OCL - Objective Corporation Limited

[robbo]

Hi thereslife,

Really terrific to hear from you thereslife !!

Also did you look at the Depth on PPR--Penfolde Buscombe ??...Tested and achieved for the first time $1.50...today...(wednesday)29/09/04

Thereslife, I feel that the article in the AFR yesterday(page 35) re. OCL and the IT sector, did not hurt a bit...OCL tends to hit a bit of resistance, at approx 90 cents, but I belive the Market is sort of looking for a New Leader to replace Reckon, and with profit now at #$5.4 Million compared to Reckons miserly #$3 million, I predict OCL will be the next darling of the LIC's and other fundies, who like to have a percentage of their funds in the Tech sector...

Basically OCL's numbers are beginning to looking simply too good to ignore any longer. "Runs on the board" are impressive for OCL. There, EPSG's going back now 4 years and the year on year profits, , roe's going back now ++ 3 yrs of north of 55% ROE !!; , the sustained and improving profit margins of 25% ++ and increasing profits/earnings year on year, all demonstrate a very disciplined/competent financial mgt Team, great sales distributn network and successive major Govt Dept/large organiztn Tender winning Software Product offering at OCL..

Also,talking Great Shares on The Radar: must be impressed with Dimebag's pick on Creditcorp...what an excellent Share Investment CCP is, and very nice monthly S/P increase indeed for holders of CCP []...Glad also to see Dimebag get out of ION before that ship goes down...[^]

As an aside, also check out the depth and the numbers on HHL...hmmm quite impressive methinks..

And a final musing....Astron (ATR) is very very DUE for a BIG BIG surge very soon...within a week -ten days(maximum) IMO, and Astron will JUST keep going up and up through the next Month or two IMO[8D]

Kind Regards threselife ,

Robbo.

Disclaimer:
The above comments are made on a totally "without prejudice" basis Furthermore these comments are only the personal opinions of the author, and do not represent any form of Financial Advice of any type whatsoever. These comments and are NOT warranted for their veracity, or authenticity; or for being at all reliable. Please do your own independent Research, as always.

Kind Regards,
Robbo.

quote:Originally posted by thereslifeafter87

Robbo,
Looks like your prediction could be on the money.. Check out the bid depth building up!

I sold my OCL last week, as I decided I had absolutely no idea what they would earn this year, and no way of discovering that!

If they had been valued somewhat more conservatively, I might have been prepared to take a risk, but at current levels there is just not a significant margin of safety in my opinion.

The problem with OCL is that they may not grow earnings consistently over time, because the business relys on the constant winning of new contracts.

I may end up with egg on my face if the share price continues to head North, but for me this is the right decision whatever the SP does.

If I can't predict with any certainty what a company will earn next year and the year after, then I need a highly conservative valuation to justify investment.

OCL simply no longer fits my criteria.

[thereslifeafter87]

Robbo,

I try not to focus too much on what an sp is going to do in the near future. Crystal ball gazing is not for me, though I am guilty of it from time to time.

You are right, OCL do have an impressive track record. Problem is they are a one-product company, and their earnings are non-repeat.

The better they do, the worse their position really... The more sales they make, the less customers they have available to sell to.

Their earnings were hugely impacted by the $10 million (or was it UK pound?) contract win with the Scottish executive. I would guess that they would be unlikely to repeat this kind of win every year.

There is no way of knowing what they will earn this year, let alone next year and the year after, and at 22x earnings, there is a lot of future growth built in.

You may be right, they may be the next market darling - and I didn't know about the article, I'm sure that will drive up the SP in the short term - however, I try and focus on the fundamentals rather than trading on market sentiment.

Your input is much appreciated though, and I hope your call on ATR proves correct!

[thereslifeafter87]

Also,

CCP has been an excellent investment! I'm up over 60% in about 6 months!

However, any increase in its PE ratio from here would probably be to overvalue the company. This isn't to say its not still attractive... There will be continued EPS growth I would say.

[robbo]

OCl puts out excellent Report, and smashes 90 cents, going through 93 cents before profit taking!![][]
October for the magical $1.00 mark ?? : methinks, Yep, its a cert in my opinion, and we can "put down our glasses"... and therefore go and enjoy a nice cold well earned schooner of our finest Brew !!: preferably two..

regards,
Robbo.

quote:Originally posted by thereslifeafter87

Also,

CCP has been an excellent investment! I'm up over 60% in about 6 months!

However, any increase in its PE ratio from here would probably be to overvalue the company. This isn't to say its not still attractive... There will be continued EPS growth I would say.

[thereslifeafter87]

Robbo,

It is extremely annoying when you sell a company only to have the shares jump by 15% or so in under a week :-)

However, I stand by my reasons for selling...

Remember that one contract accounted for $10 million of their $26 million of revenue.

Also, they are not paying tax, so effectively EPS (if a full tax rate is applied) would be closer to $.03 than $.04, putting OCL on an historic PE of over 30 at todays prices.

The report doesn't really tell us anything new... They don't break down their revenue receipts between software, and repeat services, so we are left guessing as to how much is repeat...

