Diligent Boardbooks IPO

[Joshuatree]

not an explanation, but an observation. Bring up a 1 year DIL chart, draw a line under the three higher lows, and extend it out. You will see price broke its long uptrend at ~$7.60.

fact of the matter is A LOT of holders who use TA as part of the toolkit would have cut and run at that point. The gap down from that level probably adds strength to this observation.

Xerofs subtle hint to get out.

[Corporate]

auditors are there to ensure accounting standards are adhered to so I think you are splitting hairs.

There is no splitting hairs here. The statement "due to auditor requirement" is incorrect.

[baller18]

Just to clarify - that's 8c US.

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

9,141,295 divided by 120,015,175 = 7.6c USD.

Divide that by the 0.82c exchange rate as at the announcement, and you get 9.3c NZD per share.




Sparky I think you have done your calculations wrong.
Owner's earnings = cash from operating expenses (net income + depreciation, amortization etc + interest payments) minus capital expenditures.
Reading the 2012 annual report cash from generating expenses stands at $22,712,648 and capital expenditures is 5,036,753.
Therefore, $22,712,648 - 5,036,753 = $17,675,895
$17,675,895 / 120,015,175 = 0.147.
We actually get an owner's earning per shares at 14.7cents USD which is higher than the EPS.

Is this correct?

[Amor Fati]

JP Morgan in, Milford out, just a swap in money men or did I miss something?

[Balance]

JP Morgan in, Milford out, just a swap in money men or did I miss something?

Milford is no different from any other fund managers - they have made plenty of money in DIL and the excuse which have surfaced for them to take their profits presented itself.

I find it amazing though that Milford would classify DIL as too risky for their clients -in my view, Ecoya and Moa are too risky, not DIL!

J P Morgan is a US based manager so one assumes has a better appreciation of DIL's future potential.

[Jay]

J P Morgan is a US based manager so one assumes has a better appreciation of DIL's future potential. and maybe plans??

[Balance]

and maybe plans??

Possible but it does not actually mean a whole heap, unless DIL executes its plans effectively and profitably.

[PlatnuM195]

Bought a little more in the $6 range but getting slightly nervous here.

[JohnnyTheHorse]

Have been buying a bit more DIL over the last two days....as you might guess, I'm bullish on the stock, and happy to be paying these cheaper prices.

I can see Hoop shaking his head from here. In all seriousness though, this is very irrationally priced right now based on my models. I have freed up a lot of cash to pounce on this if this support holds and we see a turn around.

[artemis]

Good article from Chalkie on the Brian Henry case and some history of DIL's not so flash governance. He ends with:

"None of this adds up to a smoking gun so Chalkie will be intrigued to see the FMA's case when it eventually comes out. After all this time, it had better be good."

http://www.stuff.co.nz/business/opinion-analysis/9012097/No-smoking-gun

[Balance]

I can see Hoop shaking his head from here. In all seriousness though, this is very irrationally priced right now based on my models. I have freed up a lot of cash to pounce on this if this support holds and we see a turn around.

There is a good parallel to be drawn here with what happened with Facebook.

The fundamentals of the stock were well articulated at the time of the IPO but due to a whole series of unfortunate events, some of the company's making but actually, mostly because the market went cold on the stock, sentiments went very sour.

Any news were given a negative slant - the fact that the IPO brokers were the real culprit meant bugger all to the dooms merchants out there.

So much so that FB's share price was trashed to below $18.00 - less than 50% of the IPO price.

Nothing the company said or do would make any difference so FB's executives just quietly went about their work, and let the results speak for themselves.

Well, history now records that those who ignored the dooms merchants (including some of the reknown fund managers and analysts) and bought the stock - have made up to 100% on the stock.

DIL is doing the same thing - let the market thinks what it wants in the short term but get on with the job.

When the market sold down DIL shares on the back of a FMA action against Brian Henry, who has long since left the company - it tells you the market is behaved irrationally.

Therein lies the great opportunities.

[Balance]

Chance to ride DIL back to $8 - 48% return from current levels.

Milestones I am tracking for the stock to go back up :

1. Resolution of accounting issues - sp back up to $6.00

2. Quarterly results announced - sp back to $6.50

3. New product launched - sp back to $7.00

4. Nasdaq listing & Special dividend announced - clean up before Nasdaq listing $8.00

5. Actual Nasdaq listing - $10.00

Brave enough to take the ride? :D

Milford selling down of its 9% and deliberately high profile trashing of its darling stock have provided the opportunity.

The Milford Express in reverse!

[baller18]

Had a gut feeling today would go up...

[Balance]

Milford have sold out

http://www.milfordasset.com/wp-content/blogs.dir/1/files_mf/activegrowthfundupdateaugust2013.pdf

First post from me, hopefully one of many

Thank you, Audiav and welcome.

I owe you a beer as I read the article, heard their analyst on radio trashing the stock and immediately put in a buy order.

DIL is 'too risky' for their clients? Cannot get a better buy signal when you hear Milford talking up the prospects of Moa and Wynyard!

[blu3]

I've devoted quite a big part of my portfolio to DIL, buying for an average price of $6.95 a month ago, but I definitely didn't expect a such fall. I've just bought another chunk at $5.60 to average down a bit... please, go up a bit, my portfolio is showing a solid red so far :(

PS: also Moosie, please stop saying such things, every time you say something, the exact opposite happens.

[baller18]

[QUOTE=blu3;420572]I've devoted quite a big part of my portfolio to DIL, buying for an average price of $6.95 a month ago, but I definitely didn't expect a such fall. I've just bought another chunk at $5.60 to average down a bit... please, go up a bit, my portfolio is showing a solid red so far :(

PS: also Moosie, please stop saying such things, every time you say something, the exact opposite happens - lol!

I see a turnaround sooner or later...

Up 8% already...
Is this the turnaround??!!!
If quarterly meets the markets expectations, expecting at least a 10% + rise on the day

[Balance]

I have heard that Craigs/Deutsche Bank have come out with a buy on DIL this morning. Are any Craigs clients in a position to comment?

Valuation of $7.20 and price target of $8.00 - that's what I am picking up from my contact.

[robbo24]

Moosie's main purpose is for when you're selling shares - not buying them.

All the hype and riff raff can add a nice little premium to the old pock on sell day.

[iceman]

Chance to ride DIL back to $8 - 48% return from current levels.

Milestones I am tracking for the stock to go back up :

1. Resolution of accounting issues - sp back up to $6.00

2. Quarterly results announced - sp back to $6.50

3. New product launched - sp back to $7.00

4. Nasdaq listing & Special dividend announced - clean up before Nasdaq listing $8.00

5. Actual Nasdaq listing - $10.00

Brave enough to take the ride? :D

Milford selling down of its 9% and deliberately high profile trashing of its darling stock have provided the opportunity.

The Milford Express in reverse!

Well set out Balance and yes I'm ready for the ride. But you are off to a bad start with you prediction #1, unless Resolution comes out this morning. Up 8% in first 30 minutes of trading :)

[baller18]

Valuation of $7.20 and price target of $8.00 - that's what I am picking up from my contact.

This is why there is such a large spike in SP today??

[Balance]

Well set out Balance and yes I'm ready for the ride. But you are off to a bad start with you prediction #1, unless Resolution comes out this morning. Up 8% in first 30 minutes of trading :)


That's okay :D

Move all the price targets up by 50 cents?

[baller18]

Ok, whoa, $5.99, looks like it can go back to $6, so could please someone explain to me why is there such a large rise in the SP? Just because of craig's?
Apologies if im being annoying, I am just trying to understand the market a bit more.
However, I do understand it is impossible to predict what the market will do the next day and so on...

[chad321]

Was looking to buy in at around $5.40 - $5.50 and the funds to do so were just about to arrive. Looks like I have missed the chance. Will keep an eye on it just in case over the next week.

[Balance]

Ok, whoa, $5.99, looks like it can go back to $6, so could please someone explain to me why is there such a large rise in the SP? Just because of craig's?
Apologies if im being annoying, I am just trying to understand the market a bit more.
However, I do understand it is impossible to predict what the market will do the next day and so on...

Craigs is one reason as the market needed some reassurance after Milford's deliberate trashing of the stock yesterday.

My own belief is that Milford's deliberate trashing of the stock yesterday spooked some of the uninitiated shareholders out there yesterday who bailed out in a mad panic.

Buyers*are returning to capture the upside on an oversold stock.

[Lorne Ranger]

Wow 11% in an hour of trading! Shows how undervalued it is, but also that it is going to be volatile for days yet as traders bite and chew the SP as it recovers to more rational* levels.

*No im not saying earlier sellers were irrational, for there are many kind of rationality ; ) just that my kind says it should be up towards the $7 mark.

[lascar]

WOW, reach $6!:t_up:

[Slowlearna]

making my buy at $6 at the start of the week not quite so bad.

[Balance]

Remember the roadshows DIL had been doing in the States?

Looking like DIL has been on the watch list of the fundies over there - hence why Milford's 9% was absorbed.

More important is that the fall below $6.00 must have triggered Buy orders from overseas.

Looking to some crossings at $6.00 soon.

[CJ]

Milford's last lot of sales were at an average of $6.07 so we will see if they made the right decision to exit completely (taking some off the table at $7-8 seems reasonable).

[Balance]

Milford's last lot of sales were at an average of $6.07 so we will see if they made the right decision to exit completely (taking some off the table at $7-8 seems reasonable).

No issue with Milford taking its profits but unacceptable for them to then deliberately trash the stock.

I wonder if anyone who sold out yesterday at $5.40 will take action against Milford?

[tosspot]

wiipee im back to what i paid for this. pain in the arse looking back could of waited a few more days and been up 10+ %

[JohnnyTheHorse]

No issue with Milford taking its profits but unacceptable for them to then deliberately trash the stock.

I wonder if anyone who sold out yesterday at $5.40 will take action against Milford?

I must say, Milford will come out of this looking a bit silly. If their plan was to trash the stock to then buy it back cheaper, it looks like they have failed badly.

[blakecb]

Long time lurker, first time poster....I'll try and make it a good one! (Though probably only Hoop will think so!)

This 'resurgence' is at such small volumes, I wouldn't breathe a sigh of relief just yet for those who are in.

While searching through the forum I came across this comparison between 'Phaedrus style' and 'Snoopy style' investing (or roughly TA vs FA) and it is worth a read for comparisons to some of the comments on this thread: http://www.sharetrader.co.nz/showthread.php?3588-TEL-TELIUA-and-Timing

And this tongue-in-check opinion on 'how to invest' (again, might ring some bells for a few on here): http://www.sharetrader.co.nz/showthread.php?740-Building-a-Share-Portfolio

Some take home lessons in all that I think. I also read through the RAK thread and a lot of the same rhetoric was going on about buying 'cheap' shares that were rapidly falling in value... even some of the same names as are appearing on this thread.

I know there are many differences between the mentioned companies and DIL, but the over-arching point is the same: Buy with momentum upward (at entry points as per TA) and sell with momentum downward (as per exit points as per TA), ie. Why catch a failing knife at all?

Baller18 - if you want to learn some basic TA, there are some interesting youtube videos by PSAadmin (enter in search) to help you get started.

[Slowlearna]

Great post Blakecb

[Hoop]

signed in at 11am It seems I missed all the action. Bugger!
Boy oh Boy this DIL thread is getting exciting
Geez...talk about breaking into a junk yard and kicking the sleeping guard dog...
Trying to make some sense technical wise.
NOTE: the green trendlines creating a symmetrical triangle pattern

DIL has an established primary downtrend line...The stock was so broken that at the lunchtime's $6.10, still hasn't fixed it up.
To regain bullish composure it has to break the downtrend ,,,therefore it has to go past $6.20 to fix some of the technical damage.
There could be a pattern emerging...(maybe)..In mid july a similar event happened resulting in a dead cat bounce.
If the share price fails to breach the downtrend line presently around the $6.20..It will result in another sucker rally (relief rally) confirming DIL could be in a bear market cycle. (Edit: Breaking of the primary uptrend line will be the key confirmation)
IF DIL breaches the downtrend line then there's a glimmer of hope ...breaking the $6.50 resistance will indicate the severe bearish correction could be over and raises the chances that the Bull is back in charge with the resumption of the bull market cycle...This will be the point when most of the medium and more conversitive TA signals will fire off buy signals.

EDIT: as you see the primary uptrend is still intact...so theoretically until that primary uptrend is broken DIL can be considered to be in a bull market cycle undergoing a severe market correction

Disc: Still on the sidelines...reason :too slow

http://i458.photobucket.com/albums/qq306/Hoop_1/DIL08082013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL08082013.gif.html)

[robbo24]

Hopefully all those who who worried yesterday feel a bit better today.

That same type of relief that was felt 2 weeks ago when the same thing happened... Meanwhile, nothing has really changed...

[robbo24]

Trying to make some sense techical wise

It's a flag pattern, clearly.

