RXP - RXP Services Ltd

[Lizard]

Here's another relatively recent float that caught my eye in the quarterlies today. RXP is acquiring ICT consulting services and reporting growing cashflows.

It's possibly a little early for RXP (currently trading at 50.5cps), as most roll-ups seem to have at least one speed bump and plenty seem to fail due to overpaying for acquisitions. However probably all be clearer in 7 months time when the HY13 comes out.

Definitely seems like a space where consolidation might work. Have put it on the watchlist.

[Joshuatree]

Bought a few today. RXP have bought Transpire today and chances are goodearnings will be reported to the upside.

[Snow Leopard]

I ran my eyes over them about two months ago, but I can not find my notes for it.

I was obviously not sold on the idea at the time and did not buy.

Best Wishes
Paper Tiger

[steve fleming]

Bought a few today. RXP have bought Transpire today and chances are goodearnings will be reported to the upside.


I am in this now JT.

Trading on a FY14 EV/EBITDA of 6 x

CCZ Stanton have a target of 80c
Ord Minnettt have a target of 95c

Consensus FY13 EBITDA is $4.85m so under/outperformance of that is the key number to look for when they report.
(RXP have previously provided EBITDA guidance of ~A$4.5 million to ~A$6.0 million)

[Joshuatree]

Cheers Steve.Looking forward to results. Completed my buying today.

[Joshuatree]

A "I told you so" prequel huh:mad ;: Thanks anyways for your thoughts.

[steve fleming]

Another very strong (record) quarter with CF from operations of $1.3m. "Reflecting the on-going strength of the business"

Now, will the strong cash flows and balance sheet enable a maiden dividend to be declared?

[steve fleming]

Just be careful. The situation for ICT service companies is pretty dire at the moment. The big cut backs in IT spending in Govt is flowing through, and private business is not picking up the slack. Being very familiar with this industry, and still sometimes working within it, I can say that there is not a lot of new business out there, so as old contracts wind up, revenues will wind down.

Yes that is a risk, but maybe not across the whole sector. My wife works for an ASX-listed ICT consulting company (not RXP!) and she has been asked to work additional hours given an increased number of projects on the go.

[Joshuatree]

Yeehaa, I like cheers JT

Check out www.nps.gov/jotr/ After Green NZ its refreshing

[steve fleming]

Another very strong (record) quarter with CF from operations of $1.3m. "Reflecting the on-going strength of the business"

Now, will the strong cash flows and balance sheet enable a maiden dividend to be declared?

Hmmm, not very impressed with RXP's CFO's attention to detail. The 4C out today was dated 30 April 2013.

Hopefully he pays more attention when he is preparing his accounts.

[steve fleming]

I am in this now JT.

Trading on a FY14 EV/EBITDA of 6 x

CCZ Stanton have a target of 80c
Ord Minnettt have a target of 95c

Consensus FY13 EBITDA is $4.85m so under/outperformance of that is the key number to look for when they report.
(RXP have previously provided EBITDA guidance of ~A$4.5 million to ~A$6.0 million)

Solid result (normalised EBIT of $5.15m) but great outlook statement.

"FY14 Revenue forecast to grow > 40%

Expect FY14 EBITDA margin to continue to grow"

That gives FY14 revenue of $42.2m @ (current) 20% margin = $8.5m

Current EV = $39m

So trading at 4.5x - looks way too cheap to me given growth profile.



EDIT: there is actually $5m of deferred consideration, so EV is actually $44m, so trading on 5x

[Joshuatree]

Yes ,fab. Share price up 10c , 16% on open.

[steve fleming]

Yes ,fab. Share price up 10c , 16% on open.

Closed at an all time high today.

i suspect this will continue to re-rate over the next few weeks with a $1 initial target.

[Corporate]

Steve

This looks very exciting! Pitty it is so thinly traded - i couldn't get any without chasing the price up.

[steve fleming]

Steve

This looks very exciting! Pitty it is so thinly traded - i couldn't get any without chasing the price up.

Illiquid stocks re-rate the best.

Thats why I try to take advantage of buying opportunities when they present themselves (i.e. when there was the big sell down of RXP at around 60c a couple of months back)

[steve fleming]

Illiquid stocks re-rate the best.

Thats why I try to take advantage of buying opportunities when they present themselves (i.e. when there was the big sell down of RXP at around 60c a couple of months back)

break out day...overhang gone??...is the re-rate on??

