Bond International Share Discussion Threads

[stegrego] 19/11/2007 22:18

Does look very tempting again and the p/es are very low.

However, i guess that the market is now saying that all these companies wont meet next years forecasts and p/es of 8 will turn into p/es of 14.

And a huge asteroid is headed for earth, it seems.

[njp] 19/11/2007 19:36

Doubt any company in this game will tell you that, slap. Quite obviously, though, it won't all disappear in year 2.

[slapdash] 19/11/2007 19:16

NJP - sure but recurring for how long????? one year, two years, five years??? Slap

[njp] 19/11/2007 19:10

Slap

From the recent interims:

'I am particularly pleased to report that in line with our stated objective revenues of a recurring nature, such as software support and rental income, rose to #6,159,000 in the first 6 months of 2007 compared with #3,345,000 for the same period in 2006. Recurring income represented 44% of sales and covered 61% of group overheads.'

[slapdash] 19/11/2007 17:49

hmmm... worry must be that recruitment sector is being hit and thus by default BDI... I.e. the major shares in the recruitment area have fallen a lot... and if they cut IT spend...

just trying to explain it... as I understand bond has little on going revenue it is mainly one off payments for new recruitment software... could someone correct me if I'm wrong

Slapper

[liquid assets] 19/11/2007 14:49

thanks for your reply riv
in general AIM shares of recent have taken an absolute pasting - seems appetite for risk has fallen away (we all know why in view of macro concerns).
quite unpleasant falls around a number of stocks i follow - just look at the HMY price action for starters

[rivaldo] 19/11/2007 14:37

The 2008 P/E is now 8/4...

Liquid assets, I'd guess BDI following the placing have maybe £2m net cash given there was £3.7m of net debt at the interims. The 220p fundraising is now proving an extremely wise move.

In mid-September BDI were able to say:

"'These are strong results with revenues increasing in all the geographic areas
we operate in. With a strong order book and prospect list we see good potential
for the future growth of Bond.'"

BDI is an exceptionally illiquid stock, and the fall has been on very low volumes. There are simply not enough buyers in the market at present, and illiquid stocks are suffering (there are many examples).

With its high recurring income and valuable long-term contracts I find it hard to believe that BDI are not terrific value at these prices.

[johnv] 19/11/2007 14:01

duplication

[johnv] 19/11/2007 14:01

WHY been dropping as well, but issued a good trading statement, so this fall could be just due to sellers/market and not company related

[kruger2004] 19/11/2007 13:52

this fall is exceptional; around 25% in the past month. Should the company not issue a statement that they are not aware of any reason for the fall, if there isn't one?

[greengiant] 19/11/2007 13:36

Bought back in - I remember when these were £1.20. There is no reason why these can't head back to the £2 mark. Looking like they are exceedingly good value at the moment

gg

[liquid assets] 19/11/2007 13:08

looking at this and at the interims reported in sep. looking decent value (perhaps) here but 140 on chart looks possibly where we are going first stop ?
eps was essentially flat from those results ? basic i know and prob reasons for this lack of growth..but these single digit pe's do exist - look at FIO.
rivaldo, what out of interest do you believe the current net cash balance to be ?

[johnv] 16/11/2007 21:06

beautiful trend.... but were going in the wrong direction.

[stevemarkus] 16/11/2007 15:14

Yes, starting to look quite tempting. I suspect most are waiting to see where/when the market bottoms out though, before buying. Although I have been buying over the past few days (not more BDI yet though), it has only been small volumes since I want to make the most of my available cash. Waiting and watching....

Steve.

[rivaldo] 16/11/2007 12:34

Now on a 2008 P/E of 9, with a healthy net cash balance to boot. Long-term investing can be a pain sometimes (even if I am still almost 100% up)!

[rivaldo] 13/11/2007 09:23

Yep, consensus is 15.1p EPS for 2007 and 17.2p EPS for 2008 - and we're almost in 2008 now for what will be a current year P/E of 9.5 at 164p. Crazy imo.