[MAC]

Some questions to consider from a humble value investor;

1. Has DIL performance numerically justified a primary uptrend of 61.5% p.a over the last two years ?

2. Are intrinsic values presently greater or lower than the primary trend (presently 5.45) ?

3. Have the fundamental signals altered despite all the recent noise ?

It is very rare for a stock to break primary trend to the downside unless the fundamentals support such a move. That’s not to say that a bomb going off in Cyprus couldn't knock some nelly under the line, but IMHO entirely unlikely.

[Hoop]

Long time lurker, first time poster....I'll try and make it a good one! (Though probably only Hoop will think so!)

This 'resurgence' is at such small volumes, I wouldn't breathe a sigh of relief just yet for those who are in.

While searching through the forum I came across this comparison between 'Phaedrus style' and 'Snoopy style' investing (or roughly TA vs FA) and it is worth a read for comparisons to some of the comments on this thread: http://www.sharetrader.co.nz/showthread.php?3588-TEL-TELIUA-and-Timing

And this tongue-in-check opinion on 'how to invest' (again, might ring some bells for a few on here): http://www.sharetrader.co.nz/showthread.php?740-Building-a-Share-Portfolio

Some take home lessons in all that I think. I also read through the RAK thread and a lot of the same rhetoric was going on about buying 'cheap' shares that were rapidly falling in value... even some of the same names as are appearing on this thread.

I know there are many differences between the mentioned companies and DIL, but the over-arching point is the same: Buy with momentum upward (at entry points as per TA) and sell with momentum downward (as per exit points as per TA), ie. Why catch a failing knife at all?

Baller18 - if you want to learn some basic TA, there are some interesting youtube videos by PSAadmin (enter in search) to help you get started.

Welcome blakecb.
Some take home lessons in all that I think. I also read through the RAK thread and a lot of the same rhetoric was going on about buying 'cheap' shares that were rapidly falling in value... even some of the same names as are appearing on this thread.
Yeah RAK :p...I spent hours and hours days weeks researching using FA scoured all the results and all the financial data available.....as the shareprice started to fall I bought more I was the Moosie back then...This was going to be my golden long term investment stock........Phaedrus PMed me asking the question why am I fighting Mr Market what on earth are you doing!!!..2 weeks after I declared on the RAK Thread that I was going to be a long term investor in RAK..the guts fell out of RAK and I was gone with the tail between my legs.....I probably set a world record for the shortest time being a long term investor :D:(
Those were the days...ugggh

[Dej]

I think she rose a bit to fast... think it will settle sub $6 until the issue is fully resolved and good news can start rolling. Have freed up some money and am waiting for my buy price (yes I missed my chance in recent lows!)

[robbo24]

unconfirmed reports of a $7.10 'buy' status put on DIL today by Deutsche Bank...

Meanwhile the intraday traders begin their profit taking exercise...

[Lorne Ranger]

Hmmm in some ways a slower steady increase would engender more confidence than these volatile oscillations (good name for a band), so I hope it settles down a bit in the coming days.

Still the happiest ive been all week thats for sure, and still have fundamental faith in the stock.

[Mista_Trix]

Sometimes I wish my job didn't revolve around working all day at a computer, the temptation to hit refresh is far too high.

[robbo24]

Can anyone else help with the comments Milford made about DIL that might warrant legal action? Cheers.

http://www.legislation.govt.nz/act/public/1988/0234/latest/DLM140427.html and http://www.legislation.govt.nz/act/public/1988/0234/latest/DLM140428.html

Without getting into legal advice (the above is only information as an example) there are many different types of liability related to publicly traded shares.

These types of sections even apply to everyone on this forum...

[blakecb]

If you believe in technical analysis, then BlakeCB is right.

If you believe in fundamental analysis, then buy when its substantially cheaper than intrinsic value, and hold and wait patiently.

I don't claim to understand TA well enough to trade, and I don't desire to do so. I am happy to buy and hold based on a nice margin of safety on a higher intrinsic value, for a company that i think has good growth over the medium term.

Hopefully all those who who worried yesterday feel a bit better today.

The way I see value is what someone is prepared to pay for something. If a company manages itself well, produces a quality product that can't be easily replicated (which I would question in this case too), continues to produce good results and doesn't make anyone too nervous, then justifiably, the price will rise on the back of - key word -confidence. If they get mired in their own administrative problems, sales slow up a bit, good fund managers sell off their stock, etc., then that confidence is undermined as the market has more worries to take into account when determining its value. The company is valued each time there is a trade.

I wouldn't be buying if I was anyone yet. Maybe the stock will go bullish and come out of this bear cycle, reflecting greater market confidence, and then it will be away again. The key point is, at present, there is no evidence of that.

My guess is that this little spike today could be short-lived.

[Balance]

Can anyone else help with the comments Milford made about DIL that might warrant legal action? Cheers.

A complaint to the FMA would be a good start.

It's one thing for an investor to sell but an entirely different matter when a profile investor and fund like Milford sells and then, trash talk the stock.

The infor on Milford's site refers to concerns about corporate governance. That is fine.

What is not fine is for their analyst to go on Morning Report yesterday morning to broadcast the same with the warning that 'DIL is now too risky' for their clients to be in.

[robbo24]

Thanks robbo,
Sorry I wasn't clear with my question. I was trying to find out what it was that Milford actually said about DIL that Balance thinks might warrant legal action?

I never really looked into it but I think all they said was that in their opinion the risk associated with DIL was not right for them. I am interested to see what Balance is talking about.

Nonetheless, the threshold for ss 11 & 11A is pretty high.

[goldfish]

Wow this stocks more volatile then a volcano, i sold out two days ago soon as i heard they not going to release the quarterly. Will take my small profit. Looking to get back in now if it slowly goes down over next few weeks, maybe 540 or until support comes in. Dont know at least this keeps you on your toes

[Balance]

I never really looked into it but I think all they said was that in their opinion the risk associated with DIL was not right for them. I am interested to see what Balance is talking about.

Nonetheless, the threshold for ss 11 & 11A is pretty high.

http://www.radionz.co.nz/audio/player/2564753

Listen from 6.58 mins in.

"It's just too risky to risk our clients' money in' are the concluding remarks.

Those are very alarming words indeed!

[robbo24]

What is not fine is for their analyst to go on Morning Report yesterday morning to broadcast the same with the warning that 'DIL is now too risky' for their clients to be in.

On what ground does a statement that only applies to their clients and which only reflects their opinion of a stock warrant a complaint to the FMA?

How do you shoehorn those comments into the enactments that the FMA has jurisdiction to investigate? In other words, what do you suggest that they have breached? http://www.legislation.govt.nz/act/public/2011/0005/latest/DLM3232235.html and http://www.legislation.govt.nz/act/public/2011/0005/latest/link.aspx?id=DLM3232236

[Balance]

http://www.nbr.co.nz/article/diligent-shares-surge-after-broker-upgrades-rating-saying-34-percent-fall-%E2%80%98overcooked-bd-144

[goldfish]

your broker is winning, even if you aren't!

I bought in at 560 and sold at 600 two weeks later for no to little risk, how is that not winning?

[Xerof]

You're a shareholder Balance, why don't you phone FMA, if you see a problem. You do like to shoot from behind the tree.



My own belief is that Milford's deliberate trashing of the stock yesterday spooked some of the uninitiated shareholders out there yesterday who bailed out in a mad panic

How do you KNOW it was Milford who "trashed" the stock yesterday. Are you the executing broker? Isn't it breaching confidence for a broker to talk about client activities? Isn't it against NZX rules for a broker to try to influence public forums, even if its through a third party?

Milford could probably have you up for slander

I'm calling Winston Peters about this :cool:

[robbo24]

I bought in at 560 and sold at 600 two weeks later for no to little risk, how is that not winning?

Your accountant will be winning while he or she figures out how to avoid paying your income tax...

[Balance]

You're a shareholder Balance, why don't you phone FMA, if you see a problem. You do like to shoot from behind the tree.




How do you KNOW it was Milford who "trashed" the stock yesterday. Are you the executing broker? Isn't it breaching confidence for a broker to talk about client activities? Isn't it against NZX rules for a broker to try to influence public forums, even if its through a third party?

Milford could probably have you up for slander

I'm calling Winston Peters about this :cool:

Eh - did you bother to listen to the Radio NZ link I pasted?

What does "too risky" mean and sound to you?

I simply made the point that if an investor sold out because of the stock trashing talk, he/she could look at some action.

I also made it clear I am happy for Milford to talk the stock down - buying opportunity.

Are you related to Milford in any way?

[robbo24]

"It's just too risky to risk our clients' money in' are the concluding remarks.

How do you propose that it is false or misleading that their opinion is that the risk it too great for their portfolio?

If they said, for instance, "It's just too risky to risk out clients' money because Diligent management is corrupt and a competitor is about to release a far superior product" - and this was all fabricated - then sure.

Otherwise, I am not convinced there is anything untoward about their justification for selling their shares...

[Xerof]

did you bother to listen to the Radio NZ link I pasted Nope, heard it live


What does "too risky" mean and sound to you? In the context of it being in a downtrend, with uncertainty surrounding accounting issues, I also thought it was too risky - go on sue me



Are you related to Milford in any way? Nope, not in any way, staff or client, but I have heard of Brian Gaynor, does that count?

[ddrone]

Moosie was there a reason why you though the quarterly was only a few weeks away? From where I'm standing re-stating previous years will have to be done first and will be a fairly lengthy process given it would also have to re-audited.

[baller18]

another $7.20 call saying the sp is at a 20-30% discount. this is without the new figures yet...
Another call from who?

[baller18]

Does anyone have any clues to as when the quarterly might be due?
Next week by any chance??

[CJ]

Does anyone have any clues to as when the quarterly might be due?
Next week by any chance??Didn't they say in the last announcement it would be delayed till the fixed the accounting issues.

[winner69]

Does anyone have any clues to as when the quarterly might be due?
Next week by any chance??

Which quarter?

Maybe June and sept together

[baller18]

almost forgot the part in the news update today saying "the company has acknowledged it is developing SEVERAL new products"...
Where? Where? Where? Link plz :D

[winner69]

SEVERAL = "More than two but not many"
Fantastic news .... with that slip of a tongue by an insider the share price will rocket to 673 tomorrow

[baller18]

Reported from craigs....
Not Dil themselves, they've previously already indicated it tho....

[robbo24]

Reported from craigs....
Not Dil themselves, they've previously already indicated it tho....

Two points in the NBR article:


Underpinning the company's earnings, its Boardbooks product has a 97 percent retention rate and its profit margins are likely to continue to increase as it reaches scale, Mr Ridgewell says. The company will need to develop new products to maintain growth and has indicated that several products are under development.


http://www.nbr.co.nz/article/diligent-shares-surge-after-broker-upgrades-rating-saying-34-percent-fall-%E2%80%98overcooked-bd-144

[brevos]

Does anyone have any info on the number of unconverted preference shares that DIL has? I've heard it's quite large, and therefore would have a significant impact on valuation?

[zigzag]

Page 50 of the 2012 ann. report - check Redeemable Preferred Stock. There are 32,667,123 outstanding. You guys really need to get your heads around this, or it will come back and bite you in the bum. And not just in terms of your ratio calcs, but it also effects future dividends, buybacks, takeovers and control of the company. i.e. Spring Street and Carroll Capital virtually control this company.

Yeah. That is a lot.

[JohnnyTheHorse]

Well, the good ship DIL is at $5.90 today. Still great value IMO. Tempted to pick up a whisker more, but I have increased my holding by 25% this week on the recent dip.

Well yesterday it went up to the 625-630 resistance and failed (as expected - went too far too soon) and then fell back to sit nicely on the 200dma. Textbook really? My guess for today would be another attempt at that resistance and maybe a close at it... we shall see. I agree that no matter what, it is intrinsically very good value right now.

[Mista_Trix]

Great second day for a run, all markets looking good.
Potentially well timed for pushing further on the strength of global news.

[Balance]

Reading research report by Deutsche Bank :

- Underlying sales growth is still solid. US weakness offset by strength elsewhere.

- Forecasting solid PBT.

- Sales growth better than their forecast.

- Accounting restatement will knock 5-10% off F2012 revenue and more in 2010 and 2011.

- Profit impact will be much bigger.

- Impact will reduce and level off in future reporting periods.

- DCF valuation of $7.40 (reduced by 20c to reflect risk of a worse outcome than expected for restatement).

Expecting DIL to launch new products which will drive further growth, new products currently not priced in by markets.

[MAC]

That's a fair and conservative approach by Deutsche Bank for now in allowing for the risk of a less than positive possible HY13 final outcome.

Of course any specific allowance for revenue restatement and profit impact is pure speculation until Deloitte have completed their work.

[CJ]

That's a fair and conservative approach by Deutsche Bank for now in allowing for the risk of a less than positive possible HY13 final outcome.

Of course any specific allowance for revenue restatement and profit impact is pure speculation until Deloitte have completed their work.Agree.

In addition though, one only has to look at XRO to see that Revenue numbers aren't the most important thing. Growing customers is key (though revenue is one way of measurement) and they have been growing customers very steadily with a 97% retention rate, very important for those recurring revenues.

