Xro - xero

**artemis** · 02-11-2013, 11:07 AM

Quite a bit about Xero's valuation in the following NBR article, or more accurately why analysts can't determine a valuation. The article is temporarily available to all readers. (Part of their Weekend Review which takes some articles out from behind the paywall for a couple of days. They have a Saturday and Sunday email you can subscribe to which shows what's freely available for the weekend.)

http://www.nbr.co.nz/article/tech-bu...view-dw-148037

**artemis** · 02-11-2013, 11:11 AM

And more in the NBR about cloud computing, bodes well for NZ tech companies:

"Cloud computing is the single most disruptive technology facing all organisations today. It is real and it is here; 100% of New Zealand organisations intend to invest in cloud-based services in the next 12 to 18 months according to the recent IDC Cloud Survey (IDC Asia Pacific Cloud Survey - April 2013)."

http://www.nbr.co.nz/article/tech-bu...view-dw-148037

**Stranger_Danger** · 02-11-2013, 02:37 PM

Originally Posted by moosie_900

funds flowing in from everywhere for massive valuations, a new tech company with FY14 revenues of ~$350,000 mCapped at $75M, no one can see proper valuations and is merely chasing money because the stock goes up up up, tons of new tech companies looking to list, merely mentioning SaaS, cloud, Xero means massive gains. sounds like were entering the last stages of the bull run.

while caution is very much needed, there is PLENTY of money to be taken out of the market from the fools. if you buy on dips and sell as soon as a top appears, you can lock in big profits. I have managed to make huge gains in the past 3 weeks by buying and selling with no emotional attachment. sure, stocks have gone higher thsn my sell price, but I am more than happy I even have profits and don't look at what I could have pocketed had I stuck with it. the key here is capital protection, and if you are not comfortable doing this and dont constantly watch the market then stay well away!

hope everyone makes plenty of money in the coming months

I have no intention of trying to make money from this bubble. Too hard, and I'm not smart enough. Worse, if I was initially successful, I'd convince myself I WAS smart enough. And that is where the "fun" really starts.

My last buy was Meridian. The highest share on my watchlist is Troy Resources, though I'd prefer to pay about 90 cents.

In addition, I've begun selective trimming of positions, many of which were bought in 2008/2009 and are showing 10-20 fold gains.

Most of these aren't anywhere near bubble territory, but are well above their long term average price levels when measured by average P/E, P/S and DY.

In terms of paying billions for losses, nope. Someone else can do that.

**JohnnyTheHorse** · 02-11-2013, 06:16 PM

Definitely a bubble in my eyes, as I have stated before. GEO has confirmed this. When the bubble pops there are going to be some serious issues for these companies, as they are not profitable and will struggle to raise anymore capital.

There is still money to be made on these, but ultimately most of these tech companies are going to end in tears (Xero will probably eventually be successful, but not before the SP gets destroyed). If you hold these companies and are buying at these prices then you are simply the bigger fool - don't let your emotion get into this and do some SENSIBLE fundamental analysis. Look to the past and you will see what happens when these things pop... no one ever learns do they.

**Dej** · 02-11-2013, 06:47 PM

Originally Posted by JohnnyTheHorse

Definitely a bubble in my eyes, as I have stated before. GEO has confirmed this. When the bubble pops there are going to be some serious issues for these companies, as they are not profitable and will struggle to raise anymore capital.

There is still money to be made on these, but ultimately most of these tech companies are going to end in tears (Xero will probably eventually be successful, but not before the SP gets destroyed). If you hold these companies and are buying at these prices then you are simply the bigger fool - don't let your emotion get into this and do some SENSIBLE fundamental analysis. Look to the past and you will see what happens when these things pop... no one ever learns do they.

First time posting on this thread, but couldnt agree more!

**lastmoa** · 02-11-2013, 07:03 PM

Originally Posted by JohnnyTheHorse

Definitely a bubble in my eyes, as I have stated before. GEO has confirmed this. When the bubble pops there are going to be some serious issues for these companies, as they are not profitable and will struggle to raise anymore capital.

There is still money to be made on these, but ultimately most of these tech companies are going to end in tears (Xero will probably eventually be successful, but not before the SP gets destroyed). If you hold these companies and are buying at these prices then you are simply the bigger fool - don't let your emotion get into this and do some SENSIBLE fundamental analysis. Look to the past and you will see what happens when these things pop... no one ever learns do they.

I guess I was a 'fool' when I was topping up my holding at $7 then $15 then even $18, when many posters were making similar remarks.
Whilst I agree some tech companies SP are inflated do not compare companies that have a proven map for revenue with the .com boom/bust. Sure do some fundamental analysis but also do some study on IT/SAAS and what Xero is trying to do here. Traditional fundamental analysis is difficult to get a true picture from, imho. If (and yes, that is an if) do achieve its goal (and more) then we will see same message postings as yours as the SP moves upwards.
If Xero just concentrated on NZ/Aust it would be a profitable company - but, as a shareholder, I am pleased that they are not.
The bubble I see is the crazy house prices in Auckland and actually any main center in NZ. Lordy, lordy. 8-)

**Stranger_Danger** · 02-11-2013, 07:07 PM

Originally Posted by dellow

If Xero just concentrated on NZ/Aust it would be a profitable company - but, as a shareholder, I am pleased that they are not.
8-)

Fair point, and one I've seen a few times - they could make a profit if they chose.

This leads to a question for you. If they did just focus on NZ and Australia, what do you believe the current net profit would be, and what would you capitalise such a company at?

**Toasty** · 04-11-2013, 10:10 AM

Between reading this thread and the PEB thread and then the negativity on the NBR, its enough to make me want to cash up and buy Bonus Bonds. If only I wasn't so greedy.....