ETC - Telco/Mobile Technology

[Footsie]

This stock appears remarkably cheap.
Currently already in profit they have a forecast NPAT of $48m for Fy09. confirmed recently.
up from $11m in Fy08 p/e of 2

Coy has no debt and its main business is government security contracts in malaysia.
emtcorp.com.au for more info
Also recent investor preso available on stockness

Stock has been trending down from a high of around 50c in Sept 08 to its current 21c

Phaedrus can you offer an unemotional, objective TA view.
It has recently had a massive jump in OBV, my main question is that is it too early to be buying, as an uptrend hasn't been established yet. Although one could buy now and use the recent low (19c) as a stop.
I like this coy a lot so want an unbaised view.

Thanks
FTSE

[The Big Ease]

far out.
very interesting and ambitious.
quadrupling their NPAT from one half to the other willbe met with scepticism in any market, let alone the current conditions.

at the current run rate, they are trading at 4-5 times full year earnings.
the presentation didnt have anything to support their claims of revenue, contract and regional diversification, though they did outline their pipeline of works. it would have been good if they presented that in some charts by revenue.

[Phaedrus]

Is it too early to be buying as an uptrend hasn't been established yet. Although one could buy now and use the recent low (19c) as a stop.
The attached chart shows 6 indicators that have worked well in the past. All have given recent BUY signals. While it is true that there is no confirmed uptrend yet, these 6 signals give a very strong buying indication, so I do not believe that it is too soon to act. (It would take a Close of above 24.5 cents to confirm the new uptrend). Your proposed use of 19 cents as a stoploss makes good sense - though of course a lot of other people will be using it as well!

It really WAS too early to buy on the trendline break, though. Most everybody would have ignored that "buy" signal for 3 reasons :-
(1) The trendline was broken by the price merely crabbing sideways, rather than rising.
(2) The trendline break was made on miniscule volume.
(3) There was NO confirmation from any other indicators.

Technically, ETC looks good right now. Why do you like this company, Footsie?

http://h1.ripway.com/78963/ETC331.gif

[Footsie]

Phaedrus
I cant see that chart for some reason. Can you try again please?


FA reasons to buy
1) Coy has no debt
2) Mgmt have proven they can grow NPAT over the past 12 months
3) Despite being in Asia, govt contracts are low risk. ETC has worked well with the malaysian govt in the past - so no reason to doubt this new contract wont be just as lucrative.
4) Price has been butchered due to bear market and large seller so currently on a fwd p/e of 2x. V cheap by anyone's standards.
5) Contracts are high margin as its really the patent that has the value. Also contracts are long-term hence revenue rolls fwd
6) Coy is tendering for new Contracts so potential to grow further
7) Coy has been able to raise funds from shareholders over the past year (at much higher prices) to grow the business. So the core shareholding obviously supports the future direction.

Risks
1) delay in start of Chinese/malay contact and therefore miss 48m NPAT target
2) Seller pushes the price to new lows, but eventually they will run out of Ammo and if the story keeps developing then this is largely mitigated
3) FX risk. Earnings are in USD and Malaysian Ringit.
4) additional working capital requirement in the next 3 months which means they might require so debt funding.

[The Big Ease]

footsie, my understanding is 48m NPAT for year ending July 2009
so they would already know if they are going to hit that mark with a great degree of confidence.

so why would QIC be selling so close to an important milestone. they continue to hold 5%, but why would they sell down?

i havent taken a look into their books yet, but why would they need to resort to debt is they were profitable last half, have very high margins and will book 48m profit for the full year? that seems strange to me. unless they havent received the money yet?! hmmm

i have read a few announcements and some of the numbers are huge ie 200m over 5 years with china etc.

its got me interested, but it doesnt make sense.

[Footsie]

ta

Big ease
1) 09 NPAT yes I know its only 3 months to go
2) Why is QIC selling. I've been told a new fund manager has come in and is purging the entire QIC p/f. Who knows the real reason? But dont think QIC are experts. These so called "sophisticated investors" underperform the market year in year out.
3) they may require some working capital funding from the bank before the contact cash comes in the door. Wont be much though I Dont think.

[Phaedrus]

There is something strange going on, Footsie. It all depends on the browser you are using! The chart is there with IE and Firefox, but with Opera, you need to be logged on to see it! Are you using Opera? Google Chrome is not working either. Vot gifs?

[I cleared my Internet cache and everything returned to normal. ??????
I suggest you do the same!]

[Jay]

There is something strange going on, Footsie. It all depends on the browser you are using! The chart is there with IE and Firefox, but with Opera, you need to be logged on to see it! Are you using Opera? Google Chrome is not working either. Vot gifs?

[I cleared my Internet cache and everything returned to normal. ??????
I suggest you do the same!]


Can't see it either and I am on IE (6!!) at work - could be something funny there (usually can see them though) - hey I am about to finish now and go home anyway!

[The Big Ease]

firefox and i can see it :)

thanks footsie.

btw, you work in the equities business right? do you have any discl. to make regarding this stock? no offence intended :)

[steve fleming]

I've looked at this company very closely over the last couple of weeks and still can't work out if it is amazingly undervalued or just plain dodgy.

A couple of things concern me:

1.Why would ETC lend $5.7m to their Chinese project/customer in December (when ETC was running short of cash)?

2.Neither versions of the CF statement released for HY09 reconcile to what actually happened in HYO9 (in terms of cash raised/ acquistions made).

3.How is it that operating costs ($2.5m for HY09) really can be so low for a business the size of Nexbis?

[Footsie]

Big ease

I trade full time for myself... if thats what you mean.

Steve, yes there are a few question marks. I think that's why the company is so cheap.

I've bought a few but For me i've decided to wait for confirmation that things really stack up under FA and TA

and if that means I have to pay 30c... well so be it.

If one thing i've learnt from this bear market. Trust no one unless they can earn that trust and if something is cheap, its probably for a reason.

[The Big Ease]

cheers footsie. i thought you might have worked for a broker or something.

well just finished reading their announcements.
consistent profit growth over the last few halves....quite impressive.

nice couple of contracts and apparently have agreed to fixed quarterly invoicing with the chinese regarding the 200m contract.
they raised an invoice for the quarter ending dec, so i dont understand why they require debt for working capital. unless there are payment issues there.

i didnt come across anything regarding a 5m loan to a customer. could somebody point me in the right direction?
at this stage of the year, they should know what their full year profit will be...but they havent reiterated their 48m profit forecast in the announcement this morning.

[Footsie]

from a TA perspective, today confirms what I was looking for. Another big up day on massive volume.
I have now 75% of want I want to own.
Still waiting for the last piece of the puzzle from an FA perspective (ie confirmation of earnings in the tin)
then i'll wrap up the rest.

[Phaedrus]

See how Footsie effortlessly combines FA and TA?

Some people claim it is impossible!!!!!!!

[Footsie]

I think this is a great example of how the forum works well.
Everyone contributes and we help each other.

[The Big Ease]

See how Footsie effortlessly combines FA and TA?

Some people claim it is impossible!!!!!!!
i used to think it was mumbo jumbo.
but there are clearly high correlations for some stocks and lead indicators.

i used to find a good story, then sit and wait with a holding. the fear was of missing out on that BIG announcement.
not anymore. if its going to happen, then more often than not it will show up before hand. on the few occasions i miss out, so be it.

EDIT: i forgot to add, could we get a chart from you Mr P?

oh yeah, why havent they reiterated their earnings projection of 48m? its strange releasing a business update and omitting this when they had taken every previous opportunity to do so.

