Why are we again at 10.5p bid?

It doesn't add up...

Good Results + Strong buying pre results + Christmas online buying soon = Price drop

Then again some companies that have debt for equity hanging in the balance, poor results and bankruptcy around the corner and they go up!

Why sell now at a loss?

Wont that be a kick in the teeth when we see 13.5p 14p again!

Best of luck all.

never thought we would see this price again b/s 1:11 :o((

i must admit i knew we would have some up & down movement but wasnt expecting this low. however, it could still be MM's playing around. we may see some buys come in later today.

javid

its a joke!

the MMs and companies like Collins Stewart should be wiped out. Where is the useless FSA. They are so useless and toothless, they should be scrapped too. The whole country is corrupt. We are just a diluted version of communist Russia

2 March 2004

Retail Decisions


Thank the Lord for fraud. While criminal misuse of credit cards is a headache for retailers and shoppers alike, it provides Retail Decisions with its daily bread. As payment by plastic continues to spread, so does the need for the type of fraud prevention software that the company provides. Having disappointed over the last couple of years, RD delighted investors with a strong surge in profitability in 2003.

RDs first real profit was driven both by cost cutting and a sharp improvement in performance by two of its businesses. Its Australian division, the largest contributor of earnings, stormed ahead. The fuel card business was boosted by the higher oil prices resulting from the Iraq conflict. The US operations picked up thanks to a boom in e-commerce.

A major challenge for RD over the coming years is the advance of chip and pin technology, which requires those paying in person with a credit card to enter a secret code to verify their identity. This promises to cut fraud significantly on such transactions. For this reason, RD is stressing the opportunities in card not present situations, such as payment over the telephone or Internet. House stockbroker Daniel Stewart expects EPS this year of 1.06p.

IC view:

Having risen tenfold in the last year, RDs shares may now tread water for a time. The prospective PE of 23 looks about right. Fairly priced.

Its interesting depending on which analyst or web site you look at they are using the different EPS and there appears to be no consensus. Here they are using the basic EPS this year of 0.5p and a forward estimate of 1.06p for next year giving a current PE of 47 and a forward PE of 23 (nice growth). If you look on ft.com at the consensus and actual figures there they are using the adjusted EPS of 1.4p per share (no f/c yet) which gives a current EPS of 16.8. The f/c EPS on this basis is likely to be about 2.2p giving a forward PE of 10.6 - so which profit to use for PE ratio?

As i mentioned in an earlier post, the accounting for ammortisation/ exceptionals/ interest make a large impact on a company like RTDs profits and hence how they are valued. What we do know is that the interest charge of 0.5m is going to be a lot lower this year if not zero as they are currently cash positive. They will have to continue to write off the ammortisation costs over the next few years though all other exceptional costs should now be written off. Costs have been reduced so more of any additional revenue is now going straight to the bottom line.

In the short term the valuation after ammortisation etc may hold the share price back but for the long term the prospects look as good if not better than ever IMHO. The ammortisation costs will have less of an impact in percentage terms as the profits continue to grow until they are all written off.

RTD are still operating in a market which is growing at an exceptional rate and can only continue to do so (EBITguard transactions up 168%) and within the results confirmation of renewed and new contracts was good.

All IMHO and DYOR if buying in but I am still holding for the long term

Fundamentalist - What do you see this stock at in 6 months? 1 year? 2 years?

Like yourself I have decided to stay in RTD for the next 1 to 2 years.

Any speculative prices? Got in a 9 pence, hoping to get out around 100 - 150 pence.

Is this just a fantasy, or is there real hope of this coming true?