[baller18]

Break the $6 mark please...

[winner69]

Break the $6 mark please...


You must be suffering at the mo baller

Hang in there mate .......things will get better ....or maybe this is the beginning of the big crash

[Lorne Ranger]

this is the end of the beginning. nasdaq, new products and divvies ahoy!

Personally I dont mind it holding current levels for a few days, just to re-establish some normality and give my nerves a break.

Agree medium to long term its a great stock, but I dont need any more excitement this week thanks, so I'd take a hold. Have a gut feeling it will just hover around the 6 most of the day with a 10-20c flurry either way at the end being a friday. Soon find out anyway.....

(disc holding on tightly to DIL)

[chad321]

Come on guys, let it drop a bit more so that I can buy in ;)

[Lorne Ranger]

Come on guys, let it drop a bit more so that I can buy in ;)

How are you not already tempted at $5.96??? If I had any more under performing other stocks to trade I would! But I can understand the psychology of having it seen it 10% cheaper a day ago, it's not easy to commit right now and still feel like its a bargain, until you look at the big picture and realise how undervalued it is. Thats why im happy with a hold until wednesday to give the stock back some trust, before it starts moving on up on improving sentiment, and again when the fabled ACCs and QR arrives. Have... to.... be...... patient........argh.

[chad321]

How are you not already tempted at $5.96??? If I had any more under performing other stocks to trade I would! But I can understand the psychology of having it seen it 10% cheaper a day ago, it's not easy to commit right now and still feel like its a bargain, until you look at the big picture and realise how undervalued it is. Thats why im happy with a hold until wednesday to give the stock back some trust, before it starts moving on up on improving sentiment, and again when the fabled ACCs and QR arrives. Have... to.... be...... patient........argh.

A week ago I wanted to get it at this price. I am going to gamble and see what happens over the next few weeks with the re-release of the financials and the new quarterly. It most likely won't go down but stranger things have happened ;)

[blakecb]

Reading research report by Deutsche Bank :

- Accounting restatement will knock 5-10% off F2012 revenue and more in 2010 and 2011.



How do you think the market will react if the accounting restatement does in fact result in up to 10% less revenue being shown for the past 3 years? When people see that in black and white, what might their reaction be?

All this talk of new products too...if all it took was developing 'new products' to create enormously greater profit margins, why wouldn't everyone do it?? The fact is it's not straightforward to develop a new product that people want and that has good pick-up (which is what everyone is depending on in terms of DIL's competition btw). New products may even dilute the service and level of specialisation they are currently offering with boardbooks. Before getting excited about 'a new product' people actually need to know what it is and what the market for it is.

There is a lot of fanaticism around this stock. There doesn't seem to be much 'level-headed' conversation around it at all. I would be worried a new investor might stumble across this thread and sink all their money into this company thinking it was a 'get rick quick' scheme. And look it may be, but there is a great deal of risk involved with any software company (no matter what their level of 'customer retention'), let alone one presently dealing with serious accounting issues and an absent quarterly.

The time to invest would be after a good quarterly and with some certainty around the accounting issues, even if you 'miss out' on these so-called 'cheap shares' (which I would say are not cheap but accurately valued for today).

DISC: Not holding.

[blakecb]

A week ago I wanted to get it at this price. I am going to gamble and see what happens over the next few weeks with the re-release of the financials and the new quarterly. It most likely won't go down but stranger things have happened ;)

Gambling is what it is. Worth a gamble if you don't mind potentially losing the money.

[baller18]

Gambling is what it is. Worth a gamble if you don't mind potentially losing the money.
How exactly have you calculated the intrinsic value? Please do explain...
Your not really making a case for yourself saying its accurately valued for today, basing on??

[blakecb]

How exactly have you calculated the intrinsic value? Please do explain...

The intrinsic value of the stock to me is what the current share price is. That valuation takes into account their accounting issues, their slowing sales data, their late quarterly, their competition and every other issue that could be imagined at the present moment. It also takes into account their potential to continue growing and to produce fantastic profits that return dividends to their shareholders. It's all there in today's share price. Would I buy the company with all those variables going on? No, because I don't like the level of risk currently there.

When there is more certainty I may have another look, no doubt I will pay more for the privilege, but then I don't mind that as I am not interested in gambling, as per my comment. The fact that everyone is so nervous really says it all, doesn't it?

[baller18]

140,000 shares just from Dil!!! S*****
Wish I had that kind of net worth... sighs...

[Toasty]

140,000 shares just from Dil!!! S*****
Wish I had that kind of net worth... sighs...

You can. Just buy low and sell high as opposed to my own strategy which is to buy on hype and panic at the first sign of weakness...

[kizame]

You can. Just buy low and sell high as opposed to my own strategy which is to buy on hype and panic at the first sign of weakness...

Hahaha had to laugh at that,I think I have been there a few times too many to.
At least your honest.

[CJ]

Differs to my strategy of buy at a good price, see it reach its peak, feel invincible, then hold on as it drops back done.

Have recently changed to partially selling to take profits which appears to be a signal for another bull run.

[winner69]

140,000 shares just from Dil!!! S*****
Wish I had that kind of net worth... sighs...

and that's less than 10% of his share portfolio .... and in his property and other global interests and sigh again

but keep at it baller ... it WILL be like you one day

[baller18]

and that's less than 10% of his share portfolio .... and in his property and other global interests and sigh again

but keep at it baller ... it WILL be like you one day

Excuse me that 10% of his portfolio??!!
What???!!!
Sighs.... X10000
Why don't we just all follow sparky...
If that's the case, SPC has a 8 million portfolio!!! what??!!

[nextbigthing]

140,000 shares just from Dil!!! S*****
Wish I had that kind of net worth... sighs...

Hey Baller,

Look on the bright side mate. Imagine the stress you would've been suffering when 140000 shares were sliding in value instead of whatever you own :)

As others have said, you'll get there, keep up the good work!

[baller18]

Hey Baller,

Look on the bright side mate. Imagine the stress you would've been suffering when 140000 shares were sliding in value instead of whatever you own :)

As others have said, you'll get there, keep up the good work!

Thanks mate!
Working towards becoming an intelligent investor, and ill work on increasing my portfolio step by step.

[CJ]

What I can say is that I hold minimum amounts of debt, and I don't do margin. I'm not rich enough to do that!i'm not rich enough not to do that.

[zigzag]

140,000 shares just from Dil!!! S*****
Wish I had that kind of net worth... sighs...

Should have been a clown.

[GRIFFIN]

And if you want to be like the clown buy a heap of PEB shares on monday, would that be some where near the mark sparky.

[MAC]

It's an observation of mine that the local brokerages and some analysts, more so than in Australia, seem to sentiment follow in their valuations, that is they take fundamental value and add or subtract a sentiment margin in an attempt to better forecast shorter term moves in SP. I'd prefer this did not occur but I can understand that the market holds them to account when share prices swing around as DIL has done over the last six months.

Analysts like Deutsche Bank also must be conservative to protect both their reputation and the interests of their clients who may not necessarily be able or willing to determine value or risk for themselves. Their present DIL valuation of $7.40 was reduced by $0.20 to “allow for the risk of an accounting restatement of 5-10% off FY12 revenue and more in 2010 and 2011”. This is speculation only on their part but is a fair approach in conservatively managing the risk of their clients.

Once Deloitte have completed all their good work we may well see analysts revalue yet again.

Pays to DYOR and analysis.

[Cricketfan]

I still believe that my assumptions around real earnings growth are correct over the next five years, being 50% EPS growth per annum (on average), based on the likelihood of a new product or products. The ability for Diligent to sell these new products into existing clients will be easy and hugely profitable, especially given the 97% client retention numbers.

I've heard mention of the new product(s) a few times now, but I'm just wondering how you know these will be easy to sell to existing clients? Is it not possible that they will develop a niche product or one that is simply not needed by their existing clients? Or have they said that they are targeting existing clients and expect a high uptake by them?

Also, what would your valuation be without the new product(s)?

[zigzag]

Sparky. Why do you persist in using the figure of 82m shares? There are 132m shares. Besides, I can't see them paying any kind of dividend, because it is not tax effective in USA. Some kind of share buyback is more likely.

[Hoop]

............. but if everything turns out well, well, up she goes! anyone can make a big profit right now, but this is a true opportunity to buy low and sell much, much higher given a year or two. such is how sparky'ite fortunes are made

Yes Moosie you can make millions with this once in 10000+ type uptrend...however now that this party has ended, don't you think buying into DIL and make your fortune like Sparky is somewhat akin to shutting the stable doors after the horses have bolted.

Moosie.....but now it is different...

Sparky bought in and averaged up on an uptrend ($1.50 to $3.50 area?) and in a NZ Equity Bull Market Cycle...and repeating his quote from another thread ..."it is easier to be right in a bull market".

Buying in and averaging up in that uptrending stock within an overall Bull market Cycle Equity environment is a highly successful well known textbook investment strategy...Sparky has proved this works as well as thousands of others in the past

Now how important was that Primary up trend?....very impt and spectacular as well.... It started at the end of the global (and NZ) equity bear market (March 2009) under doom and gloom and has travelled upwards during this current bull market....it went up from 10 (14cents) and broke down at $7.20!!!!!!!!!!!!!!. on the 20th June 2013

Now that DIL is operating below a broken primary trend line its no longer an automatic buy and hold stock .. we will see how Sparky gets on as he seems to be abandoning that successful strategy for something else..

Yes it's different now........The meteoric 4.25 year uptrend is now history...there are now longer term investor sell signals which were absent for those previous 4.25 years...At this moment DIL is in a downtrend. DIL is in the NZX50 index environment which has its own Bull market cycle under threat...

Its not the end of the world ...DIL could turn and go up again but chances are any up trend will be a normal one at best.....If some reason DIL stays downtrending there are strategies to make money in downtrends I did it with MFT (http://www.sharetrader.co.nz/showthread.php?760-MFT/page19&highlight=mft) ** using a "rowing" MA30 strategy...It's very time consuming and is hard work mentally. Using the buy and hold with fundamental hope strategy (sailing) when dealing with down trending stocks is the wrong strategy to use, your money is locked in awaiting the up turn and become unavailable to capture other far better opportunities out in the marketplace.


** End quote from my post... "At the end of trade 8 that $7800 has turned into $14780... +89% profit during a Bear market cycle on a share with had lost nearly 2/3's of its share value ( 810c high to 340c low).... Damn good eh".

Sort of makes you think and appreciate bull markets ..and..just how special DIL 800% rise was...eh?

[Hoop]

....It is amusing to see technical analysis methodology projected onto fundamental investor behaviour......

TA is the analysis of all past to present investor behaviour history.......To take the extreme example in assuming that all investor trading in DIL are done by fundamental investors then TA is charted information showing Mr Market knowledge of everything to know about fundamentals including any hush hush wink wink activity that's not privy to us less investor mortals like me.

Mr Market is collective of all of us...also a collective of all our IQ's...therefore in theory Mr Market is more knowledgable than us and has a higher IQ than us....
A TAist is just a receiver and decipherer of information from this higher power and then has the decision to be a messenger, to tell people about it or not to...

.....so....when Mr Market does something different against your fundamental analysis views...then all I can say is as a messenger ....instead of being amused..try being wary.

...but if you think you are smarter than Mr Market (many do think that) or you think Mr Market is wrong then you can just ignore him...the good thing about a free market you have that right, the choice is yours to make and yours alone...but remember any activity you do with your choice will become a small part of Mr Market behaviour for us techies to analyse ..intrinsic value and all :D

[zigzag]

There are not that many shares? Somewhere in between perhaps?

Y'eah. I get a D- for arithmetic. I was using page 50 of the annual report. 32,667,123 preferred plus 83,776,155 ords = 116,443,327. NOT 132m.

[zigzag]

Sparky. Why do you persist in using the figure of 82m shares? There are 132m shares. Besides, I can't see them paying any kind of dividend, because it is not tax effective in USA. Some kind of share buyback is more likely.

Sorry Sparky. I got the number wrong. It was a simple counting mistake, At least we are now both on the same page as far as the number of shares goes. About 116.5m, and around 120m including the options.

[winner69]

Hoop - you just don't get it

Moose said earlier - "the market is always right, even when its wrong as it will only pay what it is willing to" and finished off his little commentary with "the market is wrong right now, and soon enough we will see a more 'correct' valuation"

See the market can be both right and wrong ... Just like TA can be right or wrong and just like FA can be right or wrong. The real answer is probably there is no right and there is no wrong.

Emotion and passion seems to be driver of many of the views on DIL ...but essentially al we hear is a repititive monologue of growth, 97% customer retention, pile of cash and maybe new products. I wonder what that is worth? I got rubbished when I said 5 bucks and I got rubbished when I suggested to baller maybe 50 bucks. I should just have asked moose eh Hoop

All I know is that DIL is 30% odd down from a few weeks ago ...jeez Milford must be morons selling out. It's down that much for a reason .....punters are not comfortable with several reasons. That enough is for some (morons) to sell.

