I think it's just starting to heat up in the kitchen a little, so to speak.
As always with kitchens and heat, if you can't handle it.......
The difference between perceived risk and actual risk is a very interesting concept.
As time begins on an event that we expect, risk can be calculated initially and seem relatively low.
Think back to the good days of Nov/Dec when MOU2 was just around the corner and share price looked to be taking off.
We're told that the customer is 18/19 in the bag.
Pretty good odds.
Step forward three months and we're still in the same boat.
Nothing has changed apart from what I imagine would be the development of more leads.
However, when left with your ow thoughts of doom and gloom and a relatively volatile share price, you begin to ride the rollercoaster of euphoria and depression.
These movements can basically cloud your judgment on what the actual risks are.
The talk in the last week or so of outlandish pricing of the stock are, at best, foolhardy.
With the estimated service fees we can expect per customer, cash flows aren't something to be worried over.
The only risks that we have are as follows:
- Sentry rolling out the service across their entire organisation.
- MOU2 being shot down at a board level.
These events can occur for a number of reasons.
But.
If you think objectively over it and what Integer offers each of these businesses in terms of direct operating profits and time saved, then why would anybody in their right mind pass up the opportunity to sign the contract before service fees are raised?
Now, I am all for having balanced discussion but all I read of these days is defence over the product or somebody saying it will never work.
There's no talk of the actual upside of what we have here and I think the forum has become one of a defensive propaganda against inflammatory comments.
It's a little unpalatable to say the least.
As far as the upsides of this company are concerned, can we talk a little about the future:
1 - This is a global product. Those of you who say that $100M market cap is unwarranted are actual fools. Australia is a small market of small thinkers.
I love this country (except when Tomic/Kyrgios represent us) but we are small fry.
Look at US/UK companies and the valuations in those markets.
$100M is the valuation of a lemonade stand these days.
We have a product that will be in global demand within western countries that pay back-office staff far too much money.
Australia is a ripe case for this but the rest of the world is calling for us.
2 - MOU2. What of it. If it's not NAB, then CommBank. If not, then ANZ.
Another three months, another three days.
What's the worry?
When that news hits, and it will eventually because we will get a second client, the share price will skyrocket.
What are you going to do with your invested money between now and then.
Go on, take it out and buy some other speculative stock that's far riskier and offers much less upside.
The only risk here is that you wait another 3 months until price moves on the back news.
That's how banks work. They are the slowest of corporations when making decisions.
This is also a good point because once they've made a decision, they tend to stick with it.
MOU2 will turn into a full contract if signed. Banks hate any sort of organisational change just that much.
3 - The long term nature of deals we sign mean that even a singular deal becomes long-term profit.
We don't need many more people to run the company.
Our margins are basically set in the contract and for what we pay in the Philippines.
As more companies come on board, don't expect quarterly expenses to rise in similar proportions.
This leaves us the possibility of receiving dividends in the future as more companies come on board.
Do your own math on that one.
Certainly don't let somebody on HC do it for you.
So to summarise, maybe it's time we look away and let management do their thing.
Looking into the future, there's some greatness that can be achieved.
Right now, the only risk is that MOU2 takes another couple of months.
Certainly won't bother me when a couple of years down the track I'm laughing al the way to the (outsourced back-office) bank.
All of this is IMO. DYOR.
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