Detica Share Discussion Threads

[judge jury] 01/2/2006 11:03

Possibly the most interesting part of the note is what they say about StreamShield Networks (SSN). Here are some extracts:

"We expect the company will sell its controlling stake in SSN during 2006, freeing up capital to invest in growth in the US and in managed services"

"Although the company has invested in the internet content security business SSN, we believe the business is non-core and that bringing in an external investor, one of the options considered by management, is the most likely outcome. Cash realised from a sale or a partial sale may be reinvested in the core business."

"In our view SSN is not core to the business; sales cycles, sales partners and end customers are diverse and different to the core Detica business model. Whilst we believe in the technology, in our view, Detica is not the right partner to fully commercialise the business. Longer-term investment here could further reduce group margins."

Conceivably, DCA are in talks with potential buyers of/investors in SSN. Any leaks could get reflected in the share price.

All guesswork on my part though, obviously

[judge jury] 01/2/2006 10:48

Managed to find a pretty upbeat 18 page note published by Jeffries & Company on 5 January. It sets a price target of 1450p. Some of the key points are as follows:

"Investment Summary
We believe DCA can replicate its success in UK government sales in the US, contributing to our target 30% annual revenue growth over the next two years. Demand from government is high, and the growing commercial revenue base and managed services contracts broaden the potential revenue base and increase visibility."

"Valuation/Risks
We value Detica using a combination of DCF EV and PE approaches. Our target price of 1450p is a combination of the three. Risks to our recommendation include a failure to expand sufficiently in the US, undermining growth rates, higher than expected staff turnover and a change in government policy, slowing intelligence spending."

The share price rise could be the result of fund managers slowly digesting this note?

[screamer] 31/1/2006 18:31

Aye, I'm still here & loving it. My ISA's loving it too!!

I've found it very hard to believe the relative lack of interest on the board. But hey, I'd rather have a quiet board and tasty profits than have a wild ramping/deramping fest with rabid shorters & longers tearing verbal lumps out each other and the shareprice.

Anyone any ideas on the increased volume today? Is something afoot?

Screamer

[judge jury] 31/1/2006 14:13

I am still here but I havent really got much to add. The share price action since the middle of December has been very odd. I am not sure it is wholly explained by the severe illiquidity in the shares. There could be news in the wings but I cant find any hints in any press/analysis anywhere.

I think awareness of this company is slowly improving. There arent too many UK IT companies that demonstrate consistent strong and (crucially) profitable growth. Risk is much lower than most IT companies in my view and the potential upside remains very significant.

No doubt we will get a few more ups and downs but I remain very confident that the general up trend is set to continue. Long term hold for me (buying on the dips).

[artful dodger] 31/1/2006 13:55

there's my breakout!
i can't believe how few people seem to be making stellar gains on this stock!

Or am I the only one yipping on about it whilst you lot are just sat there being smug!

[judge jury] 16/1/2006 16:37

Very wierd yo-yo effect going on at the moment. Dunno what's happening but it might be to do with the seemingly illiquid nature of the stock - very difficult to buy or sell in any quantity as far as I can see.

Such a decent company - my approach is to hold on tight and buy on any weakness.

[artful dodger] 16/1/2006 14:15

corking strength here

looking for a good break above £12 now and I will add more!

[judge jury] 23/12/2005 09:37

Director sales provided the excuse for profit taking. Definitely needed to take the foot off the gas. Nice upward trend though. Good for the medium/long term.

[judge jury] 20/12/2005 11:43

Onwards and upwards. A chart like this says to me that something is up. Either that or we're in for a dose of profit taking, surely?

[judge jury] 19/12/2005 15:55

Investec are forecasting eps for the year ending March 2007 of 53.6p, up 45% from a forecast of 37p in this year. A price target of £14 would imply a 2007 multiple of 26x - quite pricey really and assumes (1) no slip ups and (2) strong growth beyond 2007. At this stage there is no reason to suggest there will be slip ups or a lack of growth so it could be a reasonable 12 month target.

I think the only way to get to £14 in the shorter term is if there is a bid or if there is some unexpected news on StreamShield.

Personally I am quite suspicious of this sustained rise and think there is some good news around the corner, probably on StreamShield as I havent really thought of Detica as a takeover target.

[artful dodger] 19/12/2005 15:27

my target, for no apparent reason, is £14

[judge jury] 19/12/2005 10:40

Even stronger buying action today - thought it wasnt possible.

[judge jury] 07/12/2005 15:32

The strong buying post results continues. Somebody or somebodies want the stock. c.£6m of buys in two trades. Nice one. Wait for the RNS

[canary wharf] 28/11/2005 14:43

Great results! Although the results are built into the price it looks like Tom has made a serious move into financial services with the announced aquisition. This is exactly the hole that needed to be filled to mitigate the "gravy train" government contracts, about time.

[artful dodger] 28/11/2005 13:45

agreed wj
the good news is in the price

hold for me though, i'm not selling as I do see these as a core IT holding

[wjccghcc] 28/11/2005 08:45

Yup, great results and great company. EPS a bit flattered by the 14% tax rate after 3 years R&D credits received all at once. Still can't bring myself to buy them on a PE of 27 with that much government exposure though.

[artful dodger] 28/11/2005 08:15

stonking results and contract news

[judge jury] 24/11/2005 15:49

Agreed - I tried buying today and could only get 200 shares - pathetic

[canary wharf] 24/11/2005 15:42

Watch this space, Monday morning will all be smiles with their latest results. MMs are short of stock :-)

[artful dodger] 23/11/2005 14:19

happily my largest holding in my sipp
still reckon we can add significant value over the next few years

[wjccghcc] 22/11/2005 11:37

Agreed. Watching and waiting.

[canary wharf] 22/11/2005 11:13

6 month results due on monday, yesterday's FT article on consulting articulated the strong demand in sectors in which Detica operate which should translate directly to Detica p&L.

There still remains the issue about credibility in non-government sectors, they will need to have an answer to make this company really take off.

[johnrxx99] 09/11/2005 10:29

Uh, missed that one, thanks WJ.

[wjccghcc] 09/11/2005 10:09

There are three on the list, though I'm not sure why QXL qualifies :)

[johnrxx99] 09/11/2005 09:38

Suprisingly quiet for an excellent company but probably good news judged by the noisy threads.

This just came along with a Google alert for AVV but thought you should know.



Onr of only 2 in the UK can't be bad and suggests a but brfore results. I don't hold and have only just started research.