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  1. #1
    ? steve fleming's Avatar
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    Default Kip Mcgrath Education Centres Limited ("KME")

    KME looks pretty cheap given strong growth and earnings outlook on the back of successful restructuring initiatives, business expansion and positive commentary from Directors:
    “The company is budgeting an increased profit in FY 2014 with increased revenue from the major initiatives”.

    $6.6m m/c + $1.2m net debt = $7.8m EV ; so with FY13 EBITDA at $1.2m = 6.5x FY13 EBITDA. [say compared to RDH trading at 14 x FY13 EBITDA]

    Paying down bank debt from their strong surplus cash with all convertible notes now converted, so only $2.2m in bank debt remains (annual saving of $150k in interest).
    Net debt of $1.2m now represents approx 1x EBITDA.

    Given the royalty model, KME just need to sit back and collect the $’s for the bulk of their revenues (as well as provide a few services!)….will also benefit from a declining AUD

    Management expect the high margin on-line tutoring services to scale up to contribute 15% of total revenues over the next 3 years and 50% over 5 years

    http://www.dailytelegraph.com.au/new...-1226758113220

    http://www.theaustralian.com.au/tech...1226754533535#
    Last edited by steve fleming; 06-12-2013 at 08:55 PM.
    Share prices follow earnings....buy EPS growth!!



  2. #2
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    HI Steve,
    I have 50000 of these purchased recently but it took like 2 weeks to get them the liquidity is terrible. Anyway happy to hold.

  3. #3
    ? steve fleming's Avatar
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    Quote Originally Posted by stoploss View Post
    HI Steve,
    I have 50000 of these purchased recently but it took like 2 weeks to get them the liquidity is terrible. Anyway happy to hold.
    Hi SL
    good to know there are others on board!

    There is actually an ice-berg seller at 15c/16c, keeps on reloading....I have been trying to fight it this week, but now have 300,000 and am out of ammo

    so there is an opportunity at the moment to get in at around 15c/16c
    Share prices follow earnings....buy EPS growth!!



  4. #4
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    Quote Originally Posted by steve fleming View Post
    Hi SL
    good to know there are others on board!

    There is actually an ice-berg seller at 15c/16c, keeps on reloading....I have been trying to fight it this week, but now have 300,000 and am out of ammo

    so there is an opportunity at the moment to get in at around 15c/16c
    OK Thanks Steve, keep you posted

  5. #5
    ? steve fleming's Avatar
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    Quote Originally Posted by steve fleming View Post
    Hi SL
    good to know there are others on board!

    There is actually an ice-berg seller at 15c/16c, keeps on reloading....I have been trying to fight it this week, but now have 300,000 and am out of ammo

    so there is an opportunity at the moment to get in at around 15c/16c
    Touched 30c / 31c today, but probably got a little ahead of itself...will probably come back once the excitement fades.

    Still, the big off load at 15c and 16c back in December turned out to be a real gift
    Share prices follow earnings....buy EPS growth!!



  6. #6
    Corporate
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    It looks to me like there are no sellers ( at least in the off market depth)? Might be hard to get any at 15c..

    Looks like a good buy if you can get some.

  7. #7
    ? steve fleming's Avatar
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    Quote Originally Posted by Corporate View Post
    It looks to me like there are no sellers ( at least in the off market depth)? Might be hard to get any at 15c..

    Looks like a good buy if you can get some.
    At close on Friday the seller had from memory about 90k at 15c and 80k at 16c (disclosed).....it always withdraws its offer at end of day....has been doing that for the last couple of weeks....should be back on Monday morning

    I picked up 300k in a number of transactions, and each time the seller automatically reloaded as soon as I bought....so don't know how big the 'iceberg' is
    Share prices follow earnings....buy EPS growth!!



  8. #8
    ? steve fleming's Avatar
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    Quote Originally Posted by steve fleming View Post
    At close on Friday the seller had from memory about 90k at 15c and 80k at 16c (disclosed).....it always withdraws its offer at end of day....has been doing that for the last couple of weeks....should be back on Monday morning
    So the 90k order from Friday is now moved up to 18c….the seller wants out, so I still think he will come back down to 15c.
    Share prices follow earnings....buy EPS growth!!



  9. #9
    ? steve fleming's Avatar
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    Quote Originally Posted by steve fleming View Post
    So the 90k order from Friday is now moved up to 18c….the seller wants out, so I still think he will come back down to 15c.
    Well that played out exactly as suspected.

    Sellers dropped into the 15c bid, with more to come…and no sellers left as order again removed at end of day

    Biggest volume day in KME in a while…..Wonder how many are left to come at 15c?
    Share prices follow earnings....buy EPS growth!!



  10. #10
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    My daughter goes to Kips and we're very pleased with the change in her attitude to maths and the methods they teach to help her improve her ability. The place is always full of kids so there's no issue with take-up of "The Product". For my ten cents I'd say this is a good company, employing good people and delivering the goods as far as I can see.

    KME is a stock I'll definitely be looking into.

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