Danakali Share Discussion Threads

[jayno] 21/5/2002 00:54

Yes I agree your line of thought Oaks. I also think the progress in pursuit of product lines with better margins (and conversely, the halting of progress and/or offloading of low/none margin product lines) is a business tactic contributor-to-value

Jayno

[millionaire] 21/5/2002 00:53

looks like the US are waking up - down we go again.

[oaklandsway] 21/5/2002 00:49

On the 29/06/2001 Danka secured financing through March 31, 2004. The new facility will provide the necessary financing for the Company's strategic initiatives and will allow Danka to emerge from the difficult credit environment it has been operating under during 1998-2001. On that time Lang Lowrey said that "Debt reduction continues to be a principal focus of the Company and we will continue to review all opportunities for additional debt reduction."

Since Lang took his position, debt reduction is part of the company's strategic initiatives and all terms and conditions have been passed through successfully.
The success to implement all strategic initiatives (especially debt reduction) has increased confidance from investors (especially big boys - institutions) that's why we saw more new institutions bought the share. Only stupid student who will say that "debt reduction is bad for shareholders value". Marconi must reduce its current debt until a manageable level before the market give the right value for their inovative products & technology. ICI had to issue new shares to reduce debt (dilute the share price).

In fact, we did not see cash burning at all for Danka's operation. Why need to highlight Danka's debt & its payment plan and use it to scare investors?. The highlight must be as a big achievement, you know? Danka's share price was going up in line with debt reduction.

As I said before that the total leverage ratio of 2.8 is excellent while the bussiness plan for future looks pretty much well in place.

[jayno] 21/5/2002 00:44

We've already seen this jimmy. It comes from an Associate Editor of www.smartmoney.com

Although I would like to see something in it, my accountant friends think it's rubbish

Jayno
DNK (non-shorting) holder

[jimmy28] 21/5/2002 00:40

Coutesy of Fight the fickle on iii

Jim28

A Better P/E Ratio
By Stacey L. Bradford
May 17, 2002

THERE ARE MANY ways to look for value in a stock. The most popular is probably the Price-to-earnings ratio. But this measure can be a bit misleading. As the accounting scandals of the past few months have shown, a company's earnings figures aren't always reliable, even with a stamp of approval from a Big Five accounting firm.

Savvy investors looking for a more complete picture of a company's health often embrace another kind of price-to-earnings measure called the Enterprise value/Ebitda ratio. Quite a mouthful — so let's break it down. A company's Enterprise value is its market cap plus its long-term debt, minus its cash stash. Think of it as the theoretical takeover price, since an acquirer would have to shoulder the burden of the company's debt and would pocket its cash in the event of a buyout.

Ebitda — which stands for earnings before interest, taxes, depreciation and amortization — is basically a company's operating cash flow. Some believe Ebitda provides a better sense of the cash a business is generating than net earnings or raw revenues can. Here's how it works. Since taxes and interest expenses don't tell you anything about a company's core business, they're tossed aside. And depreciation and amortization are also ignored, because they're noncash accounting adjustments.

When you stick these two variables together, you get the EV/Ebitda ratio. A low ratio indicates that a company might be undervalued. It also might indicate that a company is a ripe takeover target. Both scenarios are good for investors.

In our hunt for cheap but worthy companies, we tossed out any stocks with a market capitalization under $300 million and eliminated companies with negative operating cash flows. Next, we required that our survivors boast EV/Ebitda ratios below those of both the broader market and their own industry group. Finally, we wanted companies with improving operating margins, so their most recent operating margins had to exceed their five-year historical average.

After all of this, we ended up with 35 companies, in sectors like health care, basic materials and consumer goods. A few words of caution: Since this is a value screen, it turns up cheap stocks — and many are cheap for a reason. For example, AOL Time Warner's (AOL) stock price has fallen to a three-year low thanks to a slump in its America Online unit and a poor advertising environment. And both Qwest Communications (Q) and Dynegy (DYN) are being investigated by the Securities and Exchange Commission.