Cannacord have initiated coverage with a 96c target

[steve fleming]

Further confirmation of the growth story today:


http://stocknessmonster.com/news-item?S=RXP&E=ASX&N=397294


"We expect cash flows from operations to continue to build and our strong cash position at the end ofthe quarter leaves the door open for us to take advantage of opportunities to continue the growth bothorganically and through further acquisitions".


A real favourite of the Australian Capital Network gang

[mark100]

[/I]

A real favourite of the Australian Capital Network gang

I hold but if anything that is my concern. Everyone already loves RXP so it may be harder to re-rate. I like those under the radar stories that no one talks about!

[ozzie]

I hold but if anything that is my concern. Everyone already loves RXP so it may be harder to re-rate. I like those under the radar stories that no one talks about!

Is it really that well known? Morningstar and Skaffold both show only one analyst following (Skaffold only has two 'likes') and CommSec has zero analysts following. Not a great number of posts on
HC either from what I can see.

[steve fleming]

Is it really that well known? Morningstar and Skaffold both show only one analyst following (Skaffold only has two 'likes') and CommSec has zero analysts following. Not a great number of posts on
HC either from what I can see.

ozzie, wouldn't pay too much attention to Skaffold, a second rate product that not even Roger Montgomery himself uses.

there are at least 3 analysts that current cover RxP ( Cannacord, Ords and Wilsons)

if you look at h/c, Tbf and ACN sites, think you'll find all the usual suspects who you think would be interested in a stock like RXP are already in it

[mark100]

Is it really that well known? Morningstar and Skaffold both show only one analyst following (Skaffold only has two 'likes') and CommSec has zero analysts following. Not a great number of posts on
HC either from what I can see.

ozzie you'll learn one day that Skaffold is a joke that uses out of date information. RM is a brilliant salesman

[ozzie]

Actually Skaffold's been greatly upgraded over recent months - where it used to log you out after a few minutes, was sluggish and not always
up to date, now it stays on all day, is lightning fast and we're assured is updated overnight. However can you recommend any first-rate products
or sites, I'm always looking to improve my sources of info? (HC, TBF and ACN are great btw. Also Eureka Report, UTR, YMYC and Smart Investor.)

[catbert]

Would you guys please stop talking in acronyms and explain what the following are (for us less-well-educated investors): TBF, ACN, UTR, YMYC?

Also, steve, how do you know which analysts cover a particular stock, such as this one?

(Sorry for the newbie questions!)

[Joshuatree]

TBF = To Be Fuc(Bonked)

ACN= Action Caress Nurture

UTR= U Twisted Recalcitrant

YMYC= You Mother Yucker Clicker obvious really :cool:

[ozzie]

TBF = https://www.facebook.com/TheBoatFund

ACN= https://www.facebook.com/australiancapitalnetwork

UTR= Under the Radar report

YMYC= Your Money Your Call

[catbert]

Thanks ozzie, much appreciated :-) I'll check them out ...

[steve fleming]

there are at least 3 analysts that current cover RxP ( Cannacord, Ords and Wilsons)



i have to correct myself, the brokers following RXP that I am aware of are:

Cannacord – 96c target
Ord Minnet - $1.00 target
CCZ Stanton - $0.83 target (but this has not been updated since RXP has made their post year end acquisitions)

I thought Wilsons had coverage but that may not be the case

Catbert, this is from a subscription site called CapitalIQ

[ozzie]

Interesting announcement today that AMP have been recent heavy buyers of RXP. That would
account for a lot of the recent volume.

[steve fleming]

Thanks to Ormond for this - the theory is these smaller IT players are more nimble and with more relevant offerings (i.e. RXP with its focus on mobile development, cloud offerings and strategic advisory services)


What’s in store for IT stocks in 2014?
By Tim McArthur - December 18, 2013

Information technology (IT) services provider Oakton (ASX: OKN) has released a copy of a presentation given by CEO Neil Wilson at the BBY Technology Investment Conference. The presentation cut to the core of what has made 2013 a disappointing year for many investors in the IT services sector by declaring ‘significant shifts for traditional IT services companies’.

The change in industry dynamics has forced many of the larger, more established players to review their business models and focus. In Oakton’s case this has led to the company transforming its business to establish a market position as a provider of specialist consulting and IT services which incorporate cloud based delivery models and allow for Oakton to deliver ‘solutions as a service’.