[Phaedrus]

Big Ease, you probably don't need me to point this out, but what we have had here so far is a blow by blow replay of what happened with ETC 10 months ago. We have the same indicators firing in the same order, the same "late" confirmation of the uptrend, the same volume spikes, etc. The only significant difference is that while the trendline break was first to fire in both cases, the May one was confirmed while the February one was not.

http://h1.ripway.com/78963/ETC42.gif

Here we have 6 proven indicators all firing in synch - but who needs fancy TA? So long as you have colour-coded volume bars (green for Up days, red for Down) the whole story is right there, in the dotted ellipses.

[The Big Ease]

I think this is a great example of how the forum works well.
Everyone contributes and we help each other.

which is why i joined this forum to begin with....you get some great posts and insights... not to mention some potential gems like this that you probably never would have come across.

ill be watching to see how it opens this morning....even if it merely increased earnings on the current run rate, this is good value. anything more than that will be super.

[The Big Ease]

just managed to snare some at 28 cents.
more than i wouldve liked, but i get the impression its on its way now.
it could go anywhere.

nice chart Mr P. thanks again.

[Footsie]

Well done to all who bought.

I haven't seen a move like this since bull market days.

Some very hungry buyers out there.

[Lizard]

I've looked at this company very closely over the last couple of weeks and still can't work out if it is amazingly undervalued or just plain dodgy.

A couple of things concern me:

1.Why would ETC lend $5.7m to their Chinese project/customer in December (when ETC was running short of cash)?

2.Neither versions of the CF statement released for HY09 reconcile to what actually happened in HYO9 (in terms of cash raised/ acquistions made).

3.How is it that operating costs ($2.5m for HY09) really can be so low for a business the size of Nexbis?

Definitely bleeps on the "looks too good to be true" radar.

While trading this (and there seems no reason not to), it would seem worth staying cynical. There's been some great trash-trading stories in ASX-listed security companies involving Asian or Middle Eastern contracts over the past few years (think BQT/FCS, ZYL, QTK and, of course, SEN). For that reason alone, I think it requires picking over with a fine tooth comb before risking a hold through any results announcement.

For a start, what is the probability of a couple of bright sparks taking $3m (the original value of share capital in nexbis), a bright idea and their government contacts to form a business worth $60m? And then what is the probability that within just 18 months, this business can be generating $48m/annum in NPAT with minimal additional capital required (other than to pay to the original bright sparks)? Legitimately.

With money like that to be made, where are the competition? While a patent application (http://www.faqs.org/patents/app/20080203148) has been filed, I find it hard to see "novel". (Application no. 12/026,828 if you want to check status on USPTO (http://portal.uspto.gov/external/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4gPMATJgFieAfqRqC LGpugijnABX4_83FT9IKBEpDlQxNDCRz8qJzU9MblSP1jfWz9A vyA3NDSi3NsRAHxEBJg!/delta/base64xml/L0lJSk03dWlDU1lKSi9vQXd3QUFNWWdBQ0VJUWhDRUVJaEZLQS EvNEZHZ2RZbktKMEZSb1hmckNIZGgvN18wXzE4TC8xMC9zYS5n ZXRCaWI!?selectedTab=fileHistorytab&isSubmitted=isSubmitted&dosnum=90007247&public_selectedSearchOption=#7_0_18L)). 2D barcode identity recognised by mobile phone camera? That alone is not novel (ref. http://en.wikipedia.org/wiki/Barcode). The patent application focusses on securely sending and retrieving data via mobile, but I struggle to see how this could be more novel than logging into a wireless network and checking my e-mail? Hopefully someone can point out what I've missed. If the patent is really this valuable, then surely it won't be awarded lightly (read cheaply).

So far, like Steve, I've only found minor oddities in the accounts. However, it sometimes takes a few reporting seasons to understand what is going on within a business. At this stage, that makes perfect "blue-sky trading" with valuations only limited by the power of imagination. But would seem best to stick with TA and a ruthless mindset until ETC manages to prove it really is the next 3M.

[Damo79]

Take care guys. I thought I remembered this company name:

http://sharetrader.co.nz/showthread.php?t=1664&highlight=entertainment&page=6

And the same guy, Peter Dikes (with a 'y', but ST doesn't like that word) that ran in into the ground before is still on board. It was very dodgy then, with a lot of spruiking and a lot of failures to meet expectations. Looks too good to be true just now, so probably is. Make sure you check how much of there net assets are intangible...

[steve fleming]

Definitely bleeps on the "looks too good to be true" radar.

While trading this (and there seems no reason not to), it would seem worth staying cynical. There's been some great trash-trading stories in ASX-listed security companies involving Asian or Middle Eastern contracts over the past few years (think BQT/FCS, ZYL, QTK and, of course, SEN). For that reason alone, I think it requires picking over with a fine tooth comb before risking a hold through any results announcement.

For a start, what is the probability of a couple of bright sparks taking $3m (the original value of share capital in nexbis), a bright idea and their government contacts to form a business worth $60m? And then what is the probability that within just 18 months, this business can be generating $48m/annum in NPAT with minimal additional capital required (other than to pay to the original bright sparks)? Legitimately.

With money like that to be made, where are the competition? While a patent application (http://www.faqs.org/patents/app/20080203148) has been filed, I find it hard to see "novel". (Application no. 12/026,828 if you want to check status on USPTO (http://portal.uspto.gov/external/portal/%21ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4gPMATJgFieAfqRqC LGpugijnABX4_83FT9IKBEpDlQxNDCRz8qJzU9MblSP1jfWz9A vyA3NDSi3NsRAHxEBJg%21/delta/base64xml/L0lJSk03dWlDU1lKSi9vQXd3QUFNWWdBQ0VJUWhDRUVJaEZLQS EvNEZHZ2RZbktKMEZSb1hmckNIZGgvN18wXzE4TC8xMC9zYS5n ZXRCaWI%21?selectedTab=fileHistorytab&isSubmitted=isSubmitted&dosnum=90007247&public_selectedSearchOption=#7_0_18L)). 2D barcode identity recognised by mobile phone camera? That alone is not novel (ref. http://en.wikipedia.org/wiki/Barcode). The patent application focusses on securely sending and retrieving data via mobile, but I struggle to see how this could be more novel than logging into a wireless network and checking my e-mail? Hopefully someone can point out what I've missed. If the patent is really this valuable, then surely it won't be awarded lightly (read cheaply).

So far, like Steve, I've only found minor oddities in the accounts. However, it sometimes takes a few reporting seasons to understand what is going on within a business. At this stage, that makes perfect "blue-sky trading" with valuations only limited by the power of imagination. But would seem best to stick with TA and a ruthless mindset until ETC manages to prove it really is the next 3M.

It would be great if companies released cash flow forecasts rather than profit forecasts.

That would be far more relevant here. Its all very well putting through some large invoices at month end (as ETC did in December) to ensure they hit their market guidance but getting paid for it is another story altogethor.

At the moment ETC appears to be PAYING its customers rather than the other way round.

Still, if ETC is able to generate operating cash of say $35m from their profit of $48m the market would really take notice. It would be fascinating to see what ETC does with it. Given ETC doesn't pay tax then dividends may be a problem.

Its also probably not worth forgetting the origins of ETC prior to it coming out of receivership/administration - it was controlled by Vaz Hovanessian and his mates who has had more failures than most in the markets in recent years (SRA, BRO, FAS, NTG, ECE.....)