So which stocks are worth considering? Whirlpool (WHR) tops our list. Despite climbing 23% over the past 12 months, it trades for an EV/Ebitda ratio of just 5.27. That's about half of the Standard & Poor's 500's ratio of 10.21. The Benton Harbor, Mich.-based appliance maker is poised to benefit from continued strong demand. Total domestic appliance shipments increased 7% in April, marking the ninth month of sequential growth. And analysts don't see demand waning any time soon. Home Depot (HD) also recently announced plans to increase its lineup of appliances, which could boost Whirlpool's sales in coming quarters.

----------------------------------------------------------
Now lets Calculate DANKA's EV/Ebitda ratio:

A company's Enterprise value is its market cap plus its long-term debt, minus its cash stash.

Enterprise value (EV) is : (236 + 304) - 59.5 = 480.5

DANKA'sEV/Ebitda ratio : 480.5 / 107 = 4.49

Market cap: 236 million
Long term debt: 304 million
Stash of cash: 59.5 million
EBITDA: 107 million

A low ratio indicates that a company might be undervalued.
Whirlpool (WHR) tops our list.it trades for an EV/Ebitda ratio of just 5.27.
DANKA'sEV/Ebitda ratio : 480.5 / 107 = 4.49

DANKA THE Most Undervalued Stock around!!!

[blockbuy] 21/5/2002 00:07

waiting for the us imho.

[chestnuts] 20/5/2002 23:19

Oaks what do you think will happen to the price if they sell Danka international

[smoketrader] 20/5/2002 22:33

The US chart looks to be showing a one-day reversal, triggered probably by institutional short-selling in the US this morning. I think it's upwards from here but please don't take my word for it.

edit: except it didn't on that chart because for some reason it's a day out of date!

[sigora] 20/5/2002 22:33

Probably all out spending thier ill-gotten gains.

[ambabe] 20/5/2002 22:32

Don't knock it - Silence is Golden!!!

[easykill] 20/5/2002 22:30

Silence of the bears on the Yahoo danky board is oh so weird.

[pistonbroke1] 20/5/2002 22:25

4 beers, bottle of wine and 2 shots of red eye later - is it safe to go back into the water. Boy what a day

Easykill danky was $3.21 at 4.30 our time

Pist 'n' nearly broke again

[ambabe] 20/5/2002 22:22

around $3.20 ish so we are up since then !! Thank goodness if history prevails we should open around 60p imo and then a slow progression upwards climbing steadily before CC!!

[easykill] 20/5/2002 22:18

anybody know what DANKY was at 4:30pm UK time ?

[ambabe] 20/5/2002 22:07

sigora

You should know by now ff does not answer direct questions!!

I presume he'll be closing his position in the morning like I said before ironic that he'll be helping us out!

[sigora] 20/5/2002 22:04

Come on then FF will you and your buddies be closing your shorts in the morning?.

[oaklandsway] 20/5/2002 22:02

Good question Sigora & should be answered by people who claimed the fair value of 53p. Will they buy (or buy back) under 53p only or will start selling his ISA when price is higher then 53p.

Interesting to read more bashing & moaning tomorrow because DNK could open at 60p or 13% above "fair value".

Be careful with the claim that there will be announcement of big contract on CC this coming Thursday because it could be part of bashers' tactic if nothing will happen.

[miata] 20/5/2002 22:00

Do your research its in the documents published by the company.

[easykill] 20/5/2002 21:59

MIATA

can you please expand on that comment. How do you derive that percentage. Is there a source for such figures ?

[miata] 20/5/2002 21:58

The US accounts for more than 84% of the share float and that is where the action takes place.

[sigora] 20/5/2002 21:50

By the way are there people shorting dnk here in the uk ? if so will they be closing thier shorts in the morning?.

[sigora] 20/5/2002 21:47

Thanks oaks you really are a shining light.