While Oakton’s share price has moved significantly higher (around 30%) in the past few months the company’s full year results and outlook have not been inspiring. Trading profit fell 12% for the full year, while guidance provided during the BBY presentation stated that trading conditions remained challenging and that the firm would be relying on a strong second half in the current financial year.

The adjustments required by the larger, more established IT services companies (with the exception of Oakton) have resulted in their share price performances significantly underperforming the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) over the past year. SMS Management & Technology (ASX: SMX) has seen its share price fall 21% in the past 12 months, while Data3 (ASX: DTL) and DWS (ASX: DWS) have recorded falls of 10% and 16% respectively. A favourite pick of a number of brokers at the moment UXC (ASX: UXC) has fared slightly better for shareholders with the stock price up 5%.

It’s quite a different story amongst the smaller, more nimble firms however. Empired (ASX: EPD) and RXP Services (ASX: RXP) have seen their stock prices rally 64.5% and 44.4% respectively. The offerings by these two firms and the lack of legacy issues to deal with, have resulted in both companies posting solid earnings growth during the year.

Foolish takeaway

As the larger IT service companies deal with their legacy issues and adjust their cost bases they will be better positioned to deal with a cloud-based future. As trading conditions pick up and earnings improve the market may again start to look more favourably upon these stocks, which would make the sector worth keeping under review during 2014.

The Motley fool

[steve fleming]

http://www.eurekareport.com.au/article/2014/2/5/small-caps/it-sector-needs-reboot?utm_source=exact&utm_medium=email&utm_content=593468&utm_campaign=Wednesday&modapt=


.......Others like RXP Services (RXP) also is expected to report higher revenue due to a number of acquisitions it made in 2013.


Top 10 IT stocks based on consensus sales growth expections for FY14


Code
Company
Sales growth FY14 (%)
Sales growth FY15 (%)
EBITDA* growth FY14 (%)
Total rtn 1-yr (%)


RXP
RXP Services
72.64
22.02
103.58
46.73


EPD
Empired
68.72
27.85
124.90
63.23


PPS
Praemium
31.98
7.03
-252.24
121.43


HSN
Hansen Technologies
28.88
4.14
55.93
51.00


IFM
Infomedia
13.06
3.54
123.97
80.67


IRI
Integrated Research
12.77
6.62
20.21
-2.20


ASZ
ASG Group
12.10
1.56
n.a.
-28.36


TNE
Technology One
10.11
8.97
16.30
55.66


UXC
UXC
7.95
6.04
14.46
5.16


OCL
Objective Corp
4.36
5.01
8.84
8.78


*Earnings before interest, tax, depreciation and amortisation


Source: Eureka Report, Bloomberg


B

[steve fleming]

I thought the half year result was solid and proved RXP are progressing their strategy. Margins are down, but I suspect there are some one offs in there that have impacted. Results IMO are not as bad as some think.

However, FY minimum guidance of $7.8m EBITDA is so far short of the $9.6m consensus estimates, so it is no longer going to be a brokers favourite. There is some acquisition upside, but all these acquisitions are starting to make me nervous.

I reduced my holding today, and no longer have RXP as a core hold

[noodles]

I exited the entire IT sector a while back with the sale of EPD. With most of the sector in the doldrums it is unlikely that one company gets to outperform (ditto for mining services). Too hard to look for a diamond in the rough, when there are enough gems sitting on the green :-) (ie. look to other sectors)

I've got a position in CGO.AX. They are growing in Europe. Other than that, no IT service stocks.

[mark100]

I dumped RXP immediately after the last capital raising. That turned me off. Too much focus on acquisitions and raising cash rather than showing the existing businesses are generating a sustainable EPS figure.

Like noodles I do own CGO. Recent upgrade has them trading on potentially <10x FY14 with overseas growth, net cash on the balance sheet and ROE of 20% plus

[steve fleming]

Nice to see a recovery on big volume yesterday

It was a solid half year result
organic rev growth of 18%,
total rev growth of 105%
increase in eps of 29%
increase in NPAT of 158%
EBITDA margins of 16%
Australian profit on budget and just HK under performing

I just think there was a big expectation gap between the brokers, the ACN crowd and a couple of other high profile RXP supporters, and reality

I think in part this was caused by RXP's earlier guidance when they released their full year report and they talked about exceeding current EBITDA margins. I (and others) took it as exceeding 2H13 EBITDA margins (20%) rather than full year FY13 margins (16.3%)

Management should probably have done better in resetting these expectations and being clearer in their guidance

[mark100]

stevefleming,

Another comparison could be against the previous consecutive period i.e. the last half of FY13 against the first half of FY14. On this basis:

NPAT fell 16% from $2.63m to $2.2m
EPS fell 40% from 3.7cps to 2.2cps

Seasonal or not, the NPAT fall seems odd for a business making acquisitions along the way.

