Dmatek Ld Share Discussion Threads

[gerdmuller] 05/9/2008 09:26

From what I have seen I agree RCG does look like a good long term bet (or even short term trade) at these levels. But as my online ISA account does not allow me to trade AIM companies I don't bother to pay much attention to them.

[spaceparallax] 04/9/2008 19:55

Both excellent companies.

[woracle] 04/9/2008 18:20

LOL Gerd..bit touchy today ! I was very balanced about RCG and DTK back then and I even agreed cashflow was not perfect 18 months ago but going in the right direction..and boy has it ! I also said it was more ambitious and cheaper than DTK back then.. and boy is it ! even at 150p :) Remember DTK was 170 back then.

Lets just say 150p for RCG will still seem cheap within 6 months after HK listing and full year is published, and I suspect it will be overtaking DTK's price within 6 months. But what do I know...only time will tell. But I know which one I would put my money on to go through 170 first :)

[spaceparallax] 04/9/2008 15:05

Just returned from hols and really pleased with the H1 results - as has been said, when stripping out the cash mountain, we have an extremely low PER and great PEG.

[gerdmuller] 04/9/2008 09:48

No, just had a quick look back and guess what it was Voracle. Did not buy becuase I told V that cash flow statement was dodgy. Went to about 50p after that.

Ah well, what do I know!

[gerdmuller] 04/9/2008 09:19

Just glad I did not buy a year ago when someone on here was raving about it when it was 150p.

[napoleon 14th] 04/9/2008 09:00

Have some RCG too, & that 25% took 6 months to come about!
I agree on the fundies.

[woracle] 04/9/2008 01:35

LOL Gerd..thanks for the lecture. As I said I sold and topped up more RCG when it released its results on Monday. Its a market, companies ARE competing for the same cash from investors. Does RCG answer your questions..has better track record than DTK since its arrival, faster growing markets, is not being hit in downturn as proven this year, lower PEG, lower PE valuation. Not on LSE but more liquid than DTK and will be on HKSE soon. Decision so far so good.. up 25% this week. Can only dream of DTK at 170 next 6 months without a catalyst. DTK is a solid 15-20% sustainable growth company, but if noones buying..there is better value elsewhere. Not just RCG. Lecture all you want and keep waiting, I'm sure your patience will be rewarded. I just think i will be rewarded better elsewhere. Good luck here !

[elmfield] 03/9/2008 14:04

I sgree and that is why I am still a buyer, small amounts as regular as possible!

[napoleon 14th] 03/9/2008 13:18

Low valuation, however you hang your hat...

[gerdmuller] 03/9/2008 11:37

WE ARE IN A BEAR MARKET.

I am only glad when I see some of the comments on these bbs that management is running this co and not some of you people.

Management has created growth through exceptional cash flow creation and in so doing been able to expand though acquisition and organic growth. This has worked extremely well and yet all we seem to get is a call for dividends or the hope that the company is acquired.

Please tell me where you will get a better potential return in the next 5 years with the proceeds of a takeover.

What is the point of a growth company paying a dividend and then immediately diluting earnings by issuing more shares to make further acquisitions?

On PEG factors, you don't like or use them. Then what valuation yardstick do you employ? I never here any advice on this.

You are saying that you don't consider either past and potential earnings growth or the pe ratio of much value.

This was often the argument during the dotcom boom. Established valuation tools do not matter was the cry. A company can trade on a pe of 100 and a peg of 4 because times have changed. A peg of 4 is the new 0.5.

Well I used them then and that is why I made money while others were wiped out. We are now seeing the inverse of this argument because we are in a bear market.

There may be a lot of companies on pegs of 0.5, we are in a bear market.

PEG factors should only really be applied to companies which are true growth cos and have demonstrated eps growth of over 20 per cent per annum in the past 5 years. DTK has far exceeded that and is on a forward pe of 10. Of course estimates may not be met but that is why companies share prices are so depressed. If you want certainty then put your money in the Northern Rock.

I would like to know which other companies have the eps track record of DTK and the same potential market growth and possibly will be hit less during a downturn. I would welcome advice on similar companies on this valuation which are traded on the main London market and not AIM.

Of course the price may fall but there is no need to watch the share price on a minute by minute basis. Eventually price converges with fundamentals and this has gone from a very extreme valuation a few years ago when eps was low to a low valuation at present.

[napoleon 14th] 03/9/2008 09:47

woracle - I gave the PEG one short line, but in the specific case of DTK it refers to an expanding market with risk-free clients - gov'ts & penitentiaries!
IMHO a PEG is a reasonable indicator, relevant in this case.

Divis : What I mean is the share price would benefit from being a good divi payer; lots more folk would be interested. So, with a "fully valued" SP, DTK could better grow by acquiring bsinesses in paper deals.

Added to which, this one's immune to any sterling crisis.
210 still looks a matter of time to me, when not if.

[yangou] 03/9/2008 01:57

I agree with you to some extent about pegs woracle. That there is more to a companies future than this particular value. But also that this must be the wrong share for you to be in if its dividends you are seeking. There are some very good shares you can buy and keep through the ups and downs which provide a good divi and you dont need to do a thing or loose much sleep over . But this type of share is for Growth where the aim is to out perform divi shares and much more.
Good luck with your choice of share

[woracle] 03/9/2008 00:58

They will never pay that level of dividends whilst they consider themselves a growth company. But they could still pay maybe 2p or something sensible for a company at this stage of growth.

I don't see why people rate PEGs. Does anyone still really use them ! By themselves they are overated and misused, especially these days where analysts forecasts are so bad and consistant sustainable growth is less unpredictable in recessions. As a comparative to the market its a decent measure. The % of shares on PEGs of 0.5 or less is probably at an all time high, so u could say that is the new '1'.

[napoleon 14th] 02/9/2008 23:50

IMHO a nice divi covered twice by earnings in finals would impose a rerating.
That would allow an all-paper bid for expansion.

True about the trading range, but a lot steadier than most.
Cleverer than I have T1= 210p. With the finals?

And that PEG.................

[woracle] 02/9/2008 19:56

Its been in a trading range for almost 4 years if u forget first half of H1 2007. Needs a big catalyst.. dividends, takeover or something, else could be another 4 years. Even some director buying would help. I really thought proving to the market they can succesfully integrate an acquisition and be a bigger player would do it, but the lack of volume post results suggests otherwise.. maybe the next aquisition to double its size again, wait another year to bed down etc. There are indications they are looking for another acquisition soon.

[swebb99] 02/9/2008 19:39

What makes you think its nearer to break out elmfield ?

[elmfield] 02/9/2008 15:23

have to agtree but our time willcome so happy to hold and keep topping up, this is nearer and nearer to a break out, imv. Just can not say when!

[steve61] 02/9/2008 14:40

Swebb, DTK was the same when the market was bullish. Repetetive cycles of getting back to around 135p after a year of contract wins and a good set of results, followed by a six month drift before more contract wins, then another drift until another set of good results to get it back to square one, and so on and so on.

[swebb99] 02/9/2008 13:00

Can't disagree with anything you say but when the market isn't on your side then its like swiming against the tide. I might be tempted to grab a few again if it drifts below 115.

[woracle] 02/9/2008 11:01

Well, looks like another 5 months of drifting as I can't see a catalyst changing the trading range. Unbelievable results and progress from another RFID play RCG yesterday and had to get funds to top up there so sold here yesterday. This is a decent business but had to get funds and weighing up which was likely to be the better performer over the next 12 months and decided to sell. Good luck to you patient long term holders