time to buy?, page-3

re: chart excellent, any views.. See the post of 5 Nov, when VGL was at $1.35


Subject one to look at over the weekend
Posted 05/11/04 16:43 - 40 reads
Posted by Ocker
Post #410237 - start of thread - splitview

This is a stock I have been following for a while and one which I reckon is worth taking a closer look at.

Currently trading at a fully covered yield of 6.25% ff.

Thr stock has eased over the past week in the face of persistent selling by what would appear to be one major holder. The style of selling (that is, with little regard to the impact on the share price) is typical of the trading style of Perpetual Trustee's - who are listed as a substantial holder with 6.6 mio shares (as at 1/9/2004).

Salomons have a Buy/High risk rating on the stock, and their lastest (28/10) research paper states:

quote
Cheap, big yield, good growth, new CEO
† We see no reason for the 10% retracement in the VGL share price over the past three months other than a lack of newsflow. The stock is cheap (FY05e PER <10x), is yielding over 7% fully franked (10% grossed up), has solid growth prospects and a new CEO with significant industry and acquisition integration experience.
† While this simple synopsis has not changed over the past two years, the quality of the business has changed. In addition to VGL's successful migration towards higher margin IT services, the acquisition of Ipex has significantly diluted the profit contribution of the commodity hardware resale business from c90% to <50%.

† And we argue that there has never been a better time to be a mid-tier Australian IT outsourcer. With super-sized, single-supplier outsourcing contracts being broken up into clusters of smaller contracts and awarded to specialist providers (due to the inevitable problems experienced with all-in-one contracts), Volante is well placed given:

† it is one of the largest players in the mid-tier IT outsourcing space;

† its balance sheet can digest these smaller contract sizes;

† this creates an incentive for corporations and government agencies to support the Australian providers; and

† it is the purest listed exposure to this growth sector.

† We reiterate our Buy rating, while our target price has lifted 8c to $1.72 due to an increase in peer group trading multiples.
unquote


Reckon that once the current seller finished then the stock has a very good chance of getting to around the $1.50 level.