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21:52
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Originally posted by farmer fred
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Interesting piece on livewire this morning from Eley Griffith Group."CSG Ltd provides computer and IT products/services, as well as ancillary services to businesses and universities. The business model revolves around cross-selling both big and small ticket items into the client base, and importantly providing the finance piece. CSG recently delivered an interim result that caught investors off guard, coming in a little shy of the mark. This was explained by a $4m mistimed revenue item, that would be caught up in the second half. The share price had been trading lower into its profit release and its PE multiple has been de-rating closer to a market PE ratio for some time. Professional investors would call that a buy set-up, assuming the fundamentals are in order. Reported sales to new and existing corporates grew nicely during the period, pointing to solid demand for specialist equipment as well as small ticket IT and telephony items. Sales momentum into local universities continues to be positive and confirms the cross-selling model is working. Management guidance speaks to 2016 revenue growth of around 14% and for EBITDA to achieve at least this level of growth. The balance sheet is net cash ($25m) and a number of potential acquisitions have apparently been identified. Some concern at last months move by Chairman, Tom Cowan (also a 7% shareholder by association), to step back to non-executive director appear overplayed. A recent partial share sale by members of the management team has also received mixed blessings from the sharemarket. We believe the investment thesis for CSG remains intact and the recent share price weakness affords investors a set-up that is unlikely to persist."
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agree with last sentence - $2 here we come