Against my better judgement I still hold .....forgive me Hoop cause I hold in hope that this is a temporary blip and eventually I will be able to lock in even greater profits. But hope rests on 20 cents and 1 days forgiveness. Not very disciplined am I Hoop. Next week is another week and no doubt DIL will fly.

Balance got told off for being anti on the NOG thread when one or two tell the same story over and over again. Maybe that will be my fate ....because I'm sure I will hear a story about growth, 97% customer retention, a pile of cash and new products tomorrow and probably the day after and even the day after that.

HOPE IS A STRATEGY ....isn't it Hoop

[baller18]

[QUOTE=winner69;421025]
See the market can be both right and wrong ... Just like TA can be right or wrong and just like FA can be right or wrong. The real answer is probably there is no right and there is no wrong.

I agree with you on this winner, I have been reading and studying up on intrinsic value. However, intrinsic value can be so subjective from one person to the other. So, like you said, there is no right or wrong and really time will tell.
However, I do believe in the fundamentals of a business, because that's what makes a business succeed and if in the medium term nothing has changed the fundamentals of Dil, they why shouldn't there be a SP back to where it was before the 30% drop.

However, one more thing I would like to add, does Dil have long term prospects?
Can I see Dil being a successful and dominating business 10 years from now? In all honesty, no.
Can I see apple being a successful and dominating business in 10 years time? In all honesty, no.
Can I see woolworths being a successful and dominating business in 10 years time? Yes

For me, Dil is a short (being 1-2 years) to medium term hold.

Personally Dil is not a clear long term hold stock as its long term prospects is not clear cut...

My 5 cents...

[winner69]

[QUOTE=winner69;421025]
See the market can be both right and wrong ... Just like TA can be right or wrong and just like FA can be right or wrong. The real answer is probably there is no right and there is no wrong.

I agree with you on this winner, I have been reading and studying up on intrinsic value. However, intrinsic value can be so subjective from one person to the other. So, like you said, there is no right or wrong and really time will tell.
However, I do believe in the fundamentals of a business, because that's what makes a business succeed and if in the medium term nothing has changed the fundamentals of Dil, they why shouldn't there be a SP back to where it was before the 30% drop.

However, one more thing I would like to add, does Dil have long term prospects?
Can


Baller ...maybe the 8buck plus was just a plain stupid overvalued price and the market was wrong.

Yes nothing has changed fundamentally with the DIL business model ....so if the 8 bucks was a stupid price it might not go back there for a while. Maybe 6 bucks is where the price should be, to reflect those unchanged fundamentals?

What you think?

[baller18]

[QUOTE=baller18;421026]


Baller ...maybe the 8buck plus was just a plain stupid overvalued price and the market was wrong.

Yes nothing has changed fundamentally with the DIL business model ....so if the 8 bucks was a stupid price it might not go back there for a while. Maybe 6 bucks is where the price should be, to reflect those unchanged fundamentals?

What you think?

Yes, $6 can be the SP to reflect the unchanged fundamentals of the company.
However, IMO, the market did get a bit spooked by the accounting issues. So no surprises there with the drop in SP, so there shouldn't be a surprise once when the accounting issues are cleared up, the SP rises, but who knows by how much.
However, the market is keen to pay for a company who "will be" increasing their revenue and their profits.
I do believe Dil will be increasing their revenue and profits, and therefore the market will be paying for the increase in revenue and profits.
So if the SP sits at $6 for the time being due to accounting issues, once when its cleared up, and predicting in 1 -2 years time, new priducts, increased revenues and increased profits, why wouldn't the SP go pass $6. Thoughts?

[Dej]

[QUOTE=baller18;421028]

Ebay 2005 - revenue $4.5 billion, share price $40.
Ebay 2012 - revenue $14 billion, share price $40.

Amazon 2004 - revenue $6.9 billion, share price $60
Amazon 2009 - revenue $24.5 billion, share price $60

Yahoo 2003 - revenue $1.6 billion, share price $15
Yahoo 2012 - revenue $5 billion, share price $15

But this time "its different", right?

Yahoo 2013 last quarterly results showed a decrease in profit from 900k to 800k, yet the share price is $27 dollars now.

Amazon 2010 revenues was $34 million; 2012 was $61 million, share price was $100 in 2010 and is now $300.

Both which are good increases, one on bad news and one on good. Is the way of the sector really.

[Dej]

[QUOTE=baller18;421028]

Ebay 2005 - revenue $4.5 billion, share price $40.
Ebay 2012 - revenue $14 billion, share price $40.

Amazon 2004 - revenue $6.9 billion, share price $60
Amazon 2009 - revenue $24.5 billion, share price $60

Yahoo 2003 - revenue $1.6 billion, share price $15
Yahoo 2012 - revenue $5 billion, share price $15

But this time "its different", right?

Yahoo 2013 last quarterly results showed a decrease in profit from 900k to 800k, yet the share price is $27 dollars now.

Amazon 2010 revenues was $34 million; 2012 was $61 million, share price was $100 in 2010 and is now $300.

Both which are good increases, one on bad news and one on good. Is the way of the sector really. I get your point though KW.

[winner69]

Page 50 of the 2012 ann. report - check Redeemable Preferred Stock. There are 32,667,123 outstanding. You guys really need to get your heads around this, or it will come back and bite you in the bum. And not just in terms of your ratio calcs, but it also effects future dividends, buybacks, takeovers and control of the company. i.e. Spring Street and Carroll Capital virtually control this company.

Wonder what these dudes want from DIL .....them first minority shareholders last methinks

Reason to apply a bit of a discount factor?

[CJ]

Wonder what these dudes want from DIL .....them first minority shareholders last methinks

Reason to apply a bit of a discount factor?i could be wrong but I don't think they have been requesting their dividend so I think their interests are aligned with al shareholders - they want it to succeed.

At some stage they ill convert so they want the share price as high as possible.

Then, at some stage they will sell, so again they want the share price as high as possible.

What we don't know is their preference between on market (either NZX or Nasdaq) or trade sale.

[zigzag]

i could be wrong but I don't think they have been requesting their dividend so I think their interests are aligned with al shareholders - they want it to succeed.

At some stage they ill convert so they want the share price as high as possible.

Then, at some stage they will sell, so again they want the share price as high as possible.

What we don't know is their preference between on market (either NZX or Nasdaq) or trade sale.

I think that Carroll Capital took the dividend, and Spring Street didn't. Mr liptak said at the AGM that it was only a penny anyway. They got their shares for 10c, so they done alright so far. Why quibble over pennies?

[winner69]

Yep Spring have forfeited their 200k odd divie for the last few years

[winner69]

Had another ;ook at cash flows over the years.

Chart shows Free Cash Flow (Operating less Investment) by quarter and a rolling 4 quarter total.

Just from the data and with no emotion it looks like a $5m quarter and a $20m annual total is about it .... except the March quarter and the likely June quarter are behind the same period last year

The red line looks like the share price chart eh .... but then the market is wrong

[baller18]

Had another ;ook at cash flows over the years.

Chart shows Free Cash Flow (Operating less Investment) by quarter and a rolling 4 quarter total.

Just from the data and with no emotion it looks like a $5m quarter and a $20m annual total is about it .... except the March quarter and the likely June quarter are behind the same period last year

The red line looks like the share price chart eh .... but then the market is wrong

hmmm... it does indeed....

[blakecb]

...the market did get a bit spooked by the accounting issues. So no surprises there with the drop in SP, so there shouldn't be a surprise once when the accounting issues are cleared up, the SP rises, but who knows by how much.
However, the market is keen to pay for a company who "will be" increasing their revenue and their profits.




if in the medium term nothing has changed the fundamentals of Dil, they why shouldn't there be a SP back to where it was before the 30% drop.


It's not just what the accounting issues may or may not reveal that is affecting the share price, but the fact there were accounting issues in the first place. A company of its share price should not have had these issues and that has knocked people's confidence in it. Most people would say that getting your book-keeping right is 'fundamental' to running a successful company. Good move going with Deloitte however, that should make sure it doesn't happen again.

Those who bought in early (I wasn't one of them) saw great potential in this company. That potential has and is being realised. There are many companies with potential (that I'm sure would have a high "intrinsic value" to use your and others' term) that don't realise their potential and fade into oblivion. So whether it was a case of buying in on FA or recognising great potential that was then realised by the company will be viewed differently depending on your approach to share trading.

[blakecb]

the thinking that the market is a single entity unable to make mistakes is inherently flawed. if it were always right the market price would stay exactly the same for 3 months at a time and then shoot up or down at every new announcment.

The world changes every day.

[winner69]

hmmm... it does indeed....

And such a chart doesn't suggest a 500 mill market cap is warranted on current cash generation ......probably the share price at the moment is assuming more than 50% pa growth for next x years.

[blakecb]

Sparky, I think it's great you have made a killing out of DIL - you picked the company and saw its potential value before others did, and have greatly profited from it. That's the goal for everyone and it's great to see.

The reason I decided to post in this thread after watching it for a while was that some of the rhetoric seemed incredibly bullish for the scenario that was playing out. I would hate to see people invest more than they could afford to lose on DIL at this stage. As far as I can see, it is in a downward trend and the time to buy is when that trend is broken. If that is going to happen, my strong feeling is that it would be after their accounting issues are addressed and a quarterly that put them back on track. Buying then may mean you miss a bump, but it is nowhere near as risky as buying now.

I have posted it previously, but the FA/TA arguments have been going a long time - if you didn't see the link in my previous post - this thread is well worth a read (the two main players, Phaedrus and Snoopy are the main ones worth reading for the differences between these 2 systems): http://www.sharetrader.co.nz/showthread.php?3588-TEL-TELIUA-and-Timing

Maybe that way we don't need to rehash the argument on this thread, :) or at least, try and cover new ground.

[Whipmoney]

TA is the analysis of all past to present investor behaviour history.......To take the extreme example in assuming that all investor trading in DIL are done by fundamental investors then TA is charted information showing Mr Market knowledge of everything to know about fundamentals including any hush hush wink wink activity that's not privy to us less investor mortals like me.

Mr Market is collective of all of us...also a collective of all our IQ's...therefore in theory Mr Market is more knowledgable than us and has a higher IQ than us....
A TAist is just a receiver and decipherer of information from this higher power and then has the decision to be a messenger, to tell people about it or not to...

.....so....when Mr Market does something different against your fundamental analysis views...then all I can say is as a messenger ....instead of being amused..try being wary.

1) TA is not the analysis of "all" past to present factors is it only tells you when, how many and at what price one sells, not why did they sell.

2) Just because the market is essentially the aggregate of all its various members actions, it doesn't necessarily mean it is the aggregate of their IQ's... Rather it's probably closer to the average. People are both rational and irrational and the market reflects this. Some succumb to the hysteria of the market (on both the ups and downs) and others cooly take advantage of it.

[winner69]

I haven't had this much philosophy in years, and who thought the stock market would have brought it up!

Deep thinking about WRONG seems to be have been around a lot lately. From Sparkies favourite blog

No One Is Ever Wrong Anymore

http://www.thereformedbroker.com/2012/02/02/no-one-is-ever-wrong-anymore/

Thanks Sparks --- his blog kept me occupied for a while this afternoon as the rain steadily comes down making the grass greener for the farmers

[blakecb]

Just had another look at the DIL chart this afternoon (see below)....you more experienced TAers correct me if I'm wrong....but looks to me like bullish divergence on the Stochastic (black lines). So maybe it's found bottom and is about to turn around?

To confirm it would be good to see the RSI and Stochastic move above 50 into bull territory (red side arrows), and for it to break the downward trend line, but seems there are some signals already here (K crossing D and bouncing before the 20 line). All that is followed by a close with a higher high and higher low (black down arrow).

I'm not an experienced TAer, so wouldn't want to put anyone wrong, but potentially looks to be the case if the confirmations occur:
4697

[winner69]

Moose .....I hoping like mad that DIL goes up to 8 bucks and then 10 bucks .....hope is a strategy

Just that facts/current financial performance don't seem to support that feeling at the moment but we will see .... I have only expressed views and made no projections so I can be neither right or wrong

[winner69]

Hope I am not wrong this time

Like its cash flows DIL has 2 strong trend lines - both of reasonable duration as the red lines shows.

What is does show that going to 8 bucks when it did was the 'irrational' time in DIL's steady rise .... good old JPM eh and Milford the gurus in seeing that this was completely stupid/irrational.

At 6 bucks DIL is about where it should be based on that recent long term uptrend (maybe a bit under).

So maybe arounf 6.75 early next year and maybe 8 bucks late next year ..... but unless those cash flows start improving quickly the next trend line might be a lot flatter

Hope is a strategy - sometimes hope meets hype and we all win .... lets hope so

[winner69]

If those prefs are converted what will happen to the ordinary share price .... go down a third or stay the same

[zigzag]

If those prefs are converted what will happen to the ordinary share price .... go down a third or stay the same

Price wise it doesn't really matter. Most investors regard the preferentials as equity already. i.e. it is already valued on a fully diluted basis.

[winner69]

Price wise it doesn't really matter. Most investors regard the preferentials as equity already. i.e. it is already valued on a fully diluted basis.

