Great value investor commentary. I do have a question on logic...

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natnicnak

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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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(20min delay)
Last 12.0¢		Change 0.005(4.35%)		Mkt cap ! $21.42M

Open	High	Low	Value	Volume
11.5¢	12.0¢	11.5¢	$9.55K	83.04K

Buyers (Bids)

No.	Vol.	Price($)
2	92471	11.5¢

Sellers (Offers)

Price($)	Vol.	No.
12.0¢	37608	3

View Market Depth

No.	Vol.	Price($)
2	92471	0.115
8	391483	0.110
6	285792	0.105
11	219425	0.100
1	10416	0.096

Price($)	Vol.	No.
0.120	37608	3
0.125	99347	3
0.130	8585	2
0.135	35000	1
0.140	16270	1

Last trade - 16.10pm 16/05/2024 (20 minute delay)


Last 12.0¢		Change 0.005 ( 4.35 %)
Open	High	Low	Volume
11.5¢	12.0¢	11.5¢	53185
Last updated 15.56pm 16/05/2024 ?

MOZ (ASX) Chart

Great value investor commentary. I do have a question on logic...

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