WAM were sellers a few months back. They are more often than not on the money

[Joshuatree]

Thanks for the sequel kw :scared::p I'm holding DTL,,RXP ,CGO and EPD atm . "Early because i don't wanna be late" .DTL and EPD have had good results atp and banking on RXP having one too.

[Lizard]

Yes, I picked up a few DWS hoping for a good result...

[Joshuatree]

RXP results REV up 85% to $56 mill
NPAT up 86% to $6.5 mill
PBT margin increased to 16.6 % from 16.3%
cash at bank $18.4 mill with zero debt
staff numbers from 212 to 420
completed 6 acuisitions successfully

We are again targeting strong rev and earnings growth in FY15 and expect to maintain a PBT margin in line with this past year allowing us to continue to grow organically and through acquisition We have had a strong start to FY15 with July 14 rev in excess of $6 million."

Poss div in 2nd half 2015
"...we are genuinely excited by the opportunities we see ahead for RXP"
S/P up 6% to 78.5c atp.

[Westboy]

A good result but cashflow wasn't great. Given the working capital cycle of paying employees, then billing clients, then collecting cash I am still trying to get me head around just how much cashflow will lag profits! It's probably about 10% of revenue but that is a total guess at this stage!

[Joshuatree]

Update
expect REV FY15 $75 to $80 mill and EBIT $9 to $11 mill Last year $9.3 mill(haven't certified)
1H15re$35 mill EBIT $2.5 mill
Several large contracted projects postponed commencement dates to the third qtr
But will they deliver;mkt is doubting.

[Joshuatree]

And punished, as low as 32c now 35c unforgiving mkt and fair enough.

[cloggs]

Finally started studying up on TA a few months ago, just from books in the library. After a few careful tries I had a ruthless cull a few weeks ago, and RXP was one of its victims. Sold it at 59 cts. That obviously paid off.

[Joshuatree]

Mkt Cap re $72.5 million

Key highlights for the 2015 financial year:


 Revenue up 41.5% to $78.9 million
 Profit before tax up 12.4% to $10.4 million
 Strong second half growth over pcp – up 26% in both revenue and profit
 $25 million Westpac acquisition debt facility put in place
 Maiden dividend of 1.25cps, fully franked, paid on 9 October 2015
RXP Chief Executive Officer Ross Fielding commented:
“The 2015 financial year produced solid growth across both revenue and profit before tax (PBT). It wasparticularly pleasing to see momentum build in the second half with growth in both revenue and PBT ofover 26% on the prior corresponding period.
“Our team continues to grow, our specialisations continue to evolve and the work we do with clientscontinues to grow in terms of size and duration.”



Outlook for the 2016 financial year:



 Forecasting revenue in excess of $108 million and PBT margin in the range of 13–14%
 Continue to see a strong pipeline across our specialist practices
 Q1 revenue and PBT numbers were strong, providing a base for a solid first half result and positiveoutlook for FY16
 Good organic growth so far (30+ people), with utilisation in line with plan
 Integration of both EV and 10collective into RXP going to plan – we look forward to capitalising on
the added opportunities these will bring
 Investment in, and evolution of, “RXP Solutions and As A Service” offerings will continue
 Progressive dividend policy now in place


I sold a while back,watching again.

[percy]

With projected growth of over 20% pa for the next couple of years and a current PE of under 10, I brought a few.

[noodles]

With projected growth of over 20% pa for the next couple of years and a current PE of under 10, I brought a few.
My thoughts on the stock are posted here:
http://shareidea.com.au/idea/20160101/rxprxp-services-limited

[DarkHorse]

Thanks noodles. Do you have any thoughts on the competence of their management (particularly from point of view of someone in IT)? I see that as particularly important with 'roll-ups' for obvious reasons.

[noodles]

Thanks noodles. Do you have any thoughts on the competence of their management (particularly from point of view of someone in IT)? I see that as particularly important with 'roll-ups' for obvious reasons.
I have not met management. Suggest you watch the video here:
http://rxpservices.com.au/alan-kohler-talks-acquisitions-and-growth-with-rxp-ceo-ross-fielding/

They have acquired specialised 'in-demand' services (which I like). So I don't consider it as a roll-up.