[The Big Ease]

almost all of their assets are intangible.
yeah interesting.....but you would expect that from an softward type business.

i just finished reading that previous thread.
sounds like the company is in a completely different field altogether.

[Footsie]

Agree it's a little bit grey in a few areas, but thats why its cheap.
If it was black and white we wouldnt have just made 50% in 2 days.

I'm staying in until TA tells me to get out. To do otherwise would be to make a mockery of TA.

Think of it like being the opposite of someone who falls in love with a stock and keeps buying in a downtrend.

Selling out of a stock in an uptrend because you are sceptical on the company flys in the face of TA.

Phaedrus could probably do one of his charts in reverse....
eg 21c... Sharetraders criticise ETC management...
32c.... sharetraders remain sceptical..... take profits.
40c?....

[Lizard]

It would be great if companies released cash flow forecasts rather than profit forecasts.

The continuous disclosure regime adheres to the same rigorous standards of data selection as an internet dating site.

AA, thanks for the kind words. Will try and find a few minutes to look at MDT later - the answer possibly not simple, so might PM.

Footsie, I don't see anyone suggesting you sell out. A great trade for you so far and probably more in it. I'm certain you're experienced enough not to get caught holding the parcel when the music stops. For a happy conclusion, all that seems necessary is to choose your TA indicators in the spirit of distrust.

[The Big Ease]

spot on footsie.
why not hold on if it looks like continuing its charmed run?
like i posted a few times, even if it continues its more "modest" rate of profit growth, then this is still a bargain at a market cap of 6 times potentially 18 mill profit.


btw, Michelle Obama's cavalcade went right past my front door today. such a buzz.

[The Big Ease]

still pushing up...34cents.
i have been doing some googling.
it looks like the malaysian government is pushing this company and giving it some vocal support.

bodes well for further applications and casflow too.

[Footsie]

couldnt help myself. bought a few more

[The Big Ease]

yeah ive got to stop thinking about this company.

48M NPAT
if they hit that, what is a reasonable PE?
id say 10 minimum
20 is reasonable and perhaps in a better market it might even be 30 for such a growth trajectory, considering the 48M doesnt include the signed chinese deal for 40M per annum.

so in 3 month's time, this could have a market cap of 480m, 960m or 1.44b.
current market cap is 138m.

[Damo79]

yeah ive got to stop thinking about this company.

48M NPAT
if they hit that, what is a reasonable PE?
id say 10 minimum
20 is reasonable and perhaps in a better market it might even be 30 for such a growth trajectory, considering the 48M doesnt include the signed chinese deal for 40M per annum.

so in 3 month's time, this could have a market cap of 480m, 960m or 1.44b.
current market cap is 138m.

I hate to be a party pooper, but I saw that and remembered quite a few similar calculations I've done with companies in the past (the old ETC, IMI, ADY, SEN to name a few). Forward profit estimates for each of those companies always convinced me they would just HAVE to be 10 baggers on any kind of sensible PE. But in each case they turned into massive let downs in the end. That said, ADY was my biggest trading success ever, but more due to luck than anything.

I think I'm saying good luck, I hope you make a fortune, but don't be afraid to get out quickly with some profits at the first sign that somethings just not right :)

Cheers
Damo

[The Big Ease]

i know what you are saying damo.
i put a small wager on ARR and a packet on HTI.
both were oh so close to delivering. ARR actually got the business and the indians refused to pay, despite being happy with the work delivered. careful doing business there. ARR is barely alive.

HTI - huge contracts, great tech, directors buying big and then the credit crunch hits. business pipeline stalls. still has plenty of cash for 8-9 months so lets see what comes of it.

in both cases, they were not yet profitable or cashflow positive.
what gives me confidence is that ETC is both at the moment and is trading on reasonable PE of current earnings, let alone projected earnings of 48m.

the malaysian government being a big supporter and a major customer bodes well too imo, but i could be reading too much into that.

there are some question marks and as footsie wrote, ,if it was clear cut it wouldnt be so cheap. thanks for your well wishes and appreciate you bringing up the previous thread too. good background, eyes open for me.

[Footsie]

A company with a small number of large chunky contracts is never going to be on a p/e of 20x as they could drop a contract and would be stuffed at any time.

IN another life, I recall when I was a banker and we looked after this great business who had a massive contract with a big supermarket. Then one day the supermarket didnt like them anymore. Contract was dropped and because it was such a big % of their biz they were broke in 3 months.


Anyway, I think in this market a respectable p/e for a company such as this if they can achieve the numbers might be 7x
Therefore 48m price = 77c
However for 2010 once the contracts are fully operational for 12 months
NPAT could be say 80m in which case = 1.30

That's still a 5 bagger if you bought in the 20's

But dont get complacent. Its still a bear. respect the charts.

[The Big Ease]

china
malaysia
thailand
vietnam

and thats just from the FY09. but its not just on the current earnings. the china deal isnt even factored into the FY09 profit forecast. that has the potential to add another 10-20m to the bottom line for 5 years. you are already getting ~15m profit from the other parts of the business at the current run rate (mobile/consulting services)

also government contracts for the supply of solutions tend to be more sticky than service based contracts in the private sector. as long as you deliver the benefits, they would prefer to stay with the incumbent.

they have to deliver first.
in march last year they gave a profit upgrade for the FY08 and then beat it.
they have already re-iterated FY09 forecast of 48m in march, so let's see if they deliver.

this is a leap into the big league for ETC. if they can deliver this result, it will be a very long uptrend or possible takeover. management/directors have a history of growing and offloading businesses.

international security solutions is big business. the bigger companies wont sit around waiting for someone to outpace them.

its just my opinion. i wouldnt consider myself an informed watcher of this industry.

edit: the charts are saying it could go either way today. slow stochastic is about to crossover, but macd RSI and OBV are all holding. the SS has been a pretty good indicator when it has crossed over from these levels, but ill wait and see.

[Footsie]

just come out that the Directors bought a bunch of stock at 22c last week....

me thinks that a pretty good indicator of things to come.

[The Big Ease]

big day...18% up on opening, 4.3m volume for the day.
very nice.
this one has a way to go....
anyone else still holding?

[Footsie]

i'm still holding of course.

has proved to be a real winner

[The Big Ease]

another nice day with big volume.
strong buying in the last hour too.

this one looks like it has a long way to go just yet.

[The Big Ease]

it has held up reasonably well considering the downforces in the general market and how hard this stock had run in the last 30 days. second lowest volume day for 30 days and still there were buyers at 38 cents. not too many people in a hurry to lock in profits, good sign.

looks like it is right on the trend line at the moment. all other indicators are holding up reasonably well with only the Slow stoch indicating a sharp downturn but the fast stoch indicating a turn for the better. i have no idea what either of them mean!

can we get a hand from our resident chartists?

