Hmmm, a near-enough 20% drop in 2 days... Oversold?
It's only a loss if you sell... time for that hold 'n hope strategy to kick in ;)
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Hmmm, a near-enough 20% drop in 2 days... Oversold?
It's only a loss if you sell... time for that hold 'n hope strategy to kick in ;)
Quote from FYR report May 2007Managing Director Brent Robinson.
At the time of release of our full year 2007 result we projected EBITDA of NZ$32 to NZ$38 million for the 2008 year. This was based on the assumption of an average exchange rate of 70 cents against the US$, we highlighted at the time that the impact of a one cent movement in the exchange rate could have a full year impact of approximately NZ$1.5 million on EBITDA. Should the Kiwi hold at its current rate of around USD $0.76 then our projected EBITDA range would be $27 to $32 million.
Quote from HYR report Nov 2006.... Further improvement in earnings above this target will be dependent on the extent of the normal seasonal dip over the next couple of months.
So there is a 2 month dip over the Xmas period and the $27-$32 million target will probably not be meet now, especially with a $12.4m recorded in RAK best 1/2 of the year.
So they publically blame the $NZ but it seems as this is not the real reason for the below $27M target forecast as the NZ$ is still at 76c.
Some possible reasons from the 2007 HYR report could be
Slow down in cell phone global growth
Current cellular GPS performance is not great and will need to improve before widespread adoption
Demand is expected to ramp up in 2008 although exact numbers are unknown
Strong demand and Rak well positioned
Focus on the increase capacity at reducing costs to maintain competitveness
Previous guidence of $27-$32m difficult to acheive given the $US weakness.
A copy of the Report (PDF) can be obtained ..email to lcr@nzx.com I couldn't see it on the RAK website before. might be there now.
This stock could easily fall a lot more yet.Think about it...PE is still over 40! Fine when the coy is growing quickly but this seems to have stalled with NPAT looking similar to last year.Is ebitda in the $27m-$32m realistic given the first half & US dollar-$20m to $25m looks more realistic.First half usually stronger than Second half.
Actually its the other way around. Second half is stronger than the first. Last year first half was only stronger because they were using a very good FX, the second half was a much worse FX rate.
According to Brent Robinson October/November are their peak months with December/January usually being slow. The reason they were vague last year is that they didn't know what retail sales would be like over Christmas and those sales dictate their Feb/March sales. Retail for GPS is slow Rakon's sales are slow in the run to year end, inverse is also true.
On the conference call they were asked about the range and seemed to me to be saying they expected to hit the bottom end of the range as long as there were no adverse currency movements or unexpected slow down in sales.
I'm still looking at the overall revenue and underlying cost base. Revenue has grown a lot but they haven't been able to translate all that into profit. They try to explain why in the NZX release giving lots of detail but I had to read the damn thing about 6 times for it to make sense.
I'm still pretty disappointed in the result, wondering if that UK/France business was a good buy or not? Get the impression without it the numbers would have been much better (costs of global integration, stock write off, etc...).
Guess I'll just have to wait and see. I guess if they know they're going to miss the target range they'll have to advise the market? I might just ring them and ask that...
I rang but got told their CFO and CEO are away until tomorrow and the other IR guy wasnt there... never mind have to try again later...
Sold out a wee while back over $5.
I ask you all
WHY HOLD a stock that is on a massive p/e and has just revised DOWN its earnings guidance.
plenty more fish in the sea
Like Footsie I exited RAK at around $5.30 after watching the charts like a kahu
The coy was valued very high on what turned out to be a very small profit.
The market info was a bit vague sort of "the big names may buy" to support the PE
The US NZ $ rate was a significant risk
There was also a big technology risk as technology professionals expect each contract to be less and others may catch up
The UK France thing (with the advantage of hindsight) is another risk just now - if production is now moving from France & Morocco to India - may be just too fast, too many time zones, too many translations and cultures for a $5m profit Kiwi coy.
On the other hand smart technology, a lot of shares have changed hands and the PE is now down so keep watching the SP and TA ...
Having dropped about $12,000 on this stock in the past few days, I have more than a passing interest.
Weeks ago I went on the net for a GPS/Chart plotter for my boat and finished up buying a Lowrance System from a New York company. It was less than half the local price. Few days later, got a big SORRY notice to tell me that they were NOT allowed to export Lowrance outside the USA. But - I could buy it and get it sent to a US address etc or they could supply any other make. Finished up with a Standard Horizon Chart Plotter, still half the local price. The unit was made in Italy, not China, for a Canadian firm.
I am intrigued by this "only for sale in US" and all the other commercial stuff that goes on. Why are US sales so important to these firms? Why do we have to pay through the nose for goods that others can get for half the price? It cannot be anything to do with distance or transport costs - I got my stuff here in less than seven days and the all-up cost, including UPS transport and GST was half the local price.
if there is that much profit in this technology, why are the Chinese not leaving us for dead?
it appears insto 's still hoovering stock from small shareholders with short view despite current circumstances and p /e
Steveo
WHy? why are insto's hoovering. They must be dumb.
Long term? How long is long term?
It's like the fund manager who is buying up "cheap" CCP. after the profit warning.
If yuo want similar technology exposure why not buy ARR.asx
Much more reasonably priced relative to their potential.
I could site umpteen more examples of why you should exit companies on high p/es that issue profit warnings.
But hey, its your $$ do with it as you wish