Australia's largest stock trading and investment forum Australia's #1 stock forum

VOC vocus group limited

0.00%

$5.49

that's exactly why you should hold or even accumulate if the SP...

First 6 Last

Share
Profile

Follow
crazypunter

5,760 Posts.

111

31/08/17

18:01

Post #: 26907783
Share

Originally posted by TerribleTadpole ↑

I've been watching since I sold out at the end of last year. I just can't see any compelling reason to buy in the near term. I don't think there's any compelling case for holding either. I took a punt as it dropped under $3 and then sold with an incredible sense of relief when the bids popped up.

The problems are:
1) The company needs to reduce its debts to reduce debt leverage risk, which means no dividends for probably a couple of years. So there'll be no cash ROI.
2) Nobody quite knows for sure how the things will pan out for infrastructure over the next few years. The value case for specific assets such marine cables and fibre could change substantially for good or evil.
3) Nobody quite knows for sure how the retail industry will pan out either. The profitability equation for the individual subscriber could shift radically.
4) Vocus has established a recent history of nasty surprises. On top of that the people I used to trust left at the end of last year. The new guys have to win my trust before I'm going to chance my money on them, and they haven't made a very promising start.

I see enormous difficulties in retail. The total market - essentially 1 account per household - is growing extremely slowly. In fact without immigration the market would be shrinking. So Vocus is fighting to grow its customer base in what is basically a zero-sum game. Even though data consumption per consumer is growing rapidly, revenue is not. It's hard to recover a per-megabyte rate when customers can switch providers with the submission of a web form if they don't like their bill.

Commercial is a better picture. These are customers who will be prepared to pay for additional services as well as capacity. But sellers are piling into this segment because of the difficulties in retail, and this is going to increase pressure on prices and profits here too.

Infrastructure is better again as that is typically charged by capacity, which is growing rapidly. Also, major trunks are a limited resource so those wanting to buy capacity don't have a lot of options. However the squeeze on profit margins at the supply end is going to ripple through to the carriage prices they are able to pay.

I don't believe that there will be any particular interest in Vocus shares until a positive picture begins to emerge for Vocus as a company, and for the telecoms market as a whole.

If you have the stomach for it, you could try this as a mental exercise (or even an actual one). Sell your Vocus shares. Then take a fresh look and decide, "Do I want to buy them back? At what price?"

Expand

that's exactly why you should hold or even accumulate if the SP keeps sliding.

it's just a matter of time before we get another takeover offer, but it will only be 3 bucks at best this time round, which is bloody generous, so grab it.

the board will have to accept it and put it up for a resounding 'YES' vote by shareholders who are just waiting patiently on life support for the 'ambulance' to arrive and offer a glimpse of salvation.

OK- so what do the shareholders then do with their windfall?

just buy TPG, make a motza and VOC will soon be deleted from the memory banks and best of all- you will have no more stress , and as a bonus, sweet dreams which prolong your life so you can enjoy longer.

cheers crazypunter

Last edited by crazypunter: 31/08/17

VOC Price at posting: $2.31 Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

Reply

Top Stories

Listen: HotCopper Wire Podcast 017 – RBA holds the toppings

ILU

Rare earths stocks surge as Pentagon buys big stake in US REE miner

Trump just dropped a 200% tariff bomb. Here's how to cash in

VMM

'Big tick': Viridis positions for global leadership with Colossus pre-feasibility study

HotCopper Highlights: RIP to Botanix (for now); Droneshield new ATH; Trigg mystery halt

AII

Inside the depths of Panasqueira: A legacy carved in rock

AAU

Antilles brings Chinese ally on board to keep Neuva Sabana work chugging on

CWX

Carawine faces Fraser Range JV collapse as IGO moves to scrap partnership

LIS

'Opens doors': Li-S Energy the first Oz company to produce lithium metal foils

Week 28 Wrap: Tariff chaos back for some reason; CBA holds strong

First 6 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

SPONSORED BY