[Phaedrus]

The steep ETC uptrend is starting to lose momentum and this is reflected in the fact that some sell signals are starting to appear. As is often the case, the OBV (a leading indicator) was first to fire. You can see that interest is decreasing by the steadily falling volumes. On 20/4 the OBV trendline was broken giving an exit at 38 cents. Yesterday brought a break of the (unconfirmed) trendline and a break below previous support giving an exit at 37.5 cents. Not all indicators have triggered sell signals though, and a short-term moving average has yet to be broken and the trailing stop has not been hit. A good way to handle a trade when you are running multiple indicators is to buy/sell incrementally if when and as each indicator triggers. You step into and out of your position progressively over a number of transactions.

http://h1.ripway.com/78963/ETC422.gif

Too complex? Too many indicators? Don't like the "spread" of signals over a period of time? Find the "Sell" / "Hold" mixture uncomfortable? Can't stand the indecision? Want to be in or out and not shag around with partial positions?
Consider this. Weekly candlesticks work very well and I have recommended their use to many people. Take a look at this chart and answer the following questions :-

(1) (a) Would you have bought ETC?
(b) When?
(c) At about what price?
(d) Why?
(2) (a) Would you have sold ETC?
(b) When?
(c) At about what price?
(d) Why?
(3) What percentage profit would you have made?

http://h1.ripway.com/78963/ETC422wcs.gif

[Footsie]

I have two accounts that i run... I shorter one and a longer term one.

On the short term One. I sold my etc at 39.5

on the longer term one, i'm still holding as I think that this is merely the early stages of a big run. Given the FA potential I think its worth giving this stock some room to breath. if they pull off the profit levels discussed it has the potential to be a $1.00 stock later this year.
I'm deep in profit from an average in around 23c. so no issues there.

i'd jump back in on a short term basis when/if it looks right.

I recall one of my best long term trades ABA.nz... buying at 1.25..... I could have sold many a time, but the FA was so good i just gave it plenty of room

[The Big Ease]

I have two accounts that i run... I shorter one and a longer term one.

On the short term One. I sold my etc at 39.5

on the longer term one, i'm still holding as I think that this is merely the early stages of a big run. Given the FA potential I think its worth giving this stock some room to breath. if they pull off the profit levels discussed it has the potential to be a $1.00 stock later this year.
I'm deep in profit from an average in around 23c. so no issues there.

i'd jump back in on a short term basis when/if it looks right.

I recall one of my best long term trades ABA.nz... buying at 1.25..... I could have sold many a time, but the FA was so good i just gave it plenty of room

which is why i still hold even though i agree there is some technical weakness. i am finding the fundamental value overwhelming the decision making, which i am OK with. I dont yet consider ETC over valued by any stretch, so i am not looking for an exit yet. if it continues to 34 cents, i will reconsider that

[Footsie]

bought back in on my short term stuff @ 33.5 today.

[The Big Ease]

perfect timing.
still holding. looking forward to the profit confirmation.

[Footsie]

ABN Morgans initiate coverage

DCF of 1.03 and t/p of 71c

"ETC has several significant contracts underway and more in the pipeline. We expect significant upside when milestones are achieved and we initiate coverage with a BUY recommendation"

[The Big Ease]

ABN Morgans initiate coverage

DCF of 1.03 and t/p of 71c

"ETC has several significant contracts underway and more in the pipeline. We expect significant upside when milestones are achieved and we initiate coverage with a BUY recommendation"

thats assuming current earnings guidance only or weighted pipeline conversion?

[Footsie]

Happy days

Phaedrus would love the jump in VOL on price rise today

[The Big Ease]

Very nice footsie.
Thanks again for bringing it to my attention

[The Big Ease]

get on it guys.
Profit reiteration of 48m on the back of the Chinese deal.

[Footsie]

fundamentally

no reason not to hold this one now.

should move to a realistic valuation of say 7-8x??? EPS

7x 11c = 77c
8x 11c = 88c

i'd expect it to bust old highs over the coming weeks/months.

[The Big Ease]

Footsie,

thanks again for bringing this stock up. Just a great story unfolding here.

IMO your PE estimates are too conservative. I understand your reasoning, but the market has already demonstrated it is willing to give this company a higher PE. For much of the year it has traded on a historical PE of 10-15. With a FY10 projection of 100m, this company could easily trade on a historical PE of FY09 @ 12-14.

Telling the market you are going to triple your profit will always be met with scepticism, so I don't think their FY09 earning had much weight on the price until very recently and IMO still isn't reflected in the shareprice.

[Corporate]

Hey guys, looks like most of you are doing very well out of ETC. Can someone explain what these guys actually do? In simple terms, what is there competitive advantage? I can't get onto their website at the moment for some reason.

Cheers

[The Big Ease]

the main game is document verification.
They have the technology to produce a "level 3 security" barcode type thing that is scanned by something as simple as a mobile phone using their software application.
This can be applied to anything from passports to gas tanks (to ensure the gas tanks have been produced by licensed manufacturers who meet the safety regulations etc)

The product suite seems to be winning awards everywhere it goes and complies with the US homeland security specs.

Massive contracts in the pipeline. Take a look at the hotcopper thread for more info.

[Corporate]

the main game is document verification.
They have the technology to produce a "level 3 security" barcode type thing that is scanned by something as simple as a mobile phone using their software application.
This can be applied to anything from passports to gas tanks (to ensure the gas tanks have been produced by licensed manufacturers who meet the safety regulations etc)

The product suite seems to be winning awards everywhere it goes and complies with the US homeland security specs.

Massive contracts in the pipeline. Take a look at the hotcopper thread for more info.


Thanks TBE. Looks like they have a low cost base also. New revenue goes to the bottom line :-)

Are you able to outline the contacts concisely? HC is so hard to follow usually.

[The Big Ease]

Corporate,

here is the link.http://hotcopper.com.au/post_threadview.asp?fid=1&tid=902917#4087568 It is actually the most recent thread as I posted this on the weekend as I musing the upcoming announcements...

it goes something like this:
Malaysian Immigration - 60-80m rev per year
Chinese Gas tank - 200m/5 years

Malaysian Drivers License deal - ETC rumoured to have won the tender. no numbers but should be in the ~10m p.a.
Vietnamese Drivers License (MOU signed, currently negotiating the details) - This could be big as 27m licenses need to be upgraded.

Rumours of another "big" deal with China on the cards. 200m/5 years for gas tanks. Imagine if it had anything to do with the population. ID verification could be massive for Drivers Licenses, Passports, Birth Certs and the like. Just huge.

Quite a bit of business development going on in the gulf (read the company presentations)
UK bid for the national ID card.

yeah, it really is quite encouraging. They have reiterated their FY09 NPAT of 48m as recently as last week. Only 6 weeks to go so it would have to be the mother of all stuff ups for them to miss this target. I suspect they will beat it by a little bit. They did the same last year.

[Footsie]

The Big Ease are you TBE on HC?

I had been concerned about the major reshufffling of shareholders recently but the news in the pipeline is too compelling to ignore.

I cant imagine that this sell down will continue for much longer.

Either a enw contract win or once full yr results are out i'd expect this to push the 50c mark.

If everything that is being talked about actually comes off then $1.00 is within reach.

[The Big Ease]

Yeah, I am.

here you go Corporate. A nice overall summary of ETC from Criterion.

http://www.theaustralian.news.com.au/business/story/0,,25168149-23634,00.html

[The Big Ease]

hope you all got onto this thing.
another 9% today on increasing volume.
Large deal pending and more to come.



EDIT: 150% up in 10 weeks. 20% up in 10 days.
Pending announcement of Vietnamese Drivers License deal this week and Malaysian Drivers License next month. Both expected to be in the 10's of millions in revenue per year on approx 40-50% margins.

This is turning into quite a story...

[The Big Ease]

It has been a little quiet on ST for this thread.

A little spruiking:
* Blackrock just became a substantial holder
* It is rumoured a new contract announcement is due in the next few days.
* Apparently a big deal in China brewing too.
* Still on a PE of 4.4 after reiterating 48m 2009FY profit last month.

Is anyone still holding? I would've thought this kind of stock would be right up there for ST'ers.