While I'm pissed about the 15%, My decision is still right based on the info I have even if they jump another dollar. This is definitely a Fisher type company, requiring extensive 'scuttlebutt' to truly be able to value it.

[robbo]

No Bandits at One o'Clock on this one !!

With a name like OBJECTIVE: and given my last post, I think I'll now say: BULLSEYE !! $1.00 in October ..!![][]

Got $1.10 in the periscope as a minimum by month's end, the numbers are the numbers are the numbers...IMHO..
Did everyone also pick up on my thought in HHL on my last post on OCL and in recent posts on PPR..."I feel this train a comin' it's comin around the bend, get on b....."

I thinkl as Eddie would have me say, I will not go for a lifeline, I'll just lock it in"... (actually I've been locked in to HHL for over 5 weeks now, and topped up more today !!)

Hope everyone's well and HAPPY !![8D]

Kind regards,

Robbo.
Disclaimer: The above comments are just the ruminations and reflections of the author; and do NOT represent, or should not be construed as being any form of financial advice.These comments are also said on a totally "without prejudice" basis only, and are not warranted for their accuracy, veracity or reliability. Please do your own independent research as always.
Kind regards,
Robbo.

quote:Originally posted by davidrob

OCl puts out excellent Report, and smashes 90 cents, going through 93 cents before profit taking!![][]
October for the magical $1.00 mark ?? : methinks, Yep, its a cert in my opinion, and we can "put down our glasses"... and therefore go and enjoy a nice cold well earned schooner of our finest Brew !!: preferably two..

regards,
Robbo.

quote:Originally posted by thereslifeafter87

Also,

CCP has been an excellent investment! I'm up over 60% in about 6 months!

However, any increase in its PE ratio from here would probably be to overvalue the company. This isn't to say its not still attractive... There will be continued EPS growth I would say.

[thereslifeafter87]

Its annoying when you know you're right for your own reasons, but the market thinks you're wrong in the short term.
If I'd made my decision to sell 2 weeks later, I would have made an extra 25% on my investment in OCL!

[B)][B)][B)]

[slam]

Looking a bit sick at the mo, depth included[B)]
any reason?
Cheers
Slam

[robbo]

DO NOT SELL IMO--(In my Opinion...the only thing that is SICK IN THE HEAD is Market Sentiment---WHICH OF COURSE IS often(not always--but often)---a "photo-opportunity" TO pounce ON more more more---shares.

As is often said: Nervous/Forced Sellers often hate Fridays---but Canny buyers often say TGIF----Thank God It's Friday !![][]

Those who believe in Efficient Market Theory, like those who believe in the Random Walk Hypothesis.....---are--sighting the Field Evidence, Plainly Bonkers !![]---In my Opinion !!

Which is why.... we Share investors--Investing on Value Fundamentals.....can just get Richer and Richer $$$$$$$$$$$$$$$$$$--[]--yahooo!!

Investing patiently and incrementally; with lovely juicy offerings in Margin of Safety Solid Earnings with Proven Share of Good Proven Business Investments like Objective Corp. (OCL)--again only only only my personal opinion---

*** --- >>>....AND----in the interests of not appearing "Rampy"--- AND NOT FORGETTING TO ADMITTING THAT THERE IS ALWAYS---always---an alternative point of view to be consisdered to this view as expressed by me....; that is to be always listened to and taken account of etc etc etc etc----- [|)]


>>>....When the Great Strong Earnings/High v. high--- Return on Capital Companies who have invested their capital v.efficiently AS measured year on year year(y.on.y) which are Rare Investor Grade Companies--with Great FREE Cash flow--consistently achieved, ....as expressed by Year on Year on Year(y.on.y) High high ROE's---and balance sheet analysis for true meaningful cash flow indicators; increasingly Y.on.y. adjusted pre-tax profits & healthy Profit Margins & increasing annual Revenues....., again y.on. y consistently---

.....>> when such Great Companies sometimes DO fall into our Bargain Buy Price Range !!---like OCL is doing....>>>.... Maybe/Maybe NOT ---...err we might just....um; GAB 'EM BY THE PROVERBIALS !!!!

Kind Regards,
Robbo.
Disclaimer:
The above comments; are only.... my personal views and are not warranted for their veracity, authenticty or reliability. The above comments are said on a "without Prejudice basis" and should NOT NOT be ever taken as being any form of type of financial advice whatsoever.Please, as always do YOUR OWN INDEPENDENT RESEARCH.
Regards,
Robbo

quote:Originally posted by slam

Looking a bit sick at the mo, depth included[B)]
any reason?
Cheers
Slam

[thereslifeafter87]

Robbo,

I would hardly describe OCL's earnings as stable, or the share as having a margin of safety.

One contract last year counted for over 30% of their revenue. Are they going to pick up another contract that big this year? Thats what I would be worried about, thats why I sold.

Its trading on a high PE considering you cannot accurately forecast earnings, or even guess at where earnings are going to be in the next couple of years. You cannot say it has a margin of safety.