[DarkHorse]

Thanks again noodles, you're a star. Have a much better feel for the philosophy of the company and rationale behind all those acquisitions now. RF also seems like the kind of 'level-5 leader' (in Jim Collins' language) you want to invest with.

[percy]

Thanks again noodles, you're a star. Have a much better feel for the philosophy of the company and rationale behind all those acquisitions now. RF also seems like the kind of 'level-5 leader' (in Jim Collins' language) you want to invest with.

Yes I too found the interview extremely interesting,and informative.
Thanks Noodles for the link.

[Joshuatree]

I followed a mates idea and bought back in to RXP pre announcement which looks outstanding.
PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01767747)

[DarkHorse]

Revenue up 61% from both excellent organic growth and growth from complementary acquisitions
Margins up 33% with strong operating cashflows.
Excellent management, more acquisition opportunities in fragmented industry and virtually nil debt.
Good outlook " the sector remains very strong".
EPS up 127% PE c10. What's not to like?

Also - as noted on HC - now passed $100m mcap making it a buy option for more small caps funds looking for top operators in each sector.

[percy]

Revenue up 61% from both excellent organic growth and growth from complementary acquisitions
Margins up 33% with strong operating cashflows.
Excellent management, more acquisition opportunities in fragmented industry and virtually nil debt.
Good outlook " the sector remains very strong".
EPS up 127% PE c10. What's not to like?

Also - as noted on HC - now passed $100m mcap making it a buy option for more small caps funds looking for top operators in each sector.
Yes a great result.
I hope Noodles will post his thoughts.?

[silu]

I usually stay away from stocks like these but on closer inspections the numbers all seem to add up and MC seems small compared to them. Got in with a small parcel at 81.5c this morning.

[levin123]

A nice bit of movement here after a couple of stagnant months. No news to come out of the Co. IT services firms still don't fill the market with confidence but maybe we are seeing a push here towards fair value

[silu]

The last few days has seen an increase in share volume with a rising share price which, with my limited abilities, makes me think a re-rate is on the cards. Therefore have picked up some more at 90c yesterday. Don't really have a long-term plan with this one. Basically jumped on the 52 weeks high and ride the wave for as long it lasts.

[Snow Leopard]

You can hold me partly responsible for the increase in share price and volume as I have been buying of late. :t_up:

I decided to buy after noticing an increase in share price and volume. :t_up: :t_up:


Best Wishes
Paper Tiger

[percy]

You can hold me partly responsible for the increase in share price and volume as I have been buying of late. :t_up:

I decided to buy after noticing an increase in share price and volume. :t_up: :t_up:


Best Wishes
Paper Tiger

Bit more effort required please, as the sp was down today .!

[Joshuatree]

I still have resistance buying on increase in vol and s/p; i know they are good indicators to add. I tend to get set early as my first strategy /priority and top up on dips if i have a strong conviction and the trend is still up. Both are good ways of getting to the same place in a good stock. Topping up quick smart on good news also a good way to get in before a price reaction if one has the time to be trawling the ASX announcements frequently.

[silu]

The little dip didn't last too long. Was wondering why the spike today and I just found out that their CEO today has reiterated revenue growth guidance of +10-15% and EBITDA marging of 13-14%.

[levin123]

Cheers silu. Do you have a link to the news article?

[Joshuatree]

Yep very nice. New S/P high 93.5c atm
PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01791263)
PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01791266)

levin; ASX announcements is where its at.

[levin123]

Ah okay thanks, silu's comment came through before the announcement.

If you don't already you should use the ASX app to get push notifications on your phone when announcements in tickers you are interested in are made. You can choose up to 10 at a time.

[Joshuatree]

ASX always releases first; there is a delay of 20 min for most other sources; sill's announcement came out just after the ASX release.

[DarkHorse]

Update repeats FY results. Outlook for profit at "top end of revenue growth guidance of 10 to 15%"

[Joshuatree]

A new 10 year high today hitting $1:t_up:. Hope it holds

[silu]

HY out: Highlights:
H1 FY17 key highlights
 Revenue up 26% to $70.6 million (H1 FY16: $55.8 million), driven by strong growth in digital
 EBITDA of $9.2 million, up 31% (H1 FY16: 7.1 million); EBITDA margin of 13.1%
 EPS up 35% to 4.2 cents
 Continued growth in operating cashflow, up 39% to $7.4 million (H1 FY16: $5.3 million)
 Interim dividend of 1.5 cps fully franked (H1 FY16: 1.00 cps), payable 4 April 2017

Seems like a very good result which makes the weakness over the last few weeks a bit puzzling. Thoughts?