[Lego_Man]

I am - jumped on the wagon relatively late but thought it might be good for a little more mileage.

Thanks for the info.

[Footsie]

i'm still in of course

[The Big Ease]

What do you think of our mate 20500 Footsie?
I don't know where he gets this stuff from, but I hope he keeps it coming.
Today or Monday he says, so lets see ;)

[Footsie]

ahah
TBE i had just come over to this thread to ask you the same thing

I think he is malaysian and works for the company up in KL. probably and IT guy or something. DOnt think he is high up, but he obviously hears things.
Either way he is a good source of info.



btw, i've been booted off HC. I was using my hotmail account then one day I went to log in and that was it. I tried contacting them but nothing. I might have to reemerge as footsie1

[The Big Ease]

...something like that.
Very nice info, so let's see if Monday is indeed party time.
I reckon this stock is just waiting for a catalyst before heading off.
Unless I am missing something, it should be double what it is by now.

I might be a fool, but Blackrock aint.

Edit: our mate has just come out and made a pretty big call. Reckons a big deal has been done and will be announced Monday.

What do you think of the 30 million options at 50 cents?
Bit on the cheap side IMO.

[Corporate]

blackrock in the news...t/o offer for barclays

http://edition.cnn.com/2009/BUSINESS/06/12/blackrock.barclays/index.html

Managed funds only down 6% from last year...now that is impressive

[The Big Ease]

Read somewhere they manage more funds than the US treasury.
That's a pretty big unit.

[Footsie]

TBE

if there is no ann tomorrow, he will start to lose credibility
aand given he doesn't post that often, i think he will be on the money
(or if its not tomorrow maybe early next week)

alas sooner or later Hot Copper will suspend him tho for insider trading.
I think it will be the vietnam contract.

By the way, giving away 30m options at 50c is like giving away free money.
It should have been set at 1.00

[The Big Ease]

I think so too.
You just get a feeling about some posters.
He doesn't really big note himself, but is quite adamant when he makes a call that he is not talking nonsense.

He has been on the money so far....let's see what happens.
I was rather disappointed with the reaction to the profit confirmation a few weeks ago. I thought that would get a few people on board, though to be fair we have seen the SP move 15% since, I mustn't be too greedy.

[Footsie]

well its not the big contract, but it is news...............

[Footsie]

quite a few over on the HC thread are still quite sceptical of this stocks.

THe persistent selling that has arrived on the back of the good news is a concern.
They are regurgitating old announcements which is somewhat of a worry, but to be honest i think the reason they feel the need to keep doing that is because nobody believes them

After the fiasco with companies like ARR... most aussie fund managers are worried.

Either way I bought a few more.

I notice there is a Buy algo(bot) today which is a good sign.


However, i'd feel much more comfortable if it finished the day +1 or 2 c

[Lego_Man]

Not looking too good for that right now.

Questions are who is feeding this out and why?

[The Big Ease]

IMO it's a good sign that management were aware of the market's scepticism about the cashflows and have taken steps to address this.

10m cash on hand is good news of course, but still only 1/5th of the projected NPAT.
Given the nature of their business, I can understand the cashflow will be lumpy.

I was expecting a contract announcement....still to come perhaps.
I can't believe the SP went down after that.

[Footsie]

nobody like the issue of options i keep hearing.
looks dodgy

Need a new contract to keep this propped up otherwise I fear it might retrace back to 40c in line with the market which looks like its about to start its first decent pull back of this stellar run.

[The Big Ease]

I don't like the cheap options either, but it's not much different from alot of technology start ups.

There might be a few holders happy to take some profits especially in light of the last couple of days on the Dow. Probably a good time to top up.

It is a good story unfolding. The company is hitting targets, building the business etc
I wonder if this is the announcement our mate was alluding to or is there an actual contract announcement coming up?

I agree with you Footsie, we need something to reverse the last couple of days or we might see it continue.

[Footsie]

TBE

i'm watchful and cautious... but not worried about ETC

If it wasnt for the fact that we've just endured a massive bear market and still have massive volaitlity I probably wouldnt even be giving this a second thought.

So far company keeps ticking all the right boxes
1. Increasing profits
2. new contracts
3. improving cashflow
4. directors buying
5. profit guidance confirmed.

All within the past 3 months.

realistically no reason to be suspicous. apart from being based in Asia they are quite different from ARR.

and guess what ..... at 41c management have some work to do to exercise the options ahahah
in reality the agreement for these options was probably decided at a board meeting months ago when the price was back at 30c....... at that point 50c seemed fair.
Its only because the stock has had a massive run that it looks dodgy (perhaps you could post that piece of info to our HC friends . I've been booted off, but can view via a friends log in)

Also consider that these guys are Level 40 Petronas towers. I.e. they are not a bucket shop operating out of some garage on Long Island.

[The Big Ease]

From HC:

Foresight’s

EMT Corporation (ETC - $1.80): On Monday mgt announced the company had received payments for Nexbis bringing its cash balance to +$10m, an important milestone given the market’s scepticism as to whether its contracts with Asian governments would actually result in cash being received. We understand the makeup of this cash balance is partially due to continued Sapio mobile application earnings, receipt of a small (~$3m) cash payment for the China Gas Tank contract invoiced in Dec 09 and ~$5-$6m for April printing for Malaysia Immigration. It is important to note that 1) this cash balance also factors in the $5.8m bond ETC paid for the China Gas Tank contract (i.e. a cash outflow), 2) mgt expect the invoice for Malaysia Immigration’s May printing to be paid before the end of the financial year, and 3) the China Gas Tank payment cycle is 90 days thus the first cash payment for its Nexcode printing that commenced in May is scheduled for August. Indeed, we had forecast a net cash balance of $13.7m at end FY09 and so we see this announcement as containing nothing but positive news. On the other hand the Friday issue of 30m options exercisable at 50c came as a less pleasant surprise given the size and timing, with our FY10 and FY11 EPS forecasts downgraded by 6% assuming full dilution. We understand that these options are not going to directors but to key employees within Nexbis which is understandable given the need to attract and retain key personnel who provide considerable support for new contract wins, however the size and issuance before a material positive announcement will do little to improve investor sentiment towards the company. We still see new Nexbis contract awards before the end of CY09 as likely with Malaysia and Vietnam the most promising countries, offering upside more so to our FY11 forecasts given the long lead times demonstrated thus far between contract signing and printing. Mgt reconfirmed $48m guidance which implies a +$80m profit base for FY10, and with Nexbis cash generation commencing the stock’s valuation metrics appear considerably more “real” with the FY10 PER of 2.4x appearing ripe for ongoing expansion as the market’s comfort with ETC’s cash generation attributes improves. BUY retained


That's my price target for the next 6 months. 3 dollars plus in 18 months IMO.
I think it's quite reasonable.

[shasta]

TBE

i'm watchful and cautious... but not worried about ETC

If it wasnt for the fact that we've just endured a massive bear market and still have massive volaitlity I probably wouldnt even be giving this a second thought.

So far company keeps ticking all the right boxes
1. Increasing profits
2. new contracts
3. improving cashflow
4. directors buying
5. profit guidance confirmed.

All within the past 3 months.

realistically no reason to be suspicous. apart from being based in Asia they are quite different from ARR.

and guess what ..... at 41c management have some work to do to exercise the options ahahah
in reality the agreement for these options was probably decided at a board meeting months ago when the price was back at 30c....... at that point 50c seemed fair.
Its only because the stock has had a massive run that it looks dodgy (perhaps you could post that piece of info to our HC friends . I've been booted off, but can view via a friends log in)

Also consider that these guys are Level 40 Petronas towers. I.e. they are not a bucket shop operating out of some garage on Long Island.

