wow, whilst I thought it was very likely that VOC could reach $2 by March, I also had a lingering sense that I was perhaps being a little too optimistic given the sharp increase in the price since listing. Well bang the SP smashed through $2 in early march on the back of what was a very tiday half year report. Congratulations and pats on the back to James and all of the management! We have had a recent sub notice filed which probably goes some way to explaining the recent price movement. There are only approx 52 mill shares on issue with VOC and current management and those involved at the IPO stage own a big fat chunk of the issued equity (circa 61% of issued capital). So any big boys trying to get onto the register now are having to pay up. A good friend suggested the price movement had the hall mark of a panicked buyer of some volume and I think there is some truth to that hypothesis given the recent substantial holder notice. From my snooping around we have a few funds already on the register or interested in taking a position or building. The NAOS emerging companies fund lists VOC as one of its top 5 securities, although the fund was 25 mill as at December last year so that explains the lack of a substantial shareholder notice to date. I have also heard speculation that Pengana may have or may be interested in taking a position - they certainly list in their perforamce reports that they have visited VOC management as part of the management visits program. If they are they are less than 5%. So there are potentially three new institutional investors on board. If anymore are interested in coming on board or existing guys want to continue to build their position expect further upward pressure on the SP. Tempering this will be the release of a substantial amount of escrowed capital in the middle of the year. Not sure if this will include the Investec shares. Investec came on at IPO (or reverse take over capital raising to be technically correct) or perhaps pre IPO and given the "listing price" of circa .50 cents, which they most likely paid less than this amount, they have turned say less than $ 5 million into $20 million in less than a year (someone is due for a big fat bonus!!!). Investec may be interested in crystallising some of these gains so greater volume may come on the market once the shares come out of esrow. The same applies if the escrow arrangement applies to the McConnell shares, given he has left the board after the start up phase. Of course owners of the escrow shares may be perfeclty happy to hang on given the bright future. If they do want to take some chips of the table however given recent price action, and also the promising future one would expect there will be many buyers willing to take on whatever feeds through to the market.
My model suggest FY11 EPS will come in around 16 cents per share. I think we can expect EPS of 22 in FY12 at the upper range all things going gangbusters and VOC enjoying the benefits and capitalising on the expected 35% CAGR of data usage over the next few years and perhaps the benefit of a few new acquisitions and excellent performance of existing one. Given the high growth nature of VOC I think a PER of 15 is not out of the question - multipes of MTU and MAQ are a good yardstick to this end in terms of what the market is prepared to pay for growth in the telco industry. We may well see a share price between 3 and 3.5 by this time next year. Whilst I still also want to build on my position I was lucky enough to get a few below 1.30 so my cheer with recent performance outweights my disappointing with having to pay more to build on my position.
Good luck to all holders.
VOC Price at posting:
$2.09 Sentiment: LT Buy Disclosure: Held