[Joshuatree]

Looks like another great result to me but can't remember mkts expectations. Very confident outlook re FY. Div up 50%.



Commenting on another set of great results, RXP Chief Executive Officer Ross Fielding said:
“The RXP team has again produced a very strong set of results over the first half of FY17. Our team has againworked hard, delivering growth across all metrics, and we remain on track to deliver at the top end of our initialFY17 revenue guidance. The RXP story continues to grow and mature and we have been able deliver terrificoutcomes for our clients.
“The ongoing evolution of digital technologies continues to provide RXP with a platform for strong growth,with project-based, outcome-focused work driving the business forward. Our focus on ‘design thinking andinnovation’ has resulted in new client and project wins, including a number of ‘cross practice’ digital projectwins during the half. It’s pleasing to see that we have been able to maintain the evolution and expansion of ourspecialisations in order to meet the changing demands of clients.
“We are really excited about the RXP ‘Experience Hub’ that recently opened in January, with clients alreadyleveraging our ‘design thinking’ capabilities. By providing an innovative, user-friendly environment for ourclients to work with us, we are able to better understand their needs and provide the right customised solutions.
“We have also been able to implement a range of people initiatives including Diversity@RXP (which isfocused on building a diverse high performing team), partnering with BeyondBlue (to provide resiliencetraining for our staff), and development of new leadership coaching programs (focused on building leaders ofthe future). By focusing on our people, we aim to drive long term growth and client satisfaction.”

[silu]

With their FY guidance on the top of their +10-15% expectations and EBITDA margin of 13-14% their PE seems ridicously low for their growth (and they are paying a dividend). Probably getting a little bit dragged down by the whole sector. Very happy to continue to hold RXP.

[percy]

I only had a small holding brought at 55 cents,so doubled up at .9750 cps.
My buying is the cause of the weakening sp.!
eps growth of 35% compared with current PE of 12.37,and paying a divie .!

[Snow Leopard]

I now own nearly twice as many as I did when I last posted.

This does look to be a somewhat undervalued company.

Best Wishes
Paper Tiger

[Entrep]

Smashed again today. Anyone game enough to break the cardinal rule and average down?

[percy]

Nooooooooooooooooooooooooooooooooooooooooooo.

[Snow Leopard]

I don't usually quote P/E ratios but this is definitely a growth share and it now on a historical P/E of 11.6 and forward P/E of 10.1 or lower by my guess.

I have a current value of $1.100 and a one year forward value of $1.181.

Hopefully Mr M will come round to my way of thinking eventually.

Best Wishes
Paper Tiger

[percy]

I don't usually quote P/E ratios but this is definitely a growth share and it now on a historical P/E of 11.6 and forward P/E of 10.1 or lower by my guess.

I have a current value of $1.100 and a one year forward value of $1.181.

Hopefully Mr M will come round to my way of thinking eventually.

Best Wishes
Paper Tiger

Usually does.!..

[Entrep]

Down 20% now from the high on the announcement day. Getting smashed and looking very week. Definitely fundamentals (good) vs technicals (very bad) at odds here!

[Snow Leopard]

I can see nothing fundamentally wrong with this company and for the moment I am willing to ride out the 'irrationality' of the market.

Best Wishes
Paper Tiger

[DarkHorse]

Couldn't agree more!
Bizzare market. Has anyone set up a fund to short every ASX smallcap stock just prior to results announcements?

[Entrep]

Well below 50,200,30,120 EAs now and technically looking even worse than before. Curious if anyone has sold out or still holding on?

[percy]

Well below 50,200,30,120 EAs now and technically looking even worse than before. Curious if anyone has sold out or still holding on?

Please don't tell anyone,but I am still holding.!

ps.I can remain solvent longer than the market can stay wrong...lol.

[Snow Leopard]

The slide is a worry is it not ?

But if there is something up with the company, I am in the dark about it.

So far I am keeping the faith whilst sitting on a reasonable % loss on my recent activity here.


Best Wishes
Paper Tiger

[Joshuatree]

Smashed again today. Anyone game enough to break the cardinal rule and average down?

Not me yet but a friend has done just that. Watching for a solid base which looks like forming now.