Footsie, all due respect, but isn't HC for kids...:confused:

Some of the comments "go you good thing", "what do you think the SP will be" etc really leaves alot to be desired.

It is a site which accepts script, & pays people to pump & dump stocks...

I can't be bothered with it anymore, no value in it

Also, whats with the ann saying how much cash they have, pretty deseparate IMO.

[The Big Ease]

Shasta,

ETC is not yet popular enough to attract the peanut gallery.
There are quite a few good contributors to the ETC thread on HC and not much discussion in this thread.

Have you taken a look at this company?

[Footsie]

Shasta

They stated the cash position because so many people in Aussie dont believe the story given the bad experience with ARR and others.

[Lego_Man]

Shasta

They stated the cash position because so many people in Aussie dont believe the story given the bad experience with ARR and others.


Looks like BlackRock dont either anymore given today's announcement...

[The Big Ease]

Indicators are heading up.
Not much volume going through at the moment.

We could probably expect another leg upwards over the next week.

Still waiting on the Vietnamese and Malaysian announcements.

[steve fleming]

nobody like the issue of options i keep hearing.
looks dodgy



Hopefully ETC has remembered to include the cost of issuing these options in their earnings guidance.

Issuing 30 mil options will at least cost $5mil....as they vest immediately, this should immediately be expensed.

[The Big Ease]

Our mate has popped his head up again Footsie.
Some very nice things to come if he is on the money (again!)

Might be some good buying at these prices.

BTW,

20500 = Richee

IMO.

[Footsie]

i think 20500 is fake, I dont think he is in Malaysia
His english is too poor, that is contrived.

Most people working in Malaysia know how to spell predicksions
plus he posted this morning at 7am Aussie time, which unless he is an insomniac is 5am malaysia


My guess is that he is based in Aussie and he may work for the company but perhaps is just a poster who has done is homework. He seemed to know a lot about the company . I.e that they were based in the Petronas towers etc etc.

why do you think its richee?
PS richee posted this morning at 6:38 am (aussie time) and 20500 at 7:11 am time..... perhaps you are right

[The Big Ease]

If 20500 is fake, he has gone to alot of effort.

He was posting in the ETC forum way back when nobody was even looking at it letalone posting in it. Post after post was just him. I don't get it.

Then when a poster by the name of malmanu criticised ETC, 20500 got pretty defensive about it.

You're right about the spelling though. It is over the top, but it wouldn't surprise me. People in English speaking countries can't even spell properly.

I am undecided and taking his comments with a grain of salt. BUT, he has been pretty close to the mark so far.

Richee continually comments on how the forum is for us all to contribute etc and when 20500 "disappeared" made similar remarks that his absence seems to have promoted discussion about the company. This seems to be an recent theme of his last 4-5 posts ie commenting on the purpose of the forum and encouraging discussion. My guess is 20500 wanted to step out to see if it would result in more discussion in his absence. Also, Richee and 20500 seem to post within a very short time span of one another. Richee, like 20500 hasn't posted on any other stocks.

[Footsie]

The fact that he knew about the company name change i think confirms he is an insider.

He needs to be careful, he is actually posting price sens info.


Seems some buying has come back.... which is good. If this materialises into big volume buying then we might be about to go for a run back to the mid 40's

ETC price action often seems to have these V shaped reversals.

[The Big Ease]

well if everything she has posted comes to fruition, ETC is going to be one helluva pay-off.

I topped up yesterday at 38.5.
I think you are right about the v-shape bounce. I posted on HC that 2 up days has resulted in a bigger run upwards everytime in the past 3.5 months. This should continue from here, aided by any further good news.

I like the name change to Nexbis.

[Footsie]

If Richee is a male why do you think 20500 is female?

It is of course possible that 20500 is the girlfriend/mistress of someone from ETC. But definitely someone with insdie knowledge. I love it.

Yes i like the name change too.

I'm very tempted to top up again as well. Just like it smelt odd on the way down, its rise up now seems fishy too. I'm waiting for the big volume. a 5m+ day and its on for young and old.

If they could win a contract in the USA or UK..... I think i'd be backing up the truck to buy this stock. A contract win with a country like that would send all the doubters packing and the price to 80c-1.00 v. quickly. IMHO

I for one wuold pay 50-60c based on announcement of that calibre.

[ollie]

Morning ETC watchers, getting interesting isn't it ??

A couple of points i wish to make, HC is not for kid's , there are some very intelligent posters over there, of course like here, there are also some clowns.

And yes, your suspicions are correct, 20500 is a Women and like myself has bad spelling, but unlike myself i think she does it on purpose ??? But she dress's real nice to make up for it >>>>>>>>>>>> ?

[Lego_Man]

I have never seen so many rampers together in one place.

It's a good place if you want to have a feelgood w@nk about your portfolio, seems to be about it though.

I do still visit there though for the aforementioned reason.

[Footsie]

TBE

do you think 20500 is clutching at straws now? I mean he/she has been calling for a new contract now for about 6 weeks but nothing has happened.

but then he/she always comes out with information like the name change and the US company paying ETC rather than the chinese govt direct.
He/she can only know this info by being and insider.

Also he/she mentions peter dykes the cfo a lot, rather than the ceo. I wonder if he has some link to Dykes?

I bought some more y'day.... shouldnt have really. I told myself no more buying of this stock till more news... but i put some more cash in across all my stocks y'day

[Lego_Man]

It's a worry - limp share price and bugger-all volume in the midst of a hard market rebound.

Not quite comfortable enough to buy yet.

[The Big Ease]

20500 has stated her gender, so I will take that on face value.

I am conscious of the strategies used to influence people and if 20500 is a con, I can see quite a few of them in play. You would have to go to alot of effort to do what she has. She has been posting for the best part of 8 months, strongly supporting the stock with various positive comments and predictions.

She has been right a number of times now, albeit slightly off with the exact details like the company code for the name change or the exact nature of announcements, despite knowing they would be "important".

I am not sure if she is an insider or simply someone with a line to the inside. Some of the "predictions" have been awfully specific and way in advance.

At the end of the day, it is interesting and somewhat reliable thus far. But irrespective of her posts, ETC just looks to be an outstanding BUY right now. Her posts pique my anticipation, but they only specify what I would be looking out for anyhow ie more contracts and more cash. She just happens to provide some speculative detail.

I can understand the market's apprehension. Cash will win the day and I'm punting on it being in the bank in due course.

Some more contracts on the way too. Vietnam has been long over due, but negotiations can be like that sometimes. Everything can be all agreed but delayed for minor reasons like ratification or wanting to cut the ribbon and sign on location etc Just silly stuff, but it can happen.

I just don't see any negatives at all. The SP is acting up, but the cash will sort it all out.

[Lego_Man]

She could be a mistress of one of the execs...

[Footsie]

the fundamentals looks great. why do I feel so nervous about this company

And why aren't some of the other small fund managers buying ETC back in the 30's?

It water torture!!!

[Lego_Man]

Yeah, looking pissweak again today

[Footsie]

realistically, within a few months of balance date if NPAT is 48m they should have 48m cash in the bank right?

[The Big Ease]

I'd say by August/September they should have soemwhere in the order of 30m cash, possibly more. I doubt they will have the full 48m on hand until invoices from FY10 are paid because they will need to fund their operations.

