Netdimensions Share Discussion Threads

[philjeans] 13/9/2012 15:03

cestnous; looking good I agree. Picked up a modest 20k.

How do you know the big trades were BUYS?

Massive volume but little movement; odd.

[cestnous] 13/9/2012 13:37

Bought in this am. on those big buys showing as sells (including mine).

[welsheagle] 09/6/2012 21:12

Very good positive article in Techinvest this month.
Business is expanding and booming, cash alone is worth 17.5p per share,
Panmure Gordon have a target price of 76p.

[kenmitch] 05/5/2011 20:56

Thanks longshanks. I agree with most of your points.

Very pleased with the share price rise too. Buyback fans will put it down to the buybacks but it sounds as though the Penny Sleuth article (whatever that is - a tipsheet? ) might be the main reason.

Also very pleased with Brainjuicer longshanks, so thanks for the heads up on that one. One look at the chart shows how I should have bought ages ago! Recent "holdings" announcements suggest large investors see the potential too.

The gains in the Net Dimensions share price are good news for EVT shareholders too, as they hold a stake.

EVT C/E Richard Bernstein looks to be very busy with JJB Sports right now via his Crystal Amber, and where is seems he could become an Independent Director. JJB looks a load of trouble to me but if Richard Bernstein, Bill Gates and Neil Woodford are all prepared to put in so much money - a very large amount from Neil W. they must see something there!

[hazl] 04/5/2011 12:56

another interesting play dotd

[stegrego] 04/5/2011 12:33

Penny Sleuth article out last night on NETD and hence the buying today.

[longshanks] 04/5/2011 09:21

Looking perky again. Three year high if we hold this increase to the end of day - which is always a good sign. Looking good for a doubling if not tripling or quadrupling of price here over the summer.

I tend to agree with you kenmitch on the relative value of share buybacks. Generally they serve the interests of the few rather than the many. However - with a market cap as low as NETD's where the cash on the balance sheet is not valued nearly high enough - the positive impact of buying back shares can be quite effective at narrowing the discount to NAV.

I would rather they started paying a modest (and progressive) dividend than use cash to buy back shares. However I think they are demonstrating to the market that they have more cash than they need which implies decent cash flow and probably decent and sustained profitability. This in turn should raise market confidence over and above the net effect of reducing the number of shares on the market.

Medium term I am also sure, they want a higher share price to fund equity based acquisitions. Anyway - blue day - can't complain.

[kenmitch] 30/4/2011 09:41

I forgot to include the link to the Terry Smith piece on buybacks.



Yes, if a small Company with the share already trading at a big discount to NAV can afford to buyback on a very large scale then the share price probably will go up.

Even then if using most or all of available cash it would be at the expense of developing the business and getting the share price up by increasing profits and dividends.

[kenmitch] 30/4/2011 09:40

Posted in error.

[kenmitch] 29/4/2011 21:01

kooba

We'll never convince each other.

Again your theory is 100% correct.

That is what SHOULD happen.

But if often doesn't. eps can increase a lot and yet the share price can fall.

Shares sometimes trade at huge discounts to NAV and even at huge discounts to cash at times.

Others are just as crazily overvalued. I remember a shell once with Goldsmith, Archie Norman and other big names involved. All they had was cash worth 2p a share.... yet the share price soared to £2 before falling below 2p eventually when nothing happened.

Cash rich Companies can buyback heavily and still find their share price lower.

Have you seen any evidence and facts and figures on share buybacks as opposed to what should happen? I ask because one reason share buybacks continue is that so many don't understand them. Recently Terry Smith the scourge of some of the dafter practices in the investment world made exactly that point. That includes analysts, financial journalists and very often the Companies themselves, though some are now resisting pressure to buyback having come to realise that the theory is fine but it didn't work for them and they are reluctant to waste more money on them.e.g Rio Tinto.