[Lizard]

I bought more at 77.5cps. I still wonder if some of the price swings relate to the move into the All Ords - historically, we've seen the market anticipate these moves by grabbing stocks in December and then perhaps softening off slightly around March before and after the actual announcement. For some reason, in this case, it seems to have been a price plunge.

Perhaps this was driven by uncertainty over whether or not it would make the All Ords - at $112m market cap, it must have been pretty close to the "drop out" line, given that Pulse Health and Salmat (at $117m - $118m) are dropping out. If this is the case and its inclusion has been a surprise to those who anticipate these things, then perhaps we will see some serious buying over the coming week or so. However, I'm not sure whether there are any funds that actually track the All Ords, so not sure how much of a driver it is.

Course of trades still looked a bit like more selling than buying yesterday.

[DarkHorse]

Still cheap as chips! CEO and Director Ross Fielding bought another 100 000 shares very recently.

[Carpenterjoe]

Suppose holders are pleased with yesterday's announcement.

[percy]

Suppose holders are pleased with yesterday's announcement.

Yes a very positive announcement with this year's revenue growth to be at the top end of the +10 to 15% guidance,and EBITDA at 13-14%,and full year 18 to be the same.
Note the eps growth is now higher than the current PE of 10.45.and they are paying a reasonable divie.Forward PE 8.?

[DarkHorse]

Indeed, looks great value on PEG. Than there's the strong balance sheet, solid track record of revenue growth and positive medium term outlook, sector with growth opportunities, smart credible founder management with large holdings and recent insider buying (both CEO and now independent director). A lot to like about RXP at this price!

[DarkHorse]

Down on PIE selling 900K to just below 5% SSH threshold. Any thoughts?

[silu]

RXP is showing some life in the lead up to its FY announcement next month. Looks as if the market irrationality is over.

[Snow Leopard]

Hope so - I have been incredibly faithfully to this share for ages - but I am still underwater until it hits $0.925 :(

Best Wishes
Paper Tiger

[Entrep]

Yep, great to see this getting closer to proper valuation. Have had to be patient but once it reaches my TP I will definitely be placing a stop loss in (and sticking to it this time).

[silu]

What are your guys views on valuation? My own little calculations makes me think this is worth now $1.15 and with 2018 forecasts closer to $1.40.

[Snow Leopard]

What are your guys views on valuation? My own little calculations makes me think this is worth now $1.15 and with 2018 forecasts closer to $1.40.

Just need that extra half cent to recoup the brokers fees and anything else is pure profit.

I have a value of $1.178 today and $1.267 this time next year based on a few years of moderate [10% pa] EPS growth.

Best Wishes
Paper Tiger

Disc: I reserve right to be have been pessimistic in my outlook.

[percy]

Just a few weeeks to go before the results are announced for a number of stocks I hold.
At present time I am having the usual doubts about my "high conviction" stocks,which include AQZ,ITD,KKT,LOV,PGC,and RXP.!!
As for my specs?.................... I really live in hope....lol.
Two weeks of shear panic coming up, as I try to keep up with all the announcements.

[Entrep]

Strong buying lately fellas, I think we have good news incoming

[silu]

Trading halt for proposed equity raising and acquisition.

[Joshuatree]

RXP has been a bit of a damp squib in my portfolio unfortunately. Still in the black from my 70c av buy quite sometime ago but expected more .Will hold for FY and decide then.

[percy]

A lot of reading to do,before I decide whether or not to take up my rights.
HC said the capital raise is $18mil at 80 cents.That will be interesting along with the annual result.

[Entrep]

How do you know there will be a rights issue? Could be 100% placement. I'm annoyed I didn't sell out at 90c now.

[percy]

How do you know there will be a rights issue? Could be 100% placement. I'm annoyed I didn't sell out at 90c now.

I don't know.

[Joshuatree]

I assume this is correct

"Melbourne technology and digital services company RXP Services has agreed terms to buy Sydney creative agency The Works, sources told Street Talk on Tuesday.
It's understood RXP will pay $25 million upfront, with more available to The Works' vendors under a two-year earn out agreement.
The deal valued The Works at eight-times earnings, and is expected to be accretive to RXP Services on an earnings per share basis.
RXP is seeking to raise $16.9 million at 80.5¢ a share to cover the acquisition.