[The Big Ease]

BTW, it just occurred to me that 20500 has probably read this thread given she has google alerts set up for ETC related words and regularly search blogs/forums through google.

[Damo79]

i think 20500 is fake, I dont think he is in Malaysia
His english is too poor, that is contrived.



Definately agree there Footsie. I just went back and had a look at the first few messages 20500 posted last year. Perfect spelling, perfect grammar, and advanced use of idioms. It seems his/her language deterioted at a time coinciding with hints that he/her was based in Malaysia :p

From September last year, "Things sound like theyre hotting up at ETC - and now I hear its now being courted by China, US and brunei to implement its nexbis national sec and drivers lic system".

So from using terms like "hotting up" and "courted", he/she has gone to being unable to spell predictions or perfume... lol

[The Big Ease]

We should try to smoke her out with a campaign of targetted scepticism...it will be amusing.

[Corporate]

What about the name change call - that is a pretty impressive prediction?

[The Big Ease]

I agree.
20500 has access, definitely. Not sure about how far from the inner circle though.
I just wonder about the motives.

The latest bits of information have opened up a can of worms for me.
Need more info on Saddington...but according to 20500 they pay the invoices on time and having researched them, a june filing says AQSIQ in china have instructed them to prepare for a roll-out for Elevator equipment, which will have revenues "comparable with the gas tank deal".

Hence the prediction about the next big deal.

I am curious about the good news from the US.

[Lego_Man]

Definately agree there Footsie. I just went back and had a look at the first few messages 20500 posted last year. Perfect spelling, perfect grammar, and advanced use of idioms. It seems his/her language deterioted at a time coinciding with hints that he/her was based in Malaysia :p

From September last year, "Things sound like theyre hotting up at ETC - and now I hear its now being courted by China, US and brunei to implement its nexbis national sec and drivers lic system".

So from using terms like "hotting up" and "courted", he/she has gone to being unable to spell predictions or perfume... lol

Could be one of those southeast asian ladyboys? Anyway "it" seems more interesting than your run of the mill ramper but still one of them nonetheless. Money talks and no buyers in the last several weeks speaks volumes.

[Footsie]

there are plenty of other stocks I could buy.

Stocks that have powereful up moves should not retrace by this much.

[Footsie]

20500 I know you are reading this.
I have been kicked off HC. that's why I dont post.

Can you answer this specifically, when is the vietnam contract giong to be confirmed. it was signed back in AUgust 2008!

Footsie

[Footsie]

canellatoin of options and re-issuing is a good sign IMHO and improves their credibility.

bit harsh for employees, but if the only way is up.....

on the bid to buy back what I sold on that news...
assuming that our "seller" will smack back down

[Lego_Man]

Time to get back in, hard and long?

[Footsie]

back in up to my original holding

had to pay 40...

40c has been a big support /res level




ETC seems to make big moves in either direction on large volume
closed 40 bid so hoping its going to burst higher next week.

[STRAT]

back in up to my original holding

had to pay 40...

40c has been a big support /res level




ETC seems to make big moves in either direction on large volume
closed 40 bid so hoping its going to burst higher next week.Hi Footsie. There have been a few positive signals from the chart in the last couple of days. Is that you fellas getting back on board? :D

[The Big Ease]

Very happy to see the right thing done.
Management have been very responsive to the market.
Adds quite alot of credibility IMO.

Well done ETC. They are doing all the right things and perhaps we will see this make a few moves from here.

oh yeah, topped up at 38.5. Looking like a good decision now. V. Happy holding this.

I think this move also demonstrates the management are focused on SH value.
Hopefully upwards from here. This announcement gives me great confidence in the upcoming results too.

[steve fleming]

Hopefully ETC has remembered to include the cost of issuing these options in their earnings guidance.

Issuing 30 mil options will at least cost $5mil....as they vest immediately, this should immediately be expensed.

Cancelling the options is a nice way to increase profit for the year by $5mil.

The new options have been conveniently issued on 1 July 2009 - so now won't impact FY09 profit.

[Footsie]

HI steve

Yes very clever. But overall its still good news for shareholders. PS why does it cost to vest options?

By the way I see you have AMA as -ve 10 bagger. I made good money on AMA in 2007.
What ever happened to them?
too many acquisitions?
I remember watching a video presentation of the CEO. THis will sound a bit Bob JOnes, but I never liked his haircut, too slick. Kind of Jason Donavon early 90's. Sold soon after watching that.

[steve fleming]

HI steve

Yes very clever. But overall its still good news for shareholders. PS why does it cost to vest options?

By the way I see you have AMA as -ve 10 bagger. I made good money on AMA in 2007.
What ever happened to them?
too many acquisitions?
I remember watching a video presentation of the CEO. THis will sound a bit Bob JOnes, but I never liked his haircut, too slick. Kind of Jason Donavon early 90's. Sold soon after watching that.

Hi Footsie,

I guess its good news for shareholders, but a bit amateurish for an all-ords index company with a m/c of $175m.

Re options – the cost of issuing options (ie the value of the options granted) should be expensed over the vesting period of that option.

When ETC first announced the issue, all the 30m options were due to vest immediately on 12 June 2009 – and the cost (approx $5m – based on 75% volatility) should have been expensed on that day - 12 June 2009 – (ie in FY09).

The new set of options vest between 1 July 2009 and 1 July 2012, therefore will be expensed over this much longer period and there will be no expense in FY09. So ETC’s profit for FY09 should be approx $5mil higher now.

Re AMA – yeah i got it wrong, they tried to get too big too fast with too much debt and not enough governance. The Scott Robinson/Jason Donovan look-a-like CEO got the punt.

[The Big Ease]

Shasta,

ETC is not yet popular enough to attract the peanut gallery.
There are quite a few good contributors to the ETC thread on HC and not much discussion in this thread.

Have you taken a look at this company?
spoke too soon.

The peanut gallery is in full force.

It is crunch time for ETC.
I suspect they will have something for the Vietnam contract to get the market bubbling in time for the EGM and then profit announcement.

Hoping it all goes as expected. Profit has been confirmed many times, just waiting, waiting for the cash now.

[The Big Ease]

Time for ETC to deliver.
I understand an update is due soon on a big contract and the EGM next week should deliver some good news also.

We have another uptrend beginning, which looks like continuing.
This stock lagged the March recovery and then exploded 100% in 6 weeks. Weakness coincided with the pullnack in the overall market and it looks like it will lag the second leg of the recovery by a couple of weeks too.

ETC looks primed, the market is awaiting confirmation and then the SP should live up to the promise.

[Footsie]

nothing but news will drive it higher now.

some using todays rally as an opportunity to sell by the looks.

[Footsie]

still nothing on vietnam.......... hmmm.

price slipping again.

2 weeks till results i guess not that long to hang out.

[The Big Ease]

Footsie, the USA have scrapped the Bush program for Drivers Licences.
DHS is now looking at one costing around 1.3b instead of the previous 4b.

Could it be that this was why dykes returned from the USA a happy man according to our mate? And the post about homeland security endorsing the technology recently?

It might be. WHat would that do for ETC's shareprice?!


DHS chief to testify before Senate committee on cheaper program to secure driver’s licenses
Eileen Sullivan July 15th, 2009 DHS chief to promote cheaper secure licenses

WASHINGTON — Homeland Security Secretary Janet Napolitano says the country needs to make driver’s licenses more secure to thwart terrorists, and a new program supported by the Obama administration and governors across the country would do just that.


