MOZ

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13.0¢ mosaic brands limited

A different NBL, page-5

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natnicnak

2,016 Posts.

130

19/03/18

16:35

Post #: 31863019
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Originally posted by hcosah ↑

Mymom, I have considered my position on an individual basis and haven't swapped elsewhere. I am one of those who are cautious about valuations currently so am unable to find a 'home' in the market at present.

I am not particularly taking a view on the future share price here. Investing is always a risk assessment. You can of course be correct in your reasoning but wrong on your timing and watch the share price sale off into the sunset. However if I ignore my discipline I risk stepping over the threshold of investment into the house of speculation, and I don't feel comfortable there. I am also completely open to being wrong in both timing AND reasoning, time will be the judge.

So my reasons for exiting include the opportunity presented with the increased volume during cum-dividend trading. The irony is not lost on me, dividends are shareholders raison d'etre and I have waited a long time not to get one! However this is a fairly illiquid stock so transacting is not always possible at a time of choosing. The other consideration is the change in risk profile. NBL is less conservatively positioned than it was 3 years ago. It is this very aggressiveness which has helped drive recent returns. However, some of these growth drivers are one-offs and I expect lower growth in the absence of such things as leaps in consumer confidence, failure of competitors or well-timed acquisitions. All are possible, none predictable.

On the balance sheet debt has increased from $0 to $21M (26c/share). Total liabilities are nearly twice the net equity position. Intangibles are significant and as such there are negative net tangible assets. Working capital is now negative $7M. These are the reasons I refer to NBL being "different". None of these debt factors in isolation are causes for alarm, but there is a shift in risk profile which would impact if business conditions declined. The cash flow has improved markedly, aided by pushing out creditors and tightening on debtors. Also, there have been wins in employee costs which have declined significantly as a % of sales. The benefits of these initiatives are probably one-offs and unlikely to contribute to future cash flow growth.

My preferred investment style is to find high quality companies and stay the journey. Retail rarely meets the quality criterion (the moats are ephemeral). By way of illustration Myer was once a blue chip company. I am not certain I am making the exit at the right time but I have had a more than acceptable return and have considered my appetite for the changed risks in light of the current valuation. I do welcome opposing views as it broadens the knowledge, good luck to all.

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Great value investor commentary.

I do have a question on logic if I may; can you tease out your comments re (a) debt, perhaps with a focus on net debt (inclusive of cash), free cashflow and how those amounts compared to 31 December 2016 and (b) net current position compared to 31 December 2016?

NBL Price at posting: $2.51 Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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(20min delay)
Last 13.0¢		Change 0.010(8.33%)		Mkt cap ! $23.20M

Open	High	Low	Value	Volume
12.0¢	13.0¢	12.0¢	$6.017K	49.62K

Buyers (Bids)

No.	Vol.	Price($)
1	8000	12.0¢

Sellers (Offers)

Price($)	Vol.	No.
13.0¢	92422	3

View Market Depth

No.	Vol.	Price($)
1	8000	0.120
5	235145	0.115
4	149090	0.110
2	19046	0.105
10	258925	0.100

Price($)	Vol.	No.
0.130	92422	3
0.135	67260	2
0.140	16270	1
0.145	32871	2
0.150	71376	2

Last trade - 16.10pm 26/04/2024 (20 minute delay)


Last 12.5¢		Change 0.010 ( 0.00 %)
Open	High	Low	Volume
12.0¢	12.5¢	12.0¢	29667
Last updated 15.59pm 26/04/2024 ?

MOZ (ASX) Chart

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