.

[JohnnyTheHorse]

Gotta like continued margin expansion :t_up:

[lastmoa]

Quarterly results are out:
https://www.nzx.com/companies/DIL/announcements/236113

Graph on pg8 of the presentation gives a good representation of the potential of the SaaS model.

Exactly, Banksie. And this is one of the 'tech-things' most people don't get. Great for us, investing in this SAAS subscription-model space, now and for the future!

[CJ]

Gotta like continued margin expansion :t_up:Love it when that tipping point is reached. Xero still a long way off.

[Everwood]

If they are indeed good for 16c per share in earnings profit for the end of FY2013, then we might expect the price rise on a quarterly basis to look like this, should she behave in her usual quarterly jump-up fashion

mid July: $9.10 approx
mid October: $10.90 approx
mid Jan: $12.70 approx.



I like your potential estimates. Do you have a potential estimated value in 2 to 3 years time? If Diligent has not been bought out.

[Banksie]

If they are good for bumping up EPS from 9.4c to over 16c, then the price will edge up towards $12.70 or so.

Looking at the financials provided to SEC, DIL have reported 2c (US$) EPS for the quarter, this is comparable to last year where they reported 11c for the year. I don't see much seasonal variation (which you wouldn't expect given their business model). Am I missing something in the deferred revenue figures that indicate an increase in EPS towards the end of the year? Or is the expected increase going to come from new business?

[Banksie]

I think there were one offs affecting EPS. If you look at the revenue, margin and EBITDA gains, they are on track for 16, maybe 17c.

Thanks, I found it - the one off special committee expense of 1.6m. Adding that back gives a quarterly EPS around the 4c mark.

[JohnnyTheHorse]

Another interesting thing in there was the 50% increase of expenditure on R&D. I like that... a lot :p. By the looks of things, I don't think they'll be needing to spend any of their US$36.5mil pile of cash on R&D as they can easily fund it without that and still make very healthy profits. Bring on the dividend or share buy back! (Although how long have we been saying that?)

[JohnnyTheHorse]

It continues to astound me that this information is freely available to all and sundry yet everyone continues to support XRO at twice the price! Zee market works in mysterious ways, non?

Well the board and CEO should be somewhat focused on maximising shareholder wealth, which they clearly aren't doing well. If they really wanted to maximise our wealth by increasing the SP then they would employ an extra 200 sales staff and start losing outrageous amounts of money each year. After all, that seems to be the "in" thing right now. Maybe this needs to be brought up at the AGM?

[CJ]

Broken record, but the difference is growth potential. Disc: Hold both XRO and DILWould need to check my numbers but isn't DIL growing revenue at a faster rate than XRO at the moment?

[CJ]

No XRO is outpacing them w.r.t. the most recent revenue numbers. Regardless, I was talking about growth potential , specificically thinking about the $ value of market share that XRO is attempting to capture.I have just done a quick check with annual revenues to 31 March and (provided I picked up the correct numbers) they are as follows:

Year - 2011 - 2012 - 2013
XRO - 9m - 19m - 39m
DIL - 9m - 23m - 50m

Source: http://www.xero.com/about/investors/ and https://www.nzx.com/files/attachments/175043.pdf

[CJ]

Looks like we might have both been wrong with the numbers - XRO is at $39m Q1 2013 isn't it?You found my typo (now corrected) and saved it for prosperity.

To me that shows DIL growing revenue at a faster rate than XRO. It also has a much lower CAC (sales and market) and with a retention rate of 97% (which would be hard for XRO to beat given the number of SME that go out of business annually (ie. no fault to XRO)).

Edit - not saying that XRO isn't a great company, just that its valuation seems high compared to DIL.

[Slam dunk]

Diligent proving efficient users of capital (see article below)

DILIGENT, FRONDE, BRISCOES LEAD THE WAY IN EFFICIENCY
JASON KRUPP
401 words
14 May 2013
Dominion Post


DOMPOS
4
English
© 2013 Fairfax New Zealand Limited. All Rights Reserved.
DILIGENT, Fronde and Briscoes were the most efficient users of capital last year, according to a new report by Armillary Private Capital, but overall the performance of Kiwi firms slipped.
The governance software developer Diligent was found to be the best performer on a Return on Capital Employed (Roce) basis in 2012, with a value of 348.7 per cent.
The stunning performance beat the previous year's winner, Fronde, with the IT services company second with a Roce score of 166.8 per cent. Retailer Briscoes was third at 77.6 per cent.
The Roce tool was developed by DuPont (javascript:void(0);) and measures how much capital is locked in a business, and how efficiently it's being used.
"Both [Diligent and Briscoes] provide a prime example of the operational leverage achievable by businesses and the market has rewarded both these entities with a strong share-price performance that has tracked the improvement on Roce," said David Wallace, Armillary's managing director.
Diligent shares have increased at 115 per cent during the past 12 months, while Briscoes shares rose 64 per cent.
However, a look at the broader market shows the performance of New Zealand firms backsliding on a capital efficiency basis, with a median Roce score of 6.6 per cent, down from 7 per cent in the previous year.
Wallace said the headline figure was broadly in line with recent years, a period when the economy had struggled to shake off the lingering effects of the global financial crisis.
Among the worst Roce performers last year (minus 75 per cent and beyond) were Genesis Research, Veritas Investments (javascript:void(0);), Pacific Edge, Windflow Technology (javascript:void(0);), Wool Equities (javascript:void(0);), Wellington Drive Technologies (javascript:void(0);) and Xero to name a few.
Wallace said it was important to distinguish between firms like Xero, where the strategy is to grow market share ahead of profits, and those who were no longer operating efficiently.
Almost all state-owned enterprises recorded positive Roce scores in 2012, but at a median of 5.2 per cent it lagged the national benchmark. Kordia was the top performer with a score of 11.2 per cent, followed by Genesis Energy with 8.4 per cent, Transpower with 5.7 per cent and Mighty River Power (javascript:void(0);) with 5.2 per cent.
New Zealand Railways was the only decliner, with a Roce score of 2.5 per cent.

[CJ]

Executive Vice President of FinanceYou have to love US job titles. I guess financial controller doesn't sound as impressive.

Reminds me of this scene from American Physco: http://youtu.be/f1s5QsXdEyk

[JohnnyTheHorse]

Looks like a bit of buying from some fund managers going on this morning? Big on market trades being made... price up to $7.60 as I post this. Have been plenty of large off market trades in the last week too.

[tosspot]

Looks like a bit of buying from some fund managers going on this morning? Big on market trades being made... price up to $7.60 as I post this. Have been plenty of large off market trades in the last week too.

Yea it appears to be a mini run maybe to $8 coming up sellers drying up.