So DILs market cap is more like $750m in implied terms .... I am scared now that hope is not a good strategy

[zigzag]

So DILs market cap is more like $750m in implied terms .... I am scared now that hope is not a good strategy

At the closing price of $5.90, I would say 120m x 5.90 = 708m. I wouldn't be hoping for much more until there is more clarity around their results and accounting issues.

[zigzag]

in NZD terms.

remember they make USD. apply the FX rate. then look at MKTO market cap (a loss making company for the foreseeable future with similar revenue to DIL and by no means a market leader in their chosen field...). then factor in future products and that cash pile.

looks a bit undervalued now eh?

buy the rumour, hold the fact, sell when the story changes

PE is around 50. Not exactly cheap. Maybe some of those future products and cash pile is already factored in. Do you feel lucky? Well, do you Moose?

[winner69]

If the growth rate is 50% or greater then it is cheap on the PEG ratio. Indeed, some say a PEG score of 1.2 is still respectable, though the lower the better.

https://en.wikipedia.org/wiki/PEG_ratio

If current cash flow about 20 mill ( US) then current price implies about 20% pa growth for next 5 years. As with most cash flow models most of the attributed value is way out in the future, even if using nil growth after year 5

So CHEAP CHEAP eh if 50% is the 'consensus growth' rate is 50%


Use the 50% pa rate and a fair valuation is about 16 bucks

I still struggle to come grasp this 50% pa growth rate cause -

-- last 12 months free cash flow growth been close to zero
-- sort of suggests some signs of maturity in the business model
-- "servicing" and "supporting" customer base seems to be a cost that punters don't take fully into account
--don't they have to start paying that dreaded tax soon

Listening to you guys about growth, retention rates, new products and that pile of cash happy to accept 20% pa growth ... But still convinced 50% is pie in the sky

So hope remains the strategy .. I won't sell just yet (maybe if stays under 550 for a couple of days) and live in hope of 7 bucks and higher.

But what the heck do I know ...prob wrong again

[Halebop]

-- last 12 months free cash flow growth been close to zero
--don't they have to start paying that dreaded tax soon


Hi W69, they've started paying tax - the last published Q10 report for the 3 months to March 2013 included quite high rates of tax (41%). For me this implied perhaps they were not getting to offset losses in the newly opened locations? However with the revenue recognition issues this needs to be re-based before it can be understood. In any case, whatever the tax rate, the last quarter had a US$1.4m tax drag on cash flows so comparisons need to be made on a pre-tax basis to understand which way cash is growing.

[winner69]

Halebop ...So they need to sell heaps more to make the same bucks as before eh.

For comparison wouldn't it be better to assume they paid cash in prior period to see what growth was .... Prob give sort of answer anyway

[Halebop]

Halebop ...So they need to sell heaps more to make the same bucks as before eh.

For comparison wouldn't it be better to assume they paid cash in prior period to see what growth was .... Prob give sort of answer anyway

Given New Locations = Growth = Initial Losses unable to be offset I think a gross comparison works better but either way will produce a fairer comparison than ignoring the differences altogether.

[bonne vie]

There is a lot of speculation as to how the revenue recognition adjustments will affect the profit/tax etc but appears little discussion of affect on Deferred Revenue balance sheet item. This maybe way too simplistic but wouldn't the main effect be that the Deferred Revenue liability is going to increase and retained earnings for past periods decrease (will be accounted for in future R/E). The net affect less "free cash" and tax payable spread over a longer term e.g. aligning with when the income is recognised particularly the spreading of the installation fees over the period of the contract rather than the 12 months previously used. IMHO As long as the company is a going concern until all current agreements income is recognised then over time little impact other than making it clearer to shareholders the true deferred revenue position which needs to be offset against the "cash pile" held.

[baller18]

I wish this could all be sorted soon... Patience, patience...

[CJ]

This maybe way too simplistic but wouldn't the main effect be that the Deferred Revenue liability is going to increase and retained earnings for past periods decrease (will be accounted for in future R/E). Not overly simplistic, it is that simple (well not quite but close enough). Less revenue in previous periods so equity goes down with a corresponding increase in 'Revenue not recognised' (deferred revenue liability). This isn't a 'liability' in the normal sense as I assume the contract ensures it is not refundable in almost any circumstance.

There is no impact on cash.

[bonne vie]

Not overly simplistic, it is that simple (well not quite but close enough). Less revenue in previous periods so equity goes down with a corresponding increase in 'Revenue not recognised' (deferred revenue liability). This isn't a 'liability' in the normal sense as I assume the contract ensures it is not refundable in almost any circumstance.

There is no impact on cash.

Agree it is not isn't as simple as that (e.g debtor/creditor turnover etc impact on cash) but thought it might assist to clarify position in a simple/short post. Re a "liability" in the normal sense and that is why my qualification re going concern. I do not know how to attach links but someone out there may want to attach todays notification.

[baller18]

Every announcement which has repeatedly indicated the same case will cause a drop in SP.

[ddrone]

Todays notification is just a US version of last weeks, nothing new.

[blakecb]

Bit of a strange couple of trades going on!
4701

Really need to see some buying pressure for a SP turn-around. That said, looking at the past volumes, the only big money that looks to have left the party is Milfords, so all this downward commotion may just be short-lived panic as some have suggested. Time will tell I guess.

[Hoop]

Just had another look at the DIL chart this afternoon (see below)....you more experienced TAers correct me if I'm wrong....but looks to me like bullish divergence on the Stochastic (black lines). So maybe it's found bottom and is about to turn around?

To confirm it would be good to see the RSI and Stochastic move above 50 into bull territory (red side arrows), and for it to break the downward trend line, but seems there are some signals already here (K crossing D and bouncing before the 20 line). All that is followed by a close with a higher high and higher low (black down arrow).

I'm not an experienced TAer, so wouldn't want to put anyone wrong, but potentially looks to be the case if the confirmations occur:
4697
Hi blakecb...A good attempt...probably can't change the default but if you can it might have to fiddle around with the Stoch periods to meet DIL trading behaviour .. its too sensitive (too fast) on your chart..you can see the obvious false sell signals while DIL was in its uptrend...a bullish divergence ...hmmm need 3 points for confirmation and not confirmed with the RSI. Could be an OK setting looking to get in after this downtrend ends (see reason below).
Below is another view .......an established downtrend channel with the DIL price bouncing around inside it....note:...its called a downtrend channel not a trading channel...downtrend channels are risky beasts as when they follow a breakaway gap there is usually a lot of volatility and you don't want to end up being "in" if it suddenly gaps down outside its trend channel. As you can see DIL is following this theoretical behaviour....

So whats Happened???
TA chart ...the main causative factor of a breakaway gap to form is exurberant behaviour when investors push the price far higher than it should.
The resulting change of trend after a breakaway gap in this case is a breather (pause) after a huge rise..although the trend is downward its still considered (75% of the time) as a longer term bullish factor.

From experience....the old rule is ::....if it overshoots then expect the correction to undershoot.....this is pure market physics theory...think of it as stretching a rubber band beyond it normal length and letting it go...The more you stretch it beyond its natural length the more it will rebound back to be less than its natural length when you let it go...Winner did a simple chart explaining this (reverting back to the mean)....In theory its fine but in practice the reverting back and closing of that gap (20th June 2013) is unfortunately always slower than the rubber band.

....Chartwise with DIL the quick revert failed when the flag pattern broke...Flags are quick breathers with high chances of closing the gap within a month (back to $7.50). Unfortunately the flag is gone and replaced with downtrend channel pattern...these are longer term versions of the flag but they are not as bullish..Investor uncertainty rules these downward channel patterns and as investors fret.. any news that's not anticipated can cause sudden behaviour (volatile). The busting of the MA200 has to be seen as another serious worry (think rubber band rebound ?)

When to buy???,,,as always ...wait for the buy signals.....Patience is a virtue,,to which many of our younger folk lack these days....all rip sh1t and bust..eh:)?

A break upwards outside the downtrend channel with "fast" TA indicators as confirmation....advise quick stops back inside the channel just in case the breakout fails.

Could this be the start of a downtrend?
Chartwise:..always possible.....using the downward channel chart pattern with probability table see Bulkowsky's Encyclopedia of Chart Patterns (2nd Ed) also the approximate figures are on the chart below.

Warning Bells that something is wrong?

Nothing yet.....watch for signs such as sudden drop in the OBV and/or gap down well through the bottom of the downward channel


http://i458.photobucket.com/albums/qq306/Hoop_1/DIL12082013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL12082013.gif.html)

[MAC]

So, does the market believe that the delay in reporting is;

a) Suggestive that Deloitte have found significant issues and thus is pricing in further risk, or,

b) Is positive as it gives Deloitte further and adequate time to thoroughly and finally ensure DIL accounting will be exacting and correct.

The market is pretty much flat since DIL first announced the delay on 6th August (5.80), but judging by todays meagre volume of 54,000 shares thus far, it would also seem there are few nervous nellies with conviction left to react.

[Balance]

http://www.radionz.co.nz/audio/player/2564753

Listen from 6.58 mins in.

"It's just too risky to risk our clients' money in' are the concluding remarks.

Those are very alarming words indeed!

Pity Milford did not keep a closer eye on their investments in Moa and Ecoya (whatever it is called now).

If Diligent with its strong customer retention and debt free cash accumulating balance sheet constitute 'just too risky', what do Ecoya and Moa (with cash burn and multiple profit downgrades on the card) constitute? Untouchables?

[winner69]

looks like another down day coming up .... may jsut have to lock in those multi year profits but heck not many buyers

[baller18]

looks like another down day coming up .... may jsut have to lock in those multi year profits but heck not many buyers
Only if i did too....

[Slowlearna]

looks like another down day coming up .... may jsut have to lock in those multi year profits but heck not many buyers

"It's just too risky to risk our clients' money in'. Quote from "Milford"

How risky is it to be buying at these levels? downside vs up?

[winner69]

you've seenthe forecsts and the low selling bottom right now. reward much higher than risk imho


But it's down to 565 moose

It's been DOWN DOWN DOWN for too long now .......but if I sell it will go down even more ..unless me broker can buy a decent job

[RTM]

So......it looks as tho folk are going to be unsure on Diligent until their accounts are properly re-stated. After this there should be more direction, in which ever way that might be. Had a read through SEC FORM 12b-25 they have filed.....there doesn't seem to be a date committed to.
Seems to me they need to get a date sorted out and work to that to resolve this issue for the market. And then we can get on with evaluating DIL based on their performance, rather than the current uncertainty,

Have I missed something ? Is there no date set ?

Disc. Have a few on Moosey's advice.

[NZSilver]

DIL will have its day in the sun, just hold tight.

[blakecb]

Price at Volume seems to show that the price is going to oscillate between around $5.75-$6.00 until things clear up. The good news, as Hoop has previously mentioned, is that not much of the smart money has left the party and the bearish period is on low volume.

[Lorne Ranger]

Price at Volume seems to show that the price is going to oscillate between around $5.75-$6.00 until things clear up. The good news, as Hoop has previously mentioned, is that not much of the smart money has left the party and the bearish period is on low volume.

Seems that way. As I said last week, I don't think this is a bad thing, and provides some confidence that it has some foundation of support after the recent abyss like tumbles. I'm content for it (and me) to rest here and await the news from Diligent in due course, (time-frame within reason please).

[winner69]

Hi blakecb...A good attempt...probably can't change the default but if you can it might have to fiddle around with the Stoch periods to meet DIL trading behaviour .. its too sensitive (too fast) on your chart..you can see the obvious false sell signals while DIL was in its uptrend...a bullish divergence ...hmmm need 3 points for confirmation and not confirmed with the RSI. Could be an OK setting looking to get in after this downtrend ends (see reason below).
Below is another view .......an established downtrend channel with the DIL price bouncing around inside it....note:...its called a downtrend channel not a trading channel...downtrend channels are risky beasts as when they follow a breakaway gap there is usually a lot of volatility and you don't want to end up being "in" if it suddenly gaps down outside its trend channel. As you can see DIL is following this theoretical behaviour....

So whats Happened???
TA chart ...the main causative factor of a breakaway gap to form is exurberant behaviour when investors push the price far higher than it should.
The resulting change of trend after a breakaway gap in this case is a breather (pause) after a huge rise..although the trend is downward its still considered (75% of the time) as a longer term bullish factor.

From experience....the old rule is ::....if it overshoots then expect the correction to undershoot.....this is pure market physics theory...think of it as stretching a rubber band beyond it normal length and letting it go...The more you stretch it beyond its natural length the more it will rebound back to be less than its natural length when you let it go...Winner did a simple chart explaining this (reverting back to the mean)....In theory its fine but in practice the reverting back and closing of that gap (20th June 2013) is unfortunately always slower than the rubber band.

....Chartwise with DIL the quick revert failed when the flag pattern broke...Flags are quick breathers with high chances of closing the gap within a month (back to $7.50). Unfortunately the flag is gone and replaced with downtrend channel pattern...these are longer term versions of the flag but they are not as bullish..Investor uncertainty rules these downward channel patterns and as investors fret.. any news that's not anticipated can cause sudden behaviour (volatile). The busting of the MA200 has to be seen as another serious worry (think rubber band rebound ?)