[kooba] 29/4/2011 18:30

i think you completely miss the point of why you do a share buyback...it is not to sort out the supply demand balance in the market it is to use the company balance sheet in the most advantageous way to benefit the residual shareholders value.
eg. if you have a business with £15m cash and the market cap £10m lets say shareprice 100p so nav per share 150p if you use £5m to buy back stock at 100p you end up with £10m cash but only 5m shares in issue with a resulting nav of 200p...if the shares traded at the same discount to cash they should end up trading at 133p...same applies to eps concentration from reduced shares in issue.anyway i think you have to analyse each company its balance sheet and business as a separate case rather than comparing netdimensions to a dodgy overgeared badly managed nightclub business like luminar but glad you got out of that rubbish when you did..i don't think the buyback had anything whatsoever to do with its demise though. dyor.

[kenmitch] 29/4/2011 18:13

kooba

That's the theory. Detailed research from Morgan Stanley shows clearly that nearly all buybacks are a waste of money. So the theory doesn't work. Companies that bought back time and again did worse than others in the sector that didn't.

Yes EPS is increased by the buybacks. But increased EPS doesn't automatically lead to a higher share price.

What do you mean by "enhancing shareholder value?" And how does it?

I've been invested in several companies that rewarded me with a buyback but I never saw a penny.

The classic example - I got out as soon as they started buying back - was Luminar when their share price was around £8. Now it is 10p. Some reward for their shareholders who at the time of the buybacks were saying like you that it enhanced shareholder value and retired money back to the business. Piffle! It really means buying back shares and cancelling them, better described as throwing money away. Like BP did spending £30 BILLION on buybacks. Fat lot of good it did them.

Buybacks keep some Institutional investors happy and enable sellers to get out without trashing the share price. Hardly a convincing reason for going for them.

[kooba] 29/4/2011 15:28

why sit on cash you are not using where you can get little return...by buying what appears undervalued shares back at this level they are concentrating the value here with fewer shares which will enhance shareholder value as the company grows...all for share buybacks on aim...so few companies have a strong enough business and balance sheet to enable buybacks most just print more and more paper to pay the bills.personally can see this business attracting takeover interest from the far east sooner or later..just imho.

[kenmitch] 29/4/2011 14:51

longshanks.

I'm disappointed that they're wasting money on buybacks. IF it is to accommodate a large seller then there is just about a case for it. Otherwise what is the point? Buybacks do nothing for the share price and private investors NEVER benefit from them.

I nearly always sell once Companies buyback. I made an exception with EVT but theirs proved to be a waste of money too.

I'll watch for a bit longer but this is really disappointing.

[longshanks] 28/4/2011 16:06

Looks like I was right:


RNS Number : 6631F

NetDimensions (Holdings) Limited

28 April 2011

NetDimensions (Holdings) Limited

("NetDimensions" or the "Company")

Purchase of own shares

NetDimensions (AIM: NETD), a provider of performance, knowledge and learning management systems, announces that on 27 April 2011 it purchased 225,000 ordinary shares of US$ 0.001 each in the Company ("Ordinary Shares") at a price of 25 pence per Ordinary Share.

These Ordinary Shares are being held in treasury and it is intended that they will be cancelled in due course.



--------------------

So far they have bought 325K shares into treasury for cancellation. My guess is that they have a budget of up to £250K to buy shares in the market. That would buy approx 4% of the equity at current prices - astonishing. Presumably they are doing so because the shares are cheap and because there is an overhang of shares. Perhaps we have a large shareholder who has stated they want to liquidate a substantial portion of their holding.

Given the fact that NETD is now using its cash like this, it possibly indicates that the much heralded intention of the company to start paying dividends is fast approaching realisation.

[longshanks] 27/4/2011 17:45

some more largish buys today: wonder if NETD is buying back more shares for cancellation.

[longshanks] 20/4/2011 09:06

Confirmation of the "buy" order this morning; company purchased 100K shares for cancellation yesterday. I suspect they plan to purchase a whole bunch more and clear whatever overhang is sitting on this share at the moment.

One would hope they are buying the shares because they have decent cash flow at the moment rather than as an excuse to use up some of the cash sitting on account.

