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$1.32 pushpay holdings limited

Ann: Trading Halt, page-36

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Wombatpoo01

60 Posts.

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15/12/20

23:29

Post #: 49604741
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Originally posted by harryAJX: ↑

Agree with kiwiguy and wombatpoo.I'm up a couple hundred percent and pushpay is also my biggest holding (or second after afterpay if u count my super).

Few things to add

a) Motley Fool - yes they have a terrible public image due to poor taste in marketing however it is unfair to comment so negatively. They are a business trying to do good in the world of educating retail investors. They have done a great job of educating and enriching me. All of my most profitable investments were thanks to them and they have pointed me well and trully in the right direction to develop my own investing knowledge, skills and strategy. You have to remember you get what you pay for, the free articles provide mostly shallow coverage of a broad range of companies and are not linked to what the paid services have recommended. I read an article from 2018 where they were pushing Afterpay so their record cant be that bad. While I was a member they had a bunch of amazing analysts in the various paid services the likes of Matt Joass, Joe Magyer and Claude Walker. Im not a member anymore but recommended them to a friend under 6 months ago and he has been really happy with the service and his returns

b) Chris Heaslip has nothing to do with the company anymore and could be selling for any number of reasons, perhaps he is moving on to another entrepreneurial project. This is no surprise to me

c) I am disappointed to see Chris Fowler selling down, I was glad he hadnt sold the first tranch of shares when they became unrestricted 6 months ago and was hoping he will become the new founder leader of the business. Agree with lightning70 they have a vacuum at the top it seems nobody is particularly motivated to take this business to the next level which is definitely my biggest concern but not a big enough concern at this stage to sell

d) I have calculated the relative liquidity of pushpay shares recently trying to work out what kind of a change is required for them to be listed in the asx200 or 300, the companies which were recently added into the 200 have multiples higher liquidity vs free float than pushpay so a step change in liquidity is really required to get into the 200. I dont see why they havent been added to the 300 yet however and hope they are on the next rebalance. The silver lining here could be that this selldown should increase liquidity (and does increase free float) which could have a solid positive medium term impact if pushpay gets added to some indices. Even if that liquidity stems from some painful short term volatility it may be worth it..

e) if worst fears are realised and there are some nasty surprises coming perhaps in relation to xmas donation levels due to lack of face to face church gatherings (?) the long term picture for pushpay is still looking very bright. There has been no slowdown of user growth when u look at the donation management product, in fact I would say the next couple years at least of user growth will come easier than ever thanks to the ccb acquisition. They have only just integrated this into a single solution (churchstaq) which has a great value proposition to new and existing ccb customers alike. There's nothing to suggest profits wont continue to grow and triple or quadruple over the next 3-4 years. That could see the share price 3x easily over the next 3 years. Just look at the profit they will make in fy23 (let's say au$100m), the revenue growth (~30%) and ebitda margin (40+% and growing) they will have and the PE that is likely to demand. Companies with lower numbers than these demand a PE of 50-60 (wtc 23+30, eml 25+27). My DCF valuation isnt that rosey but I think the fundamentals look amazing from here and many analysts and investors see this and that's why MF are pushing it because they see it too.

At the same time this is a more mature business with a more modest potential level of share price appreciation than in the past and different management requirements so it may need to find a bit different shareholder base and maybe some refreshed management it seems. As it continues to grow with now higher free float and liquidity hopefully it will get into some indices which will help a lot with the shareholder base, not sure what to think about management, just hoping Chris Fowler will stay in the picture.

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Bravo sir. I take my hat off to you
Such an informative, extremely well constructed piece! Your input is greatly appreciated, you have provided ample meat to the bones so to speak, and are quite obviously someone with vast experience in the workings of this complex share ownership beast.
In look forward to your next post my friend

PPH Price at posting: $1.78 Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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