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Thread: FXL Flexigroup

  1. #16
    percy
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    TJ.
    Thank you for filling in the gaps for us.
    FPF.If they had not paid too much for it, someone else would have brought it,because it was a great company.

  2. #17
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    Quote Originally Posted by percy View Post
    TJ.
    Thank you for filling in the gaps for us.
    FPF.If they had not paid too much for it, someone else would have brought it,because it was a great company.
    Reassuring to hear your thoughts on FPF... onwards and upwards till June 22!?
    Aussie GDP data tomorrow, consensus is 0.1% growth, some (like NAB) are even saying negative... at 0.1% or above will be considered a 'job well done' by me, and hopefully the market - should benefit FXL (and vice versa)

  3. #18
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    FXL down big time at open... even at current price of $1.60, trading at a PE of just 6.6 (yes, six point six!)... yet has grown profit every year since listing... if you think SUM other stocks have been hit a bit harder than they should have, look no further than FXL!
    Likely due to tax loss selling, and (hopefully) not related to this Thursday's update... tempting to go into an xxxl position
    (the 8 - 9 or so cent dividend likely to pay this full year is attractive in itself... regardless of the stupidly low PE)

  4. #19
    Antiquated & irrational t.rexjr's Avatar
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    Quote Originally Posted by trader_jackson View Post
    FXL down big time at open... even at current price of $1.60, trading at a PE of just 6.6 (yes, six point six!)... yet has grown profit every year since listing... if you think SUM other stocks have been hit a bit harder than they should have, look no further than FXL!
    Likely due to tax loss selling, and (hopefully) not related to this Thursday's update... tempting to go into an xxxl position
    (the 8 - 9 or so cent dividend likely to pay this full year is attractive in itself... regardless of the stupidly low PE)
    And I thought I did well picking up a parcel at $1.64 a couple of weeks back. Might have to go find some more spare change. It doesn't seem that long ago I was happy to get a small parcel for $2.20. Sometimes the Aussie market baffles me!
    Last edited by t.rexjr; 19-06-2017 at 12:14 PM.

  5. #20
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    Quote Originally Posted by t.rexjr View Post
    And I thought I did well picking up a parcel at $1.64 a couple of weeks back. Might have to go find some more spare change. It doesn't seem that long ago I was happy to get a small parcel for $2.20. Sometimes the Aussie market baffles me!
    Do others know something we don't about Thursday's announcement? Seems too irrational otherwise doesn't it...?

  6. #21
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    Quote Originally Posted by dela47 View Post
    Do others know something we don't about Thursday's announcement? Seems too irrational otherwise doesn't it...?
    Maybe all this talk of sn impending recession and the high household debt levels of Australian households is putting the jitters into the likes of Flexigroup
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  7. #22
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    Hey TJ, what figures are you using for gearing ratios being conservative?

  8. #23
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    Quote Originally Posted by t.rexjr View Post
    And I thought I did well picking up a parcel at $1.64 a couple of weeks back. Might have to go find some more spare change. It doesn't seem that long ago I was happy to get a small parcel for $2.20. Sometimes the Aussie market baffles me!
    The "June tax-loss selling" phenomenon has that effect on a lot of stocks. The tricky bit is to sort out those with the potential to recover once that selling pressure is out of the way.

  9. #24
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    Quote Originally Posted by winner69 View Post
    Maybe all this talk of sn impending recession and the high household debt levels of Australian households is putting the jitters into the likes of Flexigroup
    You would have thought that other financials would also suffer by 7%, yet nearly all of them are up (banks etc), a very similar company (some say) Thorn Group Limited is down just 1.5%... something doesn't add up, and yes dela47
    , I suppose the nightmares of 31 May's announcement (which was meant to be very much one off impacts) last year may also be causing some to jump out at any price

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    Quote Originally Posted by Joshuatree View Post
    Hey TJ, what figures are you using for gearing ratios being conservative?
    You are probably looking at the 82% figure, as many often do, including like the market itself (extract from page 7, half year report 16)

    "FlexiGroup maintains a conservative funding strategy; to retain multiple committed funding facilities for all scale businesses, combined with an active debt capital markets presence. The Group currently has revolving wholesale debt facilities in place with five Australian trading banks, plus numerous institutional investors in its Asset Backed Securities (ABS) program.

