share price, page-9

I have a holding in both ASZ and CSV as well as other IT stocks. Most IT companies are selling at 10-20% below fair value in the current market, and this is where I see ASZ sitting. When CSV were around $1, they also fell into this band. At 85c/$1 for ASZ/CSV, I would prefer ASZ because they are a better quality company - but at 60c CSV is an easy buy.

CSV ran foul of investors last year when management played games with transparency and share placements - and investors’ memories linger until good news overwhelms. But this doesn’t change the underlying business. CSV earnings growth over the past 5 years is close to 30% CAGR - their acquisitions have gained traction and they look like they are getting cash-flow under control again and have paid down debt.

I don’t discount Starrr’s comments - ASZ is a good IT company - I expect ROE of around 21% which gives fair value a bit above $1 - in a dead market I’m expecting 10-20% capital growth over the next two years plus 9-10%pa dividend.

For CSV I expect ROE of 17% so see fair value around $1.20, and am expecting at least 50% capital growth plus 10%pa dividends at 60c SP. And I don’t believe we have heard the end of takeover-talk. Since the company announced they had broken off takeover discussions, more than 5% of total shares have changed hands - over Xmas/New Year! If someone is interested enough to do due diligence at $1.20, how interested would they be to buy on-market at 60c?

Please don’t rely on my ramblings to be accurate - do your own research