value investing

Very little comment on this company.

Keycorp meets my criteria of a substantially undervalued business - smashed by years of overhyped and unfulfilled expectations, lastly the gfc. Original shareholders have been hammered for so looong they must be demoralised, and imo the sp has been slow to react to the changed fundamentals. Movement this week with the general uplift.

Believe Ken Carr deserves praise for the logical way he's restructured the company over the last 2 years. Now steady revenue streams. Suspect they can save $5m in annual admin (from 2008 totals). Any company that voluntarily reduces board numbers and director costs gets my attention.

Know how unsettling these restructures can be, so probably good for morale that a new CEO is now taking charge. Ken has done his job and the changeover looks well thought out and amicable.

$14m in the bank, no debt, forecast $6-8m NPAT this year and looks sustainable. Substantial sustainable revenue of around $50m pa with good gross margins.

On the downside, there is a disgruntled losser in the sale of the Smartcard business. Kens comment was they're just on a "fishing trip", re their action to view sales documentation. They have gained the right to view this.

Purchased a good chunk recently. Small volumes usually traded so there is some liquidity risk. My intent is to hold for the medium term, giving the market time to appreciate and correctly value the new, slimmed down, predictable business.