    At balance sheet date the Group had $2,369.6m of wholesale debt facilities, with $492.3m undrawn and no indications that facilities will not be extended. The majority of the wholesale debt facilities ($1,978.1m) have no bullet repayment on maturity, with outstanding balances repaying in line with receivables and customer loans if availability periods were not to be extended. These facilities are secured against underlying pools of receivables and customer loans. The remaining wholesale debt facilities either have a soft bullet or have sufficient lead time for re-extension when approaching maturity.
    The Group’s $187.5m of corporate debt facilities, increased to fund the acquisition of NZ Cards, were drawn to $177.0m at balance date. These facilities are secured by the assets of the Group, and with a maturity
    date in 2019."

    So really, Flexigroup itself only has $177mm of debt, likely to produce min 90m annual profit (apparently - will see this thursday!)... even with a 'terrible' market cap of less than 600m (more than 2x lower than a couple of years ago) gearing ratios for the group, by any metric, are really very conservative, as they have mentioned, and I believe.

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    Quote Originally Posted by trader_jackson View Post
    You would have thought that other financials would also suffer by 7%, yet nearly all of them are up (banks etc), a very similar company (some say) Thorn Group Limited is down just 1.5%... something doesn't add up, and yes dela47
    , I suppose the nightmares of 31 May's announcement (which was meant to be very much one off impacts) last year may also be causing some to jump out at any price
    https://hotcopper.com.au/resources/a.../#.WUdwg7puLvQ

    "Australia stocks lifted by financials..."
    You wouldn't have thought this was the case with flexi dropping like a stone?

    Also saw consumer confidence in NZ, which now represents 40% of FXL's profit, is looking pretty good... you would have thought this would have helped the share price?

    Crazy times
    Last edited by trader_jackson; 19-06-2017 at 05:56 PM.

  12. #27
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    So they had a bit if profit downgrade last month

    From Cash NPAT range of $90m to $97m down to $90m to $93m .....(last year $97m so less this year!)

    Is this correct t_j?

    Just assessing how much a bargain this
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  13. #28
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    Quote Originally Posted by winner69 View Post
    So they had a bit if profit downgrade last month

    From Cash NPAT range of $90m to $97m down to $90m to $93m .....(last year $97m so less this year!)

    Is this correct t_j?

    Just assessing how much a bargain this
    Yes, with 2m of that due to a timing of cash flow (this was mentioned this could occur which is why they gave the large 90 to 97 indication)

    First half 17 profit was up 18%, although on a per share basis was up 2%... you wouldn't think that because the share price is at a 5 year low although must be a weak 2nd half because if they were to produce another 47.5m that would be above their indication (being $95m) and that would mean a PE 6.3, nearly to good to be true for a so called (or at least previously called) growth company and former market darling.

    Yes it will be lower than last year due to 9m (now 11m due to extra 2m of as mentioned above) in growth initiatives, not (really) because their divisions are all going backwards (see below screenshot)... chances are, 'underlying' profit is likely to hit another record (hopefully well over 100m)... Flexi afterall is meant to be a growth company, hence the recently reduced payout ratio (of 30 - 50%)... crazy in 2013, when the share price was nearly $5, FXL traded on a PE of over 20 and had a 1.3b market cap

    From Annual Results Presentation 2016.JPG
    Last edited by trader_jackson; 19-06-2017 at 05:58 PM.

  14. #29
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    Some say the drop from 1.70 to 1.595 ($1.56 at one stage) was due to do a broker downgrade... to $1.85 - market sems to have missed the 8 because it is still actually a premium of over 15% - and to top it all off, the broker that downgraded them still thinks flexi is cheap (at $1.70)

    http://www.fool.com.au/2017/06/19/fl...ker-downgrade/
    Last edited by trader_jackson; 19-06-2017 at 06:02 PM.

  15. #30
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    I'm glad you can understand all that

    My past makes me a bit wary of outfits that use SPVs

    Maybe the business is all too complicated to understand and that could be a reason for punters losing interest. If so hard to overcome market perceptions and FxL may always be ridiculously undervalued.
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

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