Xro - xero

[Toasty]

I remember Rod saying something like the churn rate was less than the death rate of businesses. I am not exactly sure what that means and I am pretty sure that the death rate of SME's is pretty high so maybe not the best thing to remember?

[CJ]

I remember Rod saying something like the churn rate was less than the death rate of businesses. I am not exactly sure what that means and I am pretty sure that the death rate of SME's is pretty high so maybe not the best thing to remember?

THe death rate for new businesses is high but not all new customers would be new businesses. ie. existing businesses who migrate from MYOB would have got through the risking growing pains.

[lastmoa]

Interesting that 2 out of the 3 Director's just made SSH statements declaring quite substantial disposals a few days after they tell there shareholders they should be " not be putting on the brake, but going hard on the accelerator"...

I would not call disposing of a few shares as a reflection on the future outlook. We all take risk off the table as various times/levels.

[CJ]

http://allthingsd.com/20130604/sales.../?mod=atdtweet

Paying $2.5b to increase revenue by $120m if I read it right

[Stranger_Danger]

That should be good for another buck to be added to XRO's undervalued share price.

[CJ]

Further Research from their stats:

Year Ended December 31, 2012 2011 2010 2009 2008
Revenue $ 292,272 $ 207,493 $ 134,267 $ 95,443 $ 72,342
Comprehensive income (loss) $ (21,029) $ (36,383) $ (12,107) $ (61,172) $ 3,559

So not that impressive to justify a US$2.5B price. Salesforce obviously think their technology is something that they are currently missing.

Expect a tweet from Rod today referencing this and pointing out that Xero is on the right track.

[Toasty]

I am now waiting for Intuits $30US offer by close of business today. I may take the rest of the week off if that comes through....

[Stranger_Danger]

Moosie - not quite, this kind of insanity is what guaranteed the dotcom bubble would burst in a spectacular way.

However, there was a decent lag time, as there may well be here.

6 more months to a year of this wouldn't surprise me, but like the dotcom boom (which I made major money from, by investing in unloved, ignored stocks at a P/E of 5 whilst everyone was distracted) I think I will be skipping the ride.

[lastmoa]

With SLI approaching $2.25 from a mere 3 days of trading, tech is most definitely in right now. I guess the question is, how long can it all last?

Some tech stocks will last and some won't. The one's that last will have a proven business model for revenues and be/stay innovative leaders in their areas. Don't put all tech's in the same basket. Some of the SAAS company's out there are going to surprise many of the 'dot com/chicken little' guys out there in the near future with their SP's.
Some tech stocks are bottomless pits for investor's cash - got to DYOR and decide which are which. With research I mean not just fundamental/technical analysis, but properly understand IT and where it is headed.

[Banksie]

Saw this side bar the other day and thought it might be useful when evaluating tech stocks. As I see it DIL pass the Fund Manager test - but I am not so sure about XRO.

What Fund Managers Don't Want to See

Investors who take a bottoms-up approach often talk about the importance of meeting with executives and seeing company headquarters and facilities for themselves. "We want to find good management, and you can't tell that from a glossy annual report," says Richard Cook, manager of the Cook & Bynum fund (ticker: COBYX). "You have to find ways to get a window into their world."
What are they looking for? In a nutshell: professional, but not ostentatious, companies run by down-to-earth executives who know their businesses and are respected by their employees. Now, here's what they don't want to see.

Fancy cars and vanity plates: "What kind of car the CEO drives is a great indicator of their approach to life and management," says Brian Frank, manager of the Frank Value fund (FRNKX). Ditto goes for over-the-top corporate headquarters -- complete with expensive art, lush gardens, and koi ponds -- as well as executives wearing bling-bling watches, rings, and cuff links.

Pictures with famous people: "It's a declaration of victory, which we don't like to see as investors," says Mitch Rubin, manager of the RiverPark Large Growth fund (RPXFX). He'd rather see family photos or pictures from company events than snapshots of the CEO with professional athletes and celebrities.

Ping-pong tables and other gimmicks: Having worked as a software engineer before moving into investing, Kim Forrest, an analyst with the Fort Pitt Capital Total Return fund (FPCGX), understands what drives engineers and other creators -- and it's not chair massagers or 24-hour frozen-yogurt bars. "That's just gilding the lily," she says.

Charitable causes that don't add up: Investors are all for corporate giving if it aligns with the company mission and enhances the brand, but box seats at the symphony for the C-suite or big gifts to the top dog's favorite cause "is giving away shareholder money," says Cook.

Long-distance leaders: "The management team is the body and soul of the company," says Rubin, who bristles when he hears about a CEO who doesn't live in the same city or state as the company headquarters. "If they set themselves apart, have different rules and different offices, it speaks of someone who is more about self-aggrandizement than the success of the business."

Clueless CEOs: Keith Trauner, co-manager of the GoodHaven fund (GOODX), recalls a company meeting where he asked the CEO to talk about his four largest customers. "He deferred to the CFO," says Trauner, who, needless to say, wasn't impressed.

Too much talk about the stock: John Buckingham, CIO of AFAM Capital, jokes that when companies come calling, it's time to sell the stock. "Frankly, we'd rather the managers ran the business than run around the country promoting the stock," he says. Regardless of where fund managers meet executives, "anything that sounds like they're selling their stock makes us suspicious," says Cook. "We much prefer management to be focused on their customer and let us figure out if their stock is cheap."