Tokyo,

I am not a fan of target prices that far in advance - I feel that it either sets you up for a fall or that you sell out too early once reached. If you work on the basis that the market would want an EPS of 5p and a PE ratio of 20 to get the price of a 1 you are talking about profits of about 14m (if the PE was 30 then EPS of 3.3p and a profit 9.6m) - I don't think this is unachievable in the next few years - how quickly i'm not so sure. The key for now is the continued growth through new contracts as the market place remains very strong and some more director buying wouldn't go amiss

i think one would only have to look at rtds price when nitefly first posted this thread and there were good results then, and look what happened to the share price at the time and what it is doing now! it has more than doubled in price, its going down again now but i see it doubling again in 6 months what goes around comes around as the saying goes,its the same as the whole stock market which also goes in cycles look at it just 2 years ago and what it is now!i wish all traders luck!

where have all the posters gone......... not much to say is there except OUCH!!!

should a sold at 28p ......good old hindsight ;o(((((

Douggie,

Still here - I agree if you're in for the short term 28p was attractive, if you're in for the long term look at that post in 1 or 2 years time and see if you should have sold at 28p for your real hindsight view. I'm waiting for this to settle then will be buying some more.

Anyone know if a write up in shares today?

write up in shares advises sell.

Shares mag :

Retail Decisions (RTD) 25.5p TAKE PROFITS

We tipped Retail Decisions at 12.625p (11 Sep 03) and it reached 26.75p recently. Full-year results beat forecasts at 1.4p EPS. But this year the legacy Apacs contract will fall from 2 million to 1.4 million. That means EPS for 2004 is unlikely to top 1.5p. This core business is growing at 20%, worth 29p on a 25 PE, plus 0.5p for Apacs. Still good value but unlikely to excite punters this year.

i sold at 27p (due to resistance at 28p-30p) and bought in again at 24.69p. however, i bought very little compared to what i sold and am going on the assumption it would attack the 28-30p resistance and i can then safely buy some more once it hits 30p. i wasnt expecting this much of a drop though and am still unsure if it is MM's playing around or this stock is really going down. on sharescope i see nearly as much buys as sells yet it seems to be dropping further. if it falls through the support then i have to re-think how much risk i want to take with this share.
has anyone heard anything? would i assume correctly when i say institutions would look at buying into RTD after their results?

javid

Re: the shares article the EPS growth they have from 1.4p to 1.5p is on adjusted EPS implying minimal growth. The Daniel Stewart projection is for basic EPS to grow from 0.5p to 1.06p based upon a high level of new contracts - a fair disagreement of the prospects. Yes APAC is going to fall, but in contrast the core business is growing at a rate higher than 20% IMHO - ebitguard transactions grew at 168% this year alone and several new/renewed contracts were "hidden" in the results as well as turnarounds in the US/SA businesses.

Javid - I still think the current moves are a combination of some sellers taking their profits and the MMs walking it down to shake out as many as possible (they may still be balancing their books). The share needs to find a new support level. As for institutional investors, yes they would be likely to invest post results and a RNS in the next few weeks would be nice alongside some more director buying

as always, thank you for your information fundamentalist.

Guys - how low do you think this might go - in the absence of the crystal ball of course

i understand this weeks shares mag has plastered a sell on RTD. i really am very surprised it has gone this low.

Hopefully not much lower lol. I feel it is going to drift for a few more days or until we get a positive - whether it be institutional/director buying, positive brokers/press articles etc. To me its slightly self-perpetuating, the lower they walk it, the more stop losses or weaker holders they hit and this then makes more people concerned who then sell at the next level and so on.
I think the shares mag article will facilitate a few more sellers (as we are seeing this morning) and it will be interesting to see what the weekend press make of it. I think for the short term this is not going to excite as it did (hence the sellers) but is still rock solid for the long term (hence shares saying it is still good value) All IMHO

for three week this share rockets looking forward to good results to boost futher rise good news now loads are offloading no interest none here too it wiuld seem!!! :o(((

Douggie,

I'm still here but like any share that drops so does the interest. There were a lot of short termers into the share who are now out and the take profits recommendation in Shares today hasn't helped. Have to admit have been reading other BBs to gather more info. Most long termers seem to be happy to ride out the storm - the fundamentals are still strong as are the long term prospects. One theory appears to be that 40% of the shares are out loan and the share is being aggressively shorted in the immediate term down to 20p - however, even some of those shorters admit the long term is great but thought the share price rise was overdone compared to the results - hence are shorting down to 20p at which stage they will then go long. Personally, am still long the share for the long term and am looking to add when the dust finally settles. Are you still holding? short term/long term? what about others?