When to buy???,,,as always ...wait for the buy signals.....Patience is a virtue,,to which many of our younger folk lack these days....all rip sh1t and bust..eh:)?

A break upwards outside the downtrend channel with "fast" TA indicators as confirmation....advise quick stops back inside the channel just in case the breakout fails.

Could this be the start of a downtrend?
Chartwise:..always possible.....using the downward channel chart pattern with probability table see Bulkowsky's Encyclopedia of Chart Patterns (2nd Ed) also the approximate figures are on the chart below.

Warning Bells that something is wrong?

Nothing yet.....watch for signs such as sudden drop in the OBV and/or gap down well through the bottom of the downward channel


http://i458.photobucket.com/albums/qq306/Hoop_1/DIL12082013.gif (http://s458.photobucket.com/user/Hoop_1/media/DIL12082013.gif.html)

Fascinating chart Hoop = and so clear

You saying that it might gap up again and start a new upward channel?

Continuation of that downward channel seems a more compelling and credible story to me?

But we could both be wrong and it stays at 6 bucks odd for a while as it grows into a realistic valuation .... like the old saying value always catches up with price

[Amor Fati]

Deutsche Bank Market Research, 7 August.

"Cash is King: Upgrade to Buy."

"Upgrade to BUY
DIL's revenue recognition issues are deeply disappointing; however, we think the c34% slump in the share price since June is an over-reaction. Importantly, Tuesday's trading update suggested underlying sales growth is still solid. At $5.40, DIL trades on FY14e multiples of 22x P/FCF and 5.4x EV/Rev. In our view, the current share price fairly values the core Boardbooks product but places little value on possible new products. Upgrade to BUY with a $7.20 p/t."

Expert from Deutsche Banks Market Research, to help keep the faith. :-D

[MAC]

Now that's just bonkers, a 2.1% drop on volume of 3200 shares.

Seems the market has gone into hibernation as far as DIL is concerned, watch for a good positive outcome when the results land though.

[ddrone]

200 actually, look at the depth. Might get in again soon.

[lastmoa]

problem is DIL has never really had the limelight, its always been XRO this and XRO that. now that XRO has their AGM finished and didn't quite live up to customer numbers, if DIL can pull off some good news over the next few months we may see a big reversal...

Agree, but this isn't about Xero v Diligent.
Xero customers numbers and there ongoing rollout is fine. Well I see no reason to sell.
Yes, if Diligent's numbers are good then we will see a large reversal of the recent slump. Add to that any news we know is in the wings and it will be doubly-fast. Patience comes into play now and we have seen that this is not an attribute of all investors.
I did attend both AGM's and do see both having very worthy products, but one is light years ahead in presentation and marketing. imho.

[winner69]

true. might have to buy more soon, I'm patient and want to lower my average buy still furyhet before takeoff ;)

Moosie moosie .....dangerous game you contemplating

[Lorne Ranger]

Moosie moosie .....dangerous game you contemplating

Well its all judgement and guesswork anyway isn't it?! Whether you use intrinsic value, TA, FA, WTF, it all comes down to a judgement call.

Personally I have a psychic hamster named Conrad; I put the Heralds NZX pages in his cage each night and by morning his psychic bowels have given me guidance for the next day. It's been the most reliable system so far, but I still use my JUDGEMENT as to whether to follow his advice or not. He was wrong about MOA (although he may just have been commenting more literally than I realised), and luckily I CHOOSE not to invest.

[ddrone]

285k trade at $5.60... wonder who that was selling out / buying in.

[Hoop]

Well its all judgement and guesswork anyway isn't it?! Whether you use intrinsic value, TA, FA, WTF, it all comes down to a judgement call....Personally I have a psychic hamster named Conrad;

So I can deduct that you are not a long term investor then

Hamster Life span . . . . . . . . . . . . . . . . . . . .2-3 years

[baller18]

Oh my, back down to $5.60? what is going on here...

[Toasty]

Its ok its gone back up to $5.68 on the sale of 6 shares. A huge speculator no doubt...

[ddrone]

BOT? There's lots of tiny trades going on.

[Lorne Ranger]

So I can deduct that you are not a long term investor then

Hamster Life span . . . . . . . . . . . . . . . . . . . .2-3 years

Fair question, but in fact Conrad is third generation and the ability seems to increase in each. His uncle Paul is an octopus but he went traveling to Germany couple of years back and we haven't heard since. Hope he's ok.

Anyway just thought this might help lighten the mood, while we sit back and wait for something meaningful to happen.

[goldfish]

Anyone think its going to go under 500 next drop? I was looking at getting back in at 540ish but may hold out and see if itll go under 500. It looks like it might with no good news.

[winner69]

Anyone think its going to go under 500 next drop? I was looking at getting back in at 540ish but may hold out and see if itll go under 500. It looks like it might with no good news.

That chart of hoops with it downtrend channel would suggest so

Fundamentals probably say so as well

Good thing if it did would be moosie could average down at 550 ....and then average down at 500 ....and maybe at 450 as well ...wonder what is bottom line is .....better get belg to teach him about pyramids

[baller18]

What is going on????!!!

[winner69]

What is going on????!!!
Al I know it's going down ..down ....and tomorrow I sell if it goes down more

Baller. What you think is going on

[robbo24]

Look everyone, if you can't cope with the volatility, sell out and buy an ETF or give your money to a fund manager.

The TA terminology for this is "you got told."

[JohnnyTheHorse]

I'd say it's mostly traders controlling it right now and it will stay that way until there is solid news. If you can't beat them, join them? ;)

[baller18]

Al I know it's going down ..down ....and tomorrow I sell if it goes down more

Baller. What you think is going on
Not too sure to be honest.. Can't understand why it goes down with no news? Then it'll go back up to $6 or even a bit more with no news as well...
This is how Dil goes though...
Your thoughts?

[MAC]

Just relax, it's the market at work.

Agree with JohnnyTheHorse, traders are supressing the price with low volume back toward primary support at 5.49, simply because they can, watch for both traders and fund managers jumping back in at support levels tomorrow.

[baller18]

I can handle the volatility, I have been holding since it went down to $5.3 and $5.4, so makes no difference to me, even if its going to go down to $5 tomorrow.
I am just confused as to how the market moves, that was what my first remark was targeted at...
Thanks mac, johnnythehorse & moosie for the answer..

[winner69]

Remember Hoops blow top or something like .... he reckoned maybe DIL had one. RAK certainly had one a few years ago

Maybe this is what is happening to DIL now ..... no never, winner stop teasing

[Theracay]

Not too sure to be honest.. Can't understand why it goes down with no news? Then it'll go back up to $6 or even a bit more with no news as well...
This is how Dil goes though...
Your thoughts?

Who knows. Am invested a bit in BTU/BRL and that stock goes down with good news and goes up with no news.

[Wolf]

I'm thinking about getting in before the next announcement hopefully around 5.25 . When is the next announcement?

[Xerof]

bot and small lot trading suggest JP Morgan are at it again

Holymoly, I put up a suggestive, presumptuous but clearly unsubstantiated comment about what some prime brokers are prone to do, and it suddenly becomes fact.... When does the moose shooting season start?

Its in a downtrend, having fired a clear sell signal,
sentiment soured on the governance/accounting issues,
a very well respected local fund is out for now, until some clarification comes out,
it broke, then retested the 200 day MA, (on the back of an ill-timed broker note) and failed again.

Until some, if not all of the above factors are reversed, sellers will dominate in messy PA

[Halebop]

Still think DIL has merit. Cash generation is very good. Growth is still being acheived. Even incremental product releases could achieve high margin growth (while they could achieve high revenue growth with some unexpected product offer - this isn't necesary to support profit growth). Am not so bearish on the profit impacts as one or two of the brokers were, think what gets taken from one year gets passed onto the next.

But those technicals are looking awful...

[winner69]

have you watched BRL over the past few months? if you have you would know that JP morgan is possibly also doing so here. POSSIBLY (ie no proof, but its possible!)

Jeez moosie ....if the DIL chart ever looks likes the brl chart there will be of disappointed punters

[Lorne Ranger]

This may seem an odd question, but regarding today's 290,000 shares in a single trade, can someone explain briefly HOW these were traded? I didn't see that volume for sale or requested, so how do exchanges of that magnitude even take place? Does seller A have a nod nod wink with a prospective buyer B and they coordinate their deals and timing? Cheers

[stoploss]

This may seem an odd question, but regarding today's 290,000 shares in a single trade, can someone explain briefly HOW these were traded? I didn't see that volume for sale or requested, so how do exchanges of that magnitude even take place? Does seller A have a nod nod wink with a prospective buyer B and they coordinate their deals and timing? Cheers
The trade would more than likely have been executed by a share broker. They would have an interested party looking to sell 290,000 shares. Obviously there probably was not that amount of depth in the market. So the broker probably went to a fund manager like Milford and asked where they would buy 290,000 shares. Once they have their buyer and seller matched the shares are then crossed through the market. I think on the platform I use it will come through with XT next to it denoting a cross trade.

[Nigel]

Can I ask an historical question... why was DIL listed on the NZX and not another market? What is the connection to NZ? Taking a very quick look at the company's history, it all looks very American to me. I've heard people talking about another great NZ success story, but I'm not sure of NZ's input into this. Can someone please educate me?

[stoploss]

Can I ask an historical question... why was DIL listed on the NZX and not another market? What is the connection to NZ? Taking a very quick look at the company's history, it all looks very American to me. I've heard people talking about another great NZ success story, but I'm not sure of NZ's input into this. Can someone please educate me?

Not 100 % sure but someone will put me right, however I believe Mark Weldon was mates with one of the original directors and convinced him to list his company on his exchange instead of the USA.

[Roadrunner]

Just an observation based on all the comments re DIL over the last few months.I guess it doesnt matter too much how you form an opinion on a stock at the end of the day it comes down to faith or lack of it.We hear all the arguments for and against and it`s certainly entertaining!In May 2010 I started buying Diligent.I liked the idea of the product,despite their shaky start and couldnt stop buying them...accumulating 223,000(they were just 60/70 cents back then)They climbed and I took my profit and I thought I`d done well....time passed they climbed and I bought back in....they did me proud and I sold...and on and on right up to the present.Eventually I learned the most important lesson.....patience,patience,patience.Hindsight is a wonderful thing and with patience I could have been retired twice over.Nevertheless I`ve done very well but I`m about to embark on the biggest test of faith yet.I`m selling my house and going back to renting,Im selling my Porsche and the funds are all going into buying more DIL.Idiot or genius only time will tell but I would love to be buying in at these prices.I have no financial dependants by the way!!I have a 5 year plan for DIL to be $20 based on all the reasons weve heard before on here.A new product(s) and a Nasdaq listing will come in time and you will probably never again hear another auditing issue when this is put to bed.For any doubters worrying about well respected Milford Asset Management pulling out they have funds under management of approx $650m+ compare that to those that are buying in......Wasatch $13.4 BILLION and JP Morgan Chase $2.5 TRILLION!!.These are no mug punters and would have analysed DIL inside out and will no doubt be looking to a very successful partnership.Funny how they havent been put off by all this recent stuff??

[Balance]

Just an observation based on all the comments re DIL over the last few months.I guess it doesnt matter too much how you form an opinion on a stock at the end of the day it comes down to faith or lack of it.We hear all the arguments for and against and it`s certainly entertaining!In May 2010 I started buying Diligent.I liked the idea of the product,despite their shaky start and couldnt stop buying them...accumulating 223,000(they were just 60/70 cents back then)They climbed and I took my profit and I thought I`d done well....time passed they climbed and I bought back in....they did me proud and I sold...and on and on right up to the present.Eventually I learned the most important lesson.....patience,patience,patience.Hindsight is a wonderful thing and with patience I could have been retired twice over.Nevertheless I`ve done very well but I`m about to embark on the biggest test of faith yet.I`m selling my house and going back to renting,Im selling my Porsche and the funds are all going into buying more DIL.Idiot or genius only time will tell but I would love to be buying in at these prices.I have no financial dependants by the way!!I have a 5 year plan for DIL to be $20 based on all the reasons weve heard before on here.A new product(s) and a Nasdaq listing will come in time and you will probably never again hear another auditing issue when this is put to bed.For any doubters worrying about well respected Milford Asset Management pulling out they have funds under management of approx $650m+ compare that to those that are buying in......Wasatch $13.4 BILLION and JP Morgan Chase $2.5 TRILLION!!.These are no mug punters and would have analysed DIL inside out and will no doubt be looking to a very successful partnership.Funny how they havent been put off by all this recent stuff??

Never fall in love with a stock - ever.

[blackcap]

The TAB is just down the road too.....

[gv1]

Never fall in love with a stock - ever.

Hi balance.
I have learnt the hard way to.
Thanks for the advise. Wish someone did advise me before I learnt my lesson.