The creation of a new secure license would replace the Bush administration’s proposed Real ID card with something called a Pass ID card.

Speaking to senators Wednesday, Napolitano says in prepared testimony that the Bush administration program is unrealistic because it’s too expensive and the technology necessary to validate the licenses is not available.

Thirteen states have voted not to participate in Real ID, and others have raised complaints.

Opponents of the new program say the Pass ID would relax rules enacted after the Sept. 11, 2001, terrorist attacks.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — Homeland Security Secretary Janet Napolitano is promoting a new program to make driver’s licenses more secure and less expensive than the plan pushed by the Bush administration.

On Wednesday, she was scheduled to testify before a Senate committee considering legislation that would replace the former administration’s Real ID card plan with something called a Pass ID. Those who support the new program say it would not gut the security requirements in current law. But others say the new ID would relax rules enacted after the Sept. 11, 2001, terrorist attacks.

Bush’s Real ID plan has been stalled well short of nationwide implementation by opposition in the states. Thirteen states have voted not to participate, and others have raised complaints.

The National Governors Association helped write the new proposal. As Arizona governor, Napolitano said the Bush administration did not collaborate enough with governors in the development of its plan for implementing the congressionally mandated program. The governors group said the current law would cost states $4 billion while the new plan could cut the costs to between $1.3 billion and $2 billion.

The 2001 attacks were the main motivation for the original law. The hijacker-pilot who flew a plane into the Pentagon, Hani Hanjour, had four driver’s licenses and ID cards from three states.


--------------------------------------------------------------------------------

[Footsie]

maybe. maybe not. in my experience yuo don't usually send your CFO to front project sales.

20 AUgust cant come soon enough .

there is another company i reviewed when I purchased ETC called SOT.

I went with ETC due to valuation metrics. at the time they were both 20c .. SOT now 59. ETC 39

hindsight.
I wonder where we would be if it hadnt been for the options saga.

this stock really requires patience and a strong "belief"

[Footsie]

I've tracked down the selling in this stock via the top 40 holding from 31 July

It appears the bulk of the sell down has occurred from "Swanleigh" who held 7.8m on 30 June and as at 31 July were outside the top 40 (or under 1.4m shares)

Also Soverign Key sold a few down from 10m to 8.5m
and QIC down from 8m to 6.5m

NET selling from these 3 = 10.8m

The buying was spread around most of the top 4 and word around is that there has been a large buyer from HK. "Phillip Sec HK Ltd"-close to going sub and also "Avlibb PLC"

I understand Sovereign KEy are only sellers over 40c and QIC seem to be a bit sporadic.

TBE you are welcome to inform the HC ers of this news.


Regards
Footsie

[The Big Ease]

ousia on HC


Folks on this thread who keep speaking of "churning" or there being "one big seller" are wrong.

In fact there are a number of legitimate buyers and legitimate sellers, although some are using algo trading methods which might give the impression of some kind of "price manipulation" occurring. While the algos are minimizing the average size of each trade, as far as I can tell, ETC's share price is a currently a function of normal supply and demand between buyers and sellers.

For the month of July, approximately 24mill shares in ETC traded. Of this 24 mill, roughly 7 mill were traded by 'retail' investors or smaller scale day traders (i.e., your typical etrade or comsec user). A further 17 mill (approx) shares were traded by insto or professional (top 40) investors (most anonymously, some through Lodge).

Regarding, ETC's top 40, there were 6 sellers last month, who sold a combined 17mill shares (approx). As far as I can tell, of these 6 sellers, 4 are now out of ETC completely, and 2 remain. The two remaining sellers, of course, may continue to sell with a view to exiting the stock, or they may merely be selling down.

I've done about as much research into ETC as a company outsider can do, and I'm as confident as an outsider can be that the insto sellers are selling for non company-specific reasons. Indeed, I can confirm that one of these sellers has a mandate to de-risk its entire portfolio, and has been selling a wide basket of biotechs and small caps all year.

Interestingly, while there were 6 top 40 sellers last month, there were 10 top 40 buyers (some new, some existing), who bought a combined 17mill shares (approx). So all of the insto selling was soaked up by insto buying, and there are in fact more buyers than sellers. The top 40 still owns a combined 74% of ETC stock. Some of these buyers are grouped under nominee account names, and so I have no idea who they are. But I can say, that at least one of the recent large buyers in ETC has a holding account based in Hong Kong. I'm also aware that a well-known member of Australia's small-cap fund manager community has a sizable personal holding in ETC. So some fund managers aren't just put their fund's money into ETC, they are putting their personal cash into ETC as well.

Assuming the 2 top 40 sellers continue to sell (and today's activity indicates that they are), and assuming average daily volumes are maintained, I would expect these remaining sellers to be completely out of ETC in around 2 weeks (but keep in mind this timeframe is pure guesswork on my behalf). Once this inso selling is complete, and assuming the current positive macro-trading environment is maintained, the daily sell volumes from retail investors will no longer be sufficient to maintain the current price range and real competition for ETC stock will start again. In my opinion, this competition for ETC stock could see the SP soar above $1 this calendar year.

Furthermore, ETC is not too far away from the ASX300, and once included, this listing will open up a whole new pool of long term investors (who are presently excluded from investing in ETC) and give the sp further upward momentum. The recent move to an independent chairman will also help in this regard.

The conditions I discussed in a previous post for a substantial ETC price rise are slowly falling into place. What we need now is (i) for ETC to post an FY09 result of approximately $48mill, (ii) for the details of the full year report to be in order, and (iii) for ETC to give a positive outlook.

One final point, given the amount of cash I expect ETC to generate in FY10 and beyond, I'd would be surprised if the company does not indicate its intention to pay a dividend or institute some kind of capital return for FY10. Yes, they are going to need reinvest some of their profits into further developing Nexbis IP, but there should ample funds left over for a dividend/capital return.

[Footsie]

Given OUisa;s extensive knowledge i wonder if they are in fact that small cap fund manager with a large personal holding??

I've only managed to acquire the info I have becuase I have a lot of connections and spend quite a bit of money on Brokerage!!

Also Ouisa knows quite a bit more than more me and I;ve done a fair bit of digging. I'd suggest Ouisa is a big shareholder or aussie fund manager.

[Footsie]

It's seems a name change did the trick!!
up 10% in 2 days :)
but more seriously.... talk of the company doing a roadshow post results and it now appears the selling that was around is drying up.

I've no doubt the NPAT will be 48m... so question is what will the cash balance and commentary be.... if its half decent. you'd have to expect it to trade to news highs before end of this month.


short term target for me is mid 60;s... i'll re-asses if gets there.

[The Big Ease]

up where we belong! ;)

nice momentum footsie. 46.5 cents

[Lizard]

So ETC/NBS now recycled as YBS with John Houston as Chairman again.... there's always something new in the markets to arouse incredulity!

[Joshuatree]

Only one solution; make him/them honorary live in custodians of a well used long drop just outside Timbuktu .

[Joshuatree]

Correct me if I'm wrong but I think its ticker is YPB , Liz....ard.

[Lizard]

Correct me if I'm wrong but I think its ticker is YPB , Liz....ard.

Oops! Too much of a rush and mixing my tickers after mixing too many drinks.... :ohmy: Thanks JT :)

[Joshuatree]

Two posts on H/C already deleted ,1 was simply comparing YPB's product with others ,no attack or offensive language, down ramping etc. Really makes you wonder re Agendas, motives , misinformation etc.