I represent a large shareholding in CQU and have been observing the posts on here for a number of weeks. ( Note: I am not part of Commquest Management or affiliated with them in any way apart from being a shareholder).
I have not posted on Hotcopper before and do not intend to be a regular poster.
However, I would like to make the following comments regarding Commquest.
Commquest is an emerging company run by a young and energetic management team focusing on growth in digital media and non-traditional advertising/media such as SMS.
Their share price has been hit by a tidal wave of negative investor sentiment for the ASX and small companies. The like that I have not seen since the late 80's early 90's. A generation effectively. CQU's share price performance is not dissimilar from many other small cap stocks in 2008 indeed even some large stocks - heck global markets really. This is what happens in a Bear Market Unfortunately this negative sentiment will likely continue for some time. You need to be patient or sit it out.
Commquest has positive cashflow, no issues with debt or staff and is making money.
It is impossible to predict how bad the economic situation will become or indeed investor sentiment. Needless to say, that a market recovery will take time. Years perhaps.
The market often provides opportunities through its irrational behaviour. Anyone who sold their shares at 13c valuing CQU at $10m needs to seriously consider why they are managing money. At 13c effectively this means that an investor was willing to part with their shares at 10% of what they were worth 6 months prior despite the company still forecasting to meet prospetus. Even if you were angry with management or dissapointed
That's a fire sale.
Well done to all who bought. You are already sitting on a 54% profit.
Whilst we have had a position in Commquest since the IPO the bulk of our position was acquired for less than 15c. Indeed I purchased stock for my family around the 15c mark.
Regarding earnings. A good friend of mine works for a multinational Ad agency and he told me at the weekend that business always picks up when the economy slows. Indeed his wife who works for a marketing company said to me that her firm has been really busy in the past few months as companies need to get inventive to try to lure the customer.
I have completed my due dilligence for my investors and recognise this as a unique opportunity. Ultimately, the share price will recover when the market does which may take two years. But if the underlying performance of the business remains static or improves then we wont see the low of 13c reached again.....regarless of the market.
I will remain of this view of CQU unless the situation of the firm detoriates significantly. (I can not say for certain that it will or it wont). Ironically, at the current price it effectively assumes that this has already happened and CQU is in a Blue Freeway style collapse. Which they are not.
In summary. For those who are patient, continue to accumulate on day's when the market looks terrible. If you are happy to wait 2-3 years for a market recovery (it may take more, it may take less) then this stock will be a ten bagger and CQU will kindly pay you a 10% yield for your support/patience. If you cant wait 2-3 years to make 10x your investment then i'm sorry but you better stick to powerball.
Kind Regards Pie
CQU Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