[winner69]

Suppose another down day coming up

[Mista_Trix]

Wow! Russian roulette played with five loaded chambers, I wish you well.

And here I am worrying I'm over diversified, and spreading my gains to thin.
Personally it's not a game I would play myself, but good luck to you.

[tosspot]

I mean realistically how long should this take. Its been 6 weeks since the end of the quarter, it seems as though Deloitte are putting this is the back draw. Diligent need to get this sorted soon. But woah at the guy mortgaging his house. Personally I would rather have a house right now that a lump of dil shares but who knows

[BIRMANBOY]

This should be your vintage Moosie 1977.....Diane keaton and Richard Gere ...Looking for Mr. Goodbar (or goodbuy) in this case
but it sent me flowers and said sorry and that it would never do it again...

[blakecb]

There seems to be strong support at around the $5.50 mark, and two attempts to get through the support have so far been rebuffed on good volume. Obviously a real worry for holders if it does get through that support on good volume though.
4710

[MAC]

Roadrunner,

Diligent still has fantastic growth potential going forward, successful people hothouse forward innovation, but you take on to much unnecessary risk without diversifying.

There are other great stocks with enormous forward growth potential, PEB, ATM, CRP, SUM, etc. Do your own research, pick the top five stocks and diversify would be my recommendation to you.

Sincerely,

Mac

[Nigel]

Looks like that 5.50 support is about to go. What's next after that?

[Hoop]

There seems to be strong support at around the $5.50 mark, and two attempts to get through the support have so far been rebuffed on good volume. Obviously a real worry for holders if it does get through that support on good volume though.
4710

Blakecb you beat me to it
It is a strong support zone 5.20 - 5.60

There's a saying... re: timing:... that one should not sell at or slightly above support. You sell when a support breaks.
You also can have a crack at buying in around a support with stops just below it just in case it fails

If the support zone fails the next support zone is 4.50 - 4.75.

PS:..keep an eye on the downward channel re: breaking upwards.

[blakecb]

Looks like that 5.50 support is about to go. What's next after that?

It is a bit flexible, like a rubber band, rather than a concrete floor. Bulls may well come to sure it up if it goes under.

If it does go, next support is around $4.75

[Hoop]

It is a bit flexible, like a rubber band, rather than a concrete floor. Bulls may well come to sure it up if it goes under.

If it does go, next support is around $4.75
Beat you this time :)

[lastmoa]

Good Barclays article on the need for Apple to help iPad sales by showing enterprise new business applications for its use.
http://www.zdnet.com/apple-needs-enterprise-to-pick-up-ipad-volume-7000019178/

Fig.4, showing platform uptake by corporates show the current domination Apple hold but Android increasing. MSFT falling away and Blackberry (ex RIM) about to disappear.

[Hoop]

Bounced on the $5.30....This is the bottom support of the downward channel ....the bottom (support) of the bollinger bands......If you add in the animal survival instinct indicator the Fib ex of the downward channel the 61.8% (support) is also at 5.30 so perhaps its done its drop for now. it's doing a retest (5.32) at that 5.30 again as I type...If it holds thats a good sign...if it fails the 5.25 (5.22) is the backstop
a bit of depth support developing at 5.30

[robbo24]

Bounced on the $5.30....

Time to play catch that knife!! The thrill of it all!!

[winner69]

Roadrunner,

Diligent still has fantastic growth potential going forward, successful people hothouse forward innovation, but you take on to much unnecessary risk without diversifying.

There are other great stocks with enormous forward growth potential, PEB, ATM, CRP, SUM, etc. Do your own research, pick the top five stocks and diversify would be my recommendation to you.

Sincerely,

Mac

Agree ...but priced at about 27 times free cash flow (or more than 35 times if you count for the pref) DIL needs to deliver on this growth just to maintain current share price

Milford prob couldn't believe their luck with the exuberance shown a few months ago I was stupid and undisiplined and didn't sell when the stop loss said so...bugger ...and hope was the only strategy left

However discipline prevailed the ore day and multi year profits were realised ...not as much as a few months ago .....and celebrated wih the bottl of Penfolds Grangeaclient gave me a whil ago ...wasn't that nice

[winner69]

What's the latest on the support levels?

Looking ok to me

[Toasty]

another hard bounce and anothrr hanging man forming for the day. $5.30 support is solid as a rock. only up from here (unless tge meteor strikes)

So further to fall then?

[Toasty]

lol, yes, do the opposite of what I say

Its going to become my new policy. Lol. I see its testing that $5.30 to $5.40 level again. Following the adage that pros trade in the afternoon I am quite interested to see where it goes today. News from Deloittes would be handy.

[CJ]

I sincerely hope you make a lot of money, because if you do, so will I.

But in my opinion, this is very risky behaviour.I'm hoping he does it quickly. The proceeds from a house (hopefully in Auckland) and a porsche should support the shareprice until the good news comes.

[Snoopy]

In May 2010 I started buying Diligent. I liked the idea of the product,despite their shaky start and couldn't stop buying them...accumulating 223,000(they were just 60/70 cents back then)They climbed and I took my profit and I thought I`d done well....time passed they climbed and I bought back in....they did me proud and I sold...and on and on right up to the present.Eventually I learned the most important lesson.....patience,patience,patience.Hindsight is a wonderful thing and with patience I could have been retired twice over.Nevertheless I`ve done very well but I`m about to embark on the biggest test of faith yet.I`m selling my house and going back to renting,Im selling my Porsche and the funds are all going into buying more DIL.


Roadrunner congratulations on your success with DIL. But why having had such success do you feel the need to change your investing plan? Could I suggest to you that the reason is 'greed' in that on paper looking back you could have done better. However, I believe you are treating your DIL investment like some kind of preordained path. It is very easy to view it like that looking backwards. But I think if you look back to while you were on that path this preordained future that you missed out on was never that clear.

Have you consider the other future when Boardbooks was trumped by an android application for Samsung, as the fashion for iPad faded? Or the future where the Apple iWatch made the iPad interface irrelevant, sinking Boardbooks? Of course neither of these futures happened. But, and here is the point, while you were walking the DIL investment path you could not be sure that those alternative outcomes would not pan out.

Thus I would argue your actual behaviour of taking risk off the table by taking some profits was the sensible one. Buying and holding a share like this only automatically means success with hindsight.



Idiot or genius only time will tell

Nope. By failing to consider alternative outcomes you are an idiot, no matter what happens. If you do become rich by your plan, and there are rich idiots out there, you will not have understood the risks you took to get there. Because of this you will have no chance of holding onto your fortune because you will blow it all on your next trade.

Sorry to be so blunt, but better to learn this lesson before you lose your money.


SNOOPY

[Theracay]

Blue horseshoe loves Diligent Boardbooks.

[ddrone]

Without going to charts etc, DIL bounced back big time last week from a close around $5.30 to a peak around $6.20. Presumable this was on analyst commentary but what are the "odds" (I sound like a gambler..) of that happening again at these levels. Was that merely a pattern based reaction of sorts or a rational but unsupported return to "reasonable" levels.

[False Profit]

I originally bought in at $7.00 and then again at $6.20 as I couldn't believe my luck and it couldn't possibly have dropped any further than that...ahem...this share has taught me, a newbie, the hard lessons to trading. But, unabated, I'm still buying on the dip and now wait for $5.05 where my next order is placed. It will recover long before it gets to this!!!!!

The company has not changed one iota from those $8 days so this is good buying!

Note - also have Heartland shares so everything is rosy :)

[Xerof]

KW, thanks for the back-up comments on this, it's a tough message to get across

[blakecb]

Well the good news for Roadrunner is that hopefully by the time the house has been marketed and a settlement date agreed on, Diligent has cleared up this mess, thereby taking some of the risk out of this game. I do think your decision is madness though, and the kind of thing horror stories are made of.

What I don't understand with you guys buying in at present is why not wait until the turnaround? Yes you will miss rock bottom, but you will still have time to get in before it really takes off and may save yourself the potential risk of losing your money. The reason people are buying in now is greed and optimism isn't it really, not wanting to miss out on a bargain and potential fortune. Why else wouldn't people simply wait and see, then buy in? Waiting for the day after the release of the quarterly and reviewed revenue figures from previous years is a much safer investment strategy.

All this talk of 'nothing changing' and 'being the same business' as it was at $8 is not accurate, because things have changed, as the competence of management is now in question. It's not some small error(s) as it is taking a world class outfit like Deloitte all this time to sort out.

[blakecb]

Beat you this time :)
:) By 2 mins! :)

You were more precise than me, my figure was a bit rough.

Consider me your apprentice!

[Balance]

I originally bought in at $7.00 and then again at $6.20 as I couldn't believe my luck and it couldn't possibly have dropped any further than that...ahem...this share has taught me, a newbie, the hard lessons to trading. But, unabated, I'm still buying on the dip and now wait for $5.05 where my next order is placed. It will recover long before it gets to this!!!!!

The company has not changed one iota from those $8 days so this is good buying!

Note - also have Heartland shares so everything is rosy :)

I am a holder of DIL so please read my comment in context.

You are making 2 assumptions :

1. DIL was fairly priced at $8.00 per share.

2. One thing that can change is that there has been further delays in restating DIL's accounts. This could be either positive or negative.

Not all is what it seems.

I think DIL is doing the right thing by delaying the accounts until everything is properly sorted out - you get one shot with these things.

Nevertheless, markets do not like uncertainties.

[CJ]

It's not common in NZ, because .auditors will never admit they made a mistake. Auditors and management are always willing to his it if they can.

Only if its obvious or a new audit firm has been appointed will their be a restatement.

I'll wait to see how big the adjustment is but my bet is the adjustment will be (and would have been) lost in the rounding considering their growth rate.

[Roadrunner]

but it sent me flowers and said sorry and that it would never do it again...

Haha!classic......good to have a laugh in these tough times :)

[winner69]

Just read this in an excerpt from a book by Dan Kahneman 'Thinking Fast and Slow'

Experienced radiologists who evaluate chest X-rays as 'normal' or 'abnormal' contradict themselves 20% of the time when they see the same picture on separate occasions. A study of 101 indepen*dent auditors who were asked to evaluate the reliability of internal corpo*rate audits revealed a similar degree of inconsistency

So how one accounts for revenue is open to intpretation .....and even the new auditors might have got it wrong

[Lorne Ranger]

Fair to remember that in times of uncertainly, many of those who bought or owned DIL shares even as recently as December will still be pleased with their investment even if they sell, given it still constitutes 100% profit. So those holding (like me) and those buying in must have a better long term opinion of the stock going forward. Cant blame others for cashing in. I do believe that once the accounts are sorted, and the reports are up to date, it will show good progress and fundamentals blah blah and it will slowly attract a new group of investors. So to say Diligent shareholdings are in transition is probably an understatement. As others have mentioned, patience will reap rewards. Thats my plan anyway. Kudos to the house seller, if you believe in something then go for it. Respect to those more cautious but each to their own I say.

[Roadrunner]

Thanks for all the support,advice and contructive criticism re my investment plans.I`m too long in the tooth to dismiss suggestions when they are fairly put but in the end the buck stops here and I make my own decisions and can blame no-one if I stuff up.I have been investing in shares for maybe 20 years or so and have had all sorts of types of stock over that time.I remember the crazy times in the UK with the tech boom/bubble and burst.I bought into established so called safe companies like Marconi and speculative gold companies and lost my shirt.I had success along the way and traded on Easdaq and the Footsie.Over here I had a few success' with Nuplex and Restaurant Brands and Fisher and Paykel,narrowly avoided Pike and had a disaster with New Image.I have tried diversifying and it is beyond doubt that this is a safer way to invest...but if you are fortunate/smart or crazy enough to have one share in your portfolio which is exceptional then you will probably do a lot better than if you had 5/10.I accept that the risks are higher,of course they are...but so are the rewards.We can look at Diligent before all this fiasco and say well what are the risks....security breach/competition/stock market crash whatever but who would have picked that these current issues would wipe heaps off of the share price.What I`m getting at is that there is risk everywhere and even some overseas banks will only guarantee your funds up to a certain amount.There are plenty of stocks here with heaps of potential PEB is one that I like and love or loathe it look what XRO has done for its followers.That said try and find a similar sized company to DIL with strong growth and profits,$40m in the bank,no serious competition,award-winning customer service,97% customer retention,a new product in the wings and a possible listing on the world biggest tech market.That is how I evaluate risk:)

[Theracay]

The reason people are buying in now is greed and optimism isn't it really, not wanting to miss out on a bargain and potential fortune.


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.