Shaw and Partners kicked off the deal on Monday night"

[Joshuatree]

Here is the softener ahead of cap raise
Download Document 432.44KB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSTYO5Aq4y BaZsu9pke92GA%3D%3D)

[percy]

Here is the softener ahead of cap raise
Download Document 432.44KB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSTYO5Aq4y BaZsu9pke92GA%3D%3D)

So far the acquisition makes sense to me.
Looking forward to more details.

[silu]

This all seems very positive to me - Didn't need to raise capital on market.

[Joshuatree]

Cap raise @ 80.5c. Higher margins. The Works has a higher t/o per employee. Seems to have good synergies but what do i know. Margin of error for good execution? PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01880503)

[Joshuatree]

Don't want to put more funds in to the cap raise atpit and the earnings are at the lower end ,(11% of the 10 to 15% guidance ). management said upper end; i have read . So have sold and building my warchest of cash which i feel is prudent for my situ doing at the mo.

[percy]

On on a day of indecision I made some very big decisions.?
With RXP's 2nd half not meeting expectations and thinking they may have paid plenty for The Works, I first of all sold half my holding,then the balance of my holding.

[Entrep]

it finished today at highs so I am holding for now. will be exiting pronto if any weakness in the sp though.

[Snow Leopard]

SP down 12% to $0.77 after the ASM, whether this because of, or in spite of, page 10 of the presentation (pdf) (https://stocknessmonster.com/news-item?S=RXP&E=ASX&N=480017) I know not.

Best Wishes
Paper Tiger


Such is investing :ohmy:

[DarkHorse]

Good point - perhaps that was the CATalyst?

[silu]

I sold half of my holding back in August. Didn't see sense in swimming against the industry tide at the moment despite a positive outlook and trading at a PE almost too low for their growth.

[silu]

Empired EPD down 17.4% so far today on no news. Someone is really exiting the sector in a huff. Luckily sold all EPD for a modest profit last month.

[Snow Leopard]

Empired EPD down 17.4% so far today on no news. Someone is really exiting the sector in a huff. Luckily sold all EPD for a modest profit last month.

Another of my ASX holdings is down nearly 10% today and they are not even holding their ASM !

Best Wishes
Paper Tiger

[Snow Leopard]

Last year when I sold, at a loss :(, my RXP, a fat paw typo saw me left with 20 shares (apparently there is no minimum holding size on the ASX).

The full year was released last week and seems to have been mildly well received by the market with the SP putting on 10% or so.
They appear to have repeated earlier statements that the worst is behind them, the present is on track, the future is looking rosy and they expect to do better and better.

But to cut a long story short I am considering at least doubling my holding in them :mellow:.

[percy]

Last year when I sold, at a loss :(, my RXP, a fat paw typo saw me left with 20 shares (apparently there is no minimum holding size on the ASX).

The full year was released last week and seems to have been mildly well received by the market with the SP putting on 10% or so.
They appear to have repeated earlier statements that the worst is behind them, the present is on track, the future is looking rosy and they expect to do better and better.

But to cut a long story short I am considering at least doubling my holding in them :mellow:.

"Very well positioned for 2019".
Triple your holding.!!!>>>>>>>>>>>……..lol.

[Snow Leopard]

It has come to intention that the SP has been galloping along the last few days.
Good results due?

[silu]

It has come to intention that the SP has been galloping along the last few days.
Good results due?

Noticed the same. From 45.5c to 55c in a week is quite the run. My small parcel is still in the red though. Result should be out Friday or early next week the latest.

[silu]

Glad I sold out at 54c at a considerable loss. In hindsight a good thing - a new trading update and shares down nearly 20%

[Snow Leopard]

Believe or not, I personally don't, but I seem to still hold some of these things.

SP has been on a nice gallop up from 20c in March to 37c yesterday (but was 55c last year).

Results out and ignoring the impairment they did an EPS of nearly 3.5c and dividends for the year will be 3.5% ( nearly 10% after tax ! ).

This is worse than last year but next year will be great, now where have I heard that before?

Definitely DYOR on this one.
https://www.ephotozine.com/resize/forum/10796/snow-leopard-cub-scenting.jpg?RTUdGk5cXyJFCwsPVANtcQlnYF8JERFaGwJRN Qh6SlYUAEw1cmsCdg1hAWoxXFNGLSI=

[Snow Leopard]

Capgemini putting us long suffering shareholders out of our misery for $0.55.

Not one of my most successful long term investments. :mellow:

https://stocknessmonster.com/announcements/rxp.asx-3A555111/

[silu]

Just saw it. Made my sales at 86c and 50c an astute decision.