Polzeath's post I believe hits on both the reason for the current price and the golden opportunity, since it represents a misapprehension. As he says, BDI is "seen as" being focused on a cyclical sector. But:

- almost 50% of revenues are recurring
- the expansion into the corporate recruitment sector is separate, has huge potential and is non-cyclical
- BDI has expanded into other non-cyclical areas via the purchases of Gowi, Strictly Education etc
- BDI has only recently won huge new contracts with Manpower and Hays, giants in its target market, ensuring forward visibility of earnings

Above all, BDI is a market leader in its sector unlike most quoted software PLCs. Not only that, it's a worldwide leader, not parochially British, with offices in the U.K., Australia, South Africa, Hong Kong, the U.S. and Canada.

It's also introduced and introducing a variety of new products over the last year.

And Fidelity were recently confident enough to invest £5m in BDI at 220p.

All of the above are reason enough for me to be confident that the current price is just silly!

[polzeath] 13/11/2007 07:05

Barclays has got the same forecasts as Riv so I guess that's consensus, been watching these having been a holder not so long ago.

I guess BDI is seen as not just in the software/ computer services sector but also has a very specific focus on the recruitment market. Recruitment companies are generally doing terribly badly, no doubt anticipating a downturn in recruitment for a while ahead, so I guess this has rubbed off on BDI. See IMP, OPD etc.

Sourspot as opposed to sweetspot?

Looks good value at the moment but I imagine there are further falls to come before it levels off. PER of 8x going forward (YE Dec 31) really would be getting cheap but not impossible with a bit of doubt starting to creep in on the 'E'. Implies share price of 138p which looks a more natural area of resistance (see July-Nov 06).

[westcountryboy] 12/11/2007 23:02

14p according to Hoodless Brennan, rivaldo! So I really don't think it's that ridiculous - well, not more so than a dozen of my smallcap holdings, alas...

As I have written before, most quality software companies are trading on PE of 10 so I am not surprised to see this fall back to this sort of valuation. The chart suggests two possible bottoms, one reached tonight and the other at 150p. I think it may be time to put a toe into these, even though the general market is hardly encouraging.

[rivaldo] 12/11/2007 11:26

Recurring income must be approaching 50% now with a full year of Govi and Strictly Education, which also reduced such exposure to the recruitment sector as there was. And there's the £5m net cash raised at 220p.

Definitively a single-figure P/E now for 2008 on 17.2p EPS, and approaching the same for 2007 with say 15p EPS.

BDI is at a ridiculous price now imho!

[rivaldo] 08/11/2007 10:37

Even more compellingly attractive now!

[njp] 07/11/2007 19:31

Well said, boadicea. Starting to look compellingly attractive.

[boadicea] 07/11/2007 17:31

With a proportion of income denominated in US$ it is not surprising that some pi's may get nervous about the effect on BDI's margins. However, that proportion is only about 25% of revenue according to the latest half year report and some of it will be offset by equally devalued dollar expenditure. There are many other companies with considerably greater exposure to the dollar.
The valuation of the shares has never looked stretched and I therefore remain relaxed about the fortunes of BDI.

[rivaldo] 07/11/2007 09:27

The 220p fundraising is looking like a masterstroke now!

I suppose it's a matter of small-scale selling from investors who haven't had a news fix for a little while.

Meanwhile BDI are barely on a double-figure P/E for the 2008 year starting in 2 months' time (17.2p EPS consensus). With all that recurring income, long-term contracts with Hays, Manpower etc? Hmmmm.....

[rivaldo] 05/11/2007 14:20

Ho hum. Down again on ridiculously small volumes. Time for another bounce per the chart :o))

From post 1437 it seems that BDI's new Adapt Financials is increasing the gap over the competition:

"Industry first: - Unlike other products currently available that have zero or limited configurability of front office functionality, Adapt offers full configurability in the front office to maximise productivity, with data flowing through automatically to the built-in back office."