I understand your concerns PP, but I believe they can turn the...

I understand your concerns PP, but I believe they can turn the margin decline around.

They are in the business of selling skills. I think the best we will see from DWS is gradual growth - I'm happy with 8% div plus franking plus 5% growth pa. DWS's stability has been impressive. If the average growth turns out to be negative, then you are correct and now would be the best time to sell. But we won't know that for another year or two.

If you filter out noise from the margin trend, then I really only see a decline since 2010 - and this corresponds with the Telstra "shock". In the past two years they have been able to redistribute their business amongst a larger customer base which has increased their stability - and I am sure this is a reason for the margin decline. I'm guessing that they have had to "buy" business from new customers. They have a very good reputation in the market so hopefully they can now increase margin, or at least maintain margins on increasing revenue.

ROE has been 30-32% for the past 4 years, was 35% in 2005 and then up/down for a few years - over the past 8 years they have average 27%. They have achieved a remarkedly high stable ROE over a long period. There are better results on the ASX, but not many. I am happy to hold and see what they can do over the next year.