They indicated in the results that they have opened a line of credit to enable them to build up a "credit rating". I suspect they want the share price to become more realistic too so as they can fund acquisitions with equity as well as debt finance.

Equity repurchases don't often assist the share price - but given the market cap of NETD I think it will help push things along in time.

[longshanks] 19/4/2011 18:19

yep - I agree - these low visibility stocks have real merit in turbulent times.

I am quite confident your BJU purchase will pay off (I bought some more myself the other day). BJ do seem to be getting a gradual increase in positive attention as news filters out and analysts take note. MM's appear short of stock (always have done) and whilst I believe Unilever ventures are still sellers, it looks to me like they have raised their price for the next tranche. John Kearon has some complicated equity based loan that potentially kicks in a sale at a share price around £2.60 so I see that as the natural plateau before we see the price really kicking off. It may be my imagination but it appears to me that buying occurs mostly in the afternoon: if so it could be Americans buying stock. I think it is mostly private investors though I am sure we have some stake building by institutions too. My other thought is that buyers could very easily be BJ clients who come into contact with BJ through their work, like the company and buy the stock. Equally it could be a case of buying the stock and then giving BJ even MORE work...


The price action here is also quite interesting. MM's dropped the price yesterday with the final results and suckered in a few biggish sells. Then, much later in the day, they raised the bid back to its opening position. Today the price action appears to have been very much independent of the trades. Online limits would suggest that the market is not too hungry, but I think we have another large order in place (EVT raising their stake?).

[kenmitch] 19/4/2011 17:33

Thanks longshanks. Interesting to see Brainjuicer up today as well. I bought that one after following up your posts.

Boht look good long term holds and not likely to be too affected by general market moves in either direction - as has been the case for EVT too for years.

[longshanks] 19/4/2011 11:49

Could be that Arden have put out a new broker note.

Though I haven't seen it myself I think they would have been fairly bullish for the next 12 months prospects. Their note may also have been taken up by some of the "weekend press" - and today we could be seeing trading ahead of their publication.

Whilst I am currently comfortably "in the money" - I think we need to get above 27p before we can be confident that the 2-year upward trend is back on track. That said, we are now trading above the 200d m.a. and that, together with the 30d and 50d m.a., is now on a positive slope.

Volatility is a bit of a killer with this share though - and whilst we are up gazillions today - we could be down the same amount tomorrow.

[kenmitch] 19/4/2011 10:33

Interesting! No share price reaction to as expected results yesterday, but a significant rise today. Wonder why?

[longshanks] 13/4/2011 12:51

A bit perky today - it looks like the market is preparing itself for the results due next Monday.

I purchased another 8K this morning (showing on PLUS)

[kenmitch] 28/3/2011 10:12

I did look at Brainjuicer but decided against - can't remember why now.

I noticed the share price rise on their results but again didn't look so thanks for the reminder.

TOL was always on a high PE but it didn't stop their share price quadupling.

I'm going to check out Brainjuicer now - possibly too late?

[longshanks] 24/3/2011 15:53

Cheers kenmitch - got in at 21p with a smallish stake. Will be ramping up my holding over time as is my style.

Did you ever get to take a look at Brainjuicer (BJU) as I suggested to you on the TOL thread back in October 2009.

They haven't disappointed in any shape since then and issued fantastic results this morning. Currently they appear to be on the cusp of an explosive period of growth. They have achieved 40% compound growth over the last 5 years as it is - but that may be as nothing over the next five. It may look expensive but on a PER of 20 for FY10 earnings that kind of growth makes it look very cheap. Worth looking at anyway.

[kenmitch] 22/3/2011 16:32

I've only just seen your post longshanks. Agree with you about the potential and if you've only recently bought in you are doing so a good bit lower than EVT. I followed EVT in - far too soon. Haven't seen any research notes and there is rarely any news. You're right about EVT's exceptional ability picking stocks but no-one else seems to have picked up on that and the share price has drifted a good bit lower....... for now!