@joewolf,
My heartfelt thanks for going to the trouble of penning your thoughts.
I can't overstate how useful that historical context is for me at this stage of my due diligence exercise on the company.
(For me, 95 times out of 100, a company''s future is informed by its past)
I am aware of the rather haphazard selling down by the Young party over time and I assume they will be done at some stage over the coming 6 to 9 months (if not sooner, given their current 5% stake in the business is a manageable bite size for an institution wanting to get set in what is a notoriously illiquid stock), so I want to be set when that happens because I think it will remove the cap on the stock. (That's if they haven't completed selling what they want to sell, given there has been no change announced for 7 months.)
But when it comes to unraveling the investment mystery that is SEQ, the stock overhang issue is the easy part.
The difficult part is not just what the business is today, but what it will look like in 2025 and beyond.
Sometimes I find with some stocks, that I am able to get a visual image in my mind of how it grow and change over time, but other times I find it impossible to "see the matrix" (as I heard it described by one of the portfolio managers working for the hedge fund, Axe Capital, in the movie "Billions").
I struggle to "see the matrix" for SEQ.
You've got 4 business divisions which, while they all fall under the broad banner of "financial services", are quite disparate and different in many ways.
All I see is a rather loose agglomeration of finance sector "stuff", for all of which has had extremely aggressive growth objectives articulated:
Revenue Growth Targets - FY2021 to FY2025:
Wealth: from $55m to $180m (3.3 times)
Professional Services: $7m to $40m (5.7x)
Equity Markets: $52m to $160m (3.1x)
Direct Investment (a misnomer, if ever I heard one): $1.9m to $20m (10x increase)
If I owned a company outright and the managers of my company presented those sorts of growth targets to me, I don't know whether I'd be extremely excited, or plain terrified that they are going to blow up my company!
Don't get me wrong; they are all real and highly cash-generative businesses and the balance sheet is in pristine shape and certainly adequately primed to facilitate the envisaged growth.
And the stock is unambiguously cheap.
But the extent to which shareholder value gets created (or destroyed, for that matter) all comes down to a bit of a
Trust Garryexercise, I feel, and while he does own 10% of the company, that in isolation is no guarantee of success, so I feel I need to listen and learn more about him, because it strikes me that he is a bit of a key man here.
To that end, your post was valuable, so thank you again.
.
(20min delay)