(Post is not intended to be taken too seriously)

[Xerof]

You've been watching too many Wall Street movies. Those guys lost all credibility, and effectively all investment banks in 2008/9, and still they seem to think their new intake of quant traders can rule the world. I see the London whale lads are in the dock overnight. Short memories haven't they.

ps I dont think RR will sell his house and porsche, he's filching the urine

[Roadrunner]

You've been watching too many Wall Street movies. Those guys lost all credibility, and effectively all investment banks in 2008/9, and still they seem to think their new intake of quant traders can rule the world. I see the London whale lads are in the dock overnight. Short memories haven't they.

ps I dont think RR will sell his house and porsche, he's filching the urine


Porsche 911 Carrera Coupe Trade Me listing number 615066055

Haven in Hokowhitu Trade Me property ID number DJH691

Going to try and sell the Porsche to Moosie lol:)

[Xerof]

Ha ha, fair enough, on my watchlist, and we'll all frontrun you :cool:

[The Rocket]

I was not going to say anything but....I have been buying and selling diligent since they were 47 cents. Road Runner and I work together and yes he is selling his car & House. Three years ago i took a mortgage on my home could not sell it have wife & 2 boys and invested in sharemarket I Lost 86,000K on New Image at the start and got it all back and plenty more on Dil. Since Dil dropped from 8 to 5.40 I have lost 200k of my portfolio I have just increased my mtge $100k and am buying Dil at this give away price. Roadrunner and i talk daily about the stock and outside of errors in their paper work they have not put a foot wrong, Have faith don't look at your bank accounts look at Dil not through your pockets. The company was worth 8 and was great now 5.40 and is a dog. Now is the time to buy if you can not see that it is time you all went to speck savers. I have one stock more to sell then all my shares will be in Dil and i sleep at night.....LOL:)

[lascar]

Porsche 911 Carrera Coupe Trade Me listing number 615066055

Haven in Hokowhitu Trade Me property ID number DJH691

Going to try and sell the Porsche to Moosie lol:)

Miss Palmy! IPC looks beautiful.

Good luck for your sales and investments!:t_up:

DISC: DIL holder and former Massey student.

[Xerof]

Rocket n runner, nobody has said it's a dog..... I'm poised ready to reenter, just waiting for the right moment

its been a 'bargain' for weeks, but the market keeps upping the discount......

[Wolf]

I'll be watching diligent hourly tomorrow. I'm going to flick on my PGW, FBU and MRP shares to get in, just a matter of when. Price jumps around on Fridays not sure if it will go back up a bit or continue to decrease. I might buy half soon before the announcement and then the other half after the announcement to be more on the safe side. Just trying to pick the best entry point don't want to miss out altogether if i wait to long also.

[Dej]

Almost seems like euphoria has set in ;)

[Hoop]

Almost seems like euphoria has set in ;)

Hmmm...It seems that way....very interesting...

[winner69]

Hmmm...It seems that way....very interesting...

50%pa growth, 97% retention rate, new products soon, pile of cash and Nasdaq soon.

Not euphoria Hoop ....real facts

Didn't even mention takeover target as well

Rod Duke has a bigger pile of cash

[blu3]

I see everyone quoting over and over again the "97% retention rate" argument.
It's potentially a very good point but I believe it would need further investigations: does the companies keep using Diligent Boardbooks because they are willing to or because they are constrained to?

In the industry I'm working in, the biggest companies in the world are pretty much all using the same software because they're stuck with it. The software is old, not intuitive, slow, and it hasn't evolved in a while when the industry requirements are skyrocketting. In other words, it is simply dying, slowly.

Companies are stuck with it simply because they've spent a tremendous amount of time and of money into developing tools and pipelines on top of this software. Better softwares exists on the market, but a change would mean ditching all those years worth of work and starting over from scratch.

Some companies are also building softwares in a certain way that forces their clients to convert their existing data or code into a proprietary format or language specified by the software itself and not compatible with the common standards, making it harder to switch onto another software.

Right now, things are moving a bit. New solutions are showing up on the market and offer to fill in the gaps of this dying software that no one wants anymore while making the transition very smooth. Time will tell, but this is more likely going to kill it for good.

I'm hopeful that it is not what's happening with DIL, at least right now - their product looks great, modern enough, and hopefully they invest enough money into improving it to remain cutting edge. But things are moving really fast in this kind of industry, so the question is: do we actually know anything about why companies stay with Diligent?

[blu3]

Sweet, thanks Sparky!

[winner69]

blu3 - YELLOW CARD for being negative on DIL

Do it again and a RED CARD

You get people angry with this behaviour

Agree with what you are saying though. We bought this software ..went throu the pain of teaching the fuddy duddy directors how to use it .....never again so we stick with it ,,,,,just like that zillion dollar investment in SAP

[blu3]

Haha, sorry if you took it this way, it definitely wasn't the intention and was a genuine question after seeing that argument coming back every time and after comparing this with my own experience in softwares.
I just wanted to know, that's all.

As a proof of my good intentions, DIL represents more than 30% of my portfolio. I bought it at an average price of $6.21, meaning it's currently showing a vivid down arrow next to the "-13.9%" label.
Despite of that, I'm still very optimistic about this stock. So optimistic that I even bought some recently at $5.60 and wished I had some cash remaining to buy some more now... GO GO DIL!


PS: since my first post on PEB's thread and now this one, I somehow have the feeling that I'm not so welcomed to ask questions on this forum, I think I'll just go back to my lurking mode and let the pros do the talk :)

[winner69]

PS: since my first post on PEB's thread and now this one, I somehow have the feeling that I'm not so welcomed to ask questions on this forum, I think I'll just go back to my lurking mode and let the pros do the talk :)

No no blu

All views are welcome, even if insights challenge the prevailing views. It brings balance to the discussion.

If you don't get many yellow cards you have failed yourself

Didn't you notice I whole heartedly agreed with your insight, I thought it very relevant

[Dej]

No no blu

All views are welcome, even if insights challenge the prevailing views. It brings balance to the discussion.

If you don't get many yellow cards you have failed yourself

Didn't you notice I whole heartedly agreed with your insight, I thought it very relevant

I agree with winner, sometimes we need different perspectives to be able to constructively criticize what we believe in, and to check its validity ourselves.

I want to see more than 5 posts from you :p

[winner69]

I am a holder of DIL so please read my comment in context.

You are making 2 assumptions :

1. DIL was fairly priced at $8.00 per share.

2. One thing that can change is that there has been further delays in restating DIL's accounts. This could be either positive or negative.

Not all is what it seems.

I think DIL is doing the right thing by delaying the accounts until everything is properly sorted out - you get one shot with these things.

Nevertheless, markets do not like uncertainties.

Balance .... I take it that 1. above is sort of a question?

No doubt that is the assumption when people say that $8 is 'market' value and nothing has changed since.

I would contend that $8 was a result of a bit of exuberance and a blip on temporary spike on the chart .... and that 'market' value at the mo is more like $6 based on long term uptrend

[blu3]

Haha ok then, thanks!... it's just that despite of the countless number of football games I played, I've never received any yellow card before!
(always straight to red)

[winner69]

Hope DIL marches to its own beat today ... esp after wahts happened in the US markets overnight

[winner69]

So ACC bought those shares the other day ....what a good sign that is! Hope they weren't buyer of lady resort for some other panicking manager?

Only disclosed the 285thou ....wonder what the average for the other 800 thou odd they have bought since June

[Wolf]

What happened in the us markets and what is its effects?

[Xerof]

Just the usual.... Good economic outlook fuels concern that Fed will taper stimulus.

[blakecb]

So ACC bought those shares the other day ....what a good sign that is! Hope they weren't buyer of lady resort for some other panicking manager?

Only disclosed the 285thou ....wonder what the average for the other 800 thou odd they have bought since June

I wonder if that explains the volume spike in buying on July 17? I had wondered if some smart money was buying in at that point, but not sure I would necessarily call ACC smart money! (Pumpkin Patch anyone?) :) Still... possibly a good sign for holders...I guess time will tell.

[blackcap]

I wonder if that explains the volume spike in buying on July 17? I had wondered if some smart money was buying in at that point, but not sure I would necessarily call ACC smart money! (Pumpkin Patch anyone?) :) Still... possibly a good sign for holders...I guess time will tell.

I would never call ACC smart money! I knew a dealer once, one of his clients was ACC. They just went on punts so now and then. Not really any analysis or anything. Things may have changed but when I see ACC buying it does not engender any positive feelings. ACC receives a lot of money and it has to go somewhere... where better than NZ (lets be patriotic) shares. No more to it.

[winner69]

Good employment numbers = more signs FED will taper QE = people bailing out of equity markets b/c they think the run is over! (my take anyway). Pretty ridiculas that good economic news = significant equity market decline, but that's how it is!

Just another reminder that QE was one big con eh

Walmart not too optimistic about next year and cut earnings guidance and Cisco going to cut 5% of workforce rconomy must be on a roll

[Mista_Trix]

...PS: since my first post on PEB's thread and now this one, I somehow have the feeling that I'm not so welcomed to ask questions on this forum, I think I'll just go back to my lurking mode and let the pros do the talk :)

Having joined recently myself, I thinks its important to remember most of the guys (and gals) on here have wickedly dry senses of humor, and that's always hard to pick up in text :-S

Questions are fine, just try and do some research first, I've found its the ignorant questions people ask that get moaned about. If you've tried to answer the problem yourself, or have clearly taken a pretty informed stab at asking why, then everyone on here is more than willing to help/comment.

...then on the other side of that, it's always hard to speak out against group-think.
(DISC: Hold DIL)

[goldfish]

Ill speak out against group think, I think some of you are crazy looking at selling everything and putting it into DIL. Just because they have been at a certain price before no way means it will be even near there again. We have been in a downward trend for a while now hoop has pointed it out lots but seems to get ignored. What if there new products suck, or they dont list on nasdaq or a better boardbook comes along, or there accounting issues dont go away, so many variables itll only take one for the downward trend to stay there.
A bit of caution is needed I think.
Disclaimer:sold out of dil as the downtrend was obvious, but will get back in if the situation changes.

[Mista_Trix]

the US market is a whooooole different kettle of fush to NZ and OZ! let them sell their stocks on true goid news rather than stimulus, NZ is going fron strength to strength.

in the mean time, anyone seen MKTO recently? nearly $40 a share on huge revenue growth amd speculation of a takeover. go figure...

A different kettle of fish is an interesting call. The NZX is getting punished by the international negative sentiment, and then sees none or very few of the positive news on the good days. Our market is far more pessimistic than the US and it seems to be more realistic about an ultimate turnaround point.

So yes the US market is different, but there also may be more steam in it than ours because ultimately its more of a 'take a chance and see' type market, ours is a bit 'is it happening, is it not, god I'm nervous, I might sell down just to be sure'.

[lastmoa]

Haha, sorry if you took it this way, it definitely wasn't the intention and was a genuine question after seeing that argument coming back every time and after comparing this with my own experience in softwares.
I just wanted to know, that's all.

As a proof of my good intentions, DIL represents more than 30% of my portfolio. I bought it at an average price of $6.21, meaning it's currently showing a vivid down arrow next to the "-13.9%" label.
Despite of that, I'm still very optimistic about this stock. So optimistic that I even bought some recently at $5.60 and wished I had some cash remaining to buy some more now... GO GO DIL!


PS: since my first post on PEB's thread and now this one, I somehow have the feeling that I'm not so welcomed to ask questions on this forum, I think I'll just go back to my lurking mode and let the pros do the talk :)

You are most welcome to question DIL as long as it is constructive and not just a generic statement. So your questioning is fine. This is not a 'cheerleading' thread (or I hope it does not come across as such).
Positive or negative - all good. Just some posters and negative without substantiating their statement.
Disc - holder of DIL and bullish.

[CJ]

Ill speak out against group think, I think some of you are crazy looking at selling everything and putting it into DIL. i agree. Putting everything in goes against pretty much every investment philosophy, with the exception of gambling.

Disc: hold. Largest holding in a well diversified portfolio.

[Hoop]

So ACC bought those shares the other day ....what a good sign that is! Hope they weren't buyer of lady resort for some other panicking manager?

Only disclosed the 285thou ....wonder what the average for the other 800 thou odd they have bought since June

I see they are using the averaging down strategy AGAIN!!!...they don't learn do they.......Similar to all their averaged down mistimed buys into PPl ..millions of $$$ underwater...What on earth is wrong in waiting for buy signals before entering.....you may missed a bit of that bottoming opportunity but so what?? ..... the greedy precise "look how good I am at fundamental investing" strategy and I have to pay higher ACC levies to keep their egos intact:p.

[Hoop]

i agree. Putting everything in goes against pretty much every investment philosophy, with the exception of gambling.

Disc: hold. Largest holding in a well diversified portfolio.
Agree too with goldfish.....And when there is tears the press blames the Share Market as another form of gambling outlet and rallies people to beleive that..creating a worse image for the NZX.

[blakecb]

I would never call ACC smart money! I knew a dealer once, one of his clients was ACC. They just went on punts so now and then. Not really any analysis or anything. Things may have changed but when I see ACC buying it does not engender any positive feelings. ACC receives a lot of money and it has to go somewhere... where better than NZ (lets be patriotic) shares. No more to it.

Yeah well that is a pain because they throw out my theory of following smart money, typically being larger volumes that you wouldn't ordinarily see (either up or down). For example, with DIL, I wondered if 5.50 might be the bottom the way someone had so strongly bought in - turns out that was probably just ACC throwing away tax payer money. With ACC having a lot of dumb money to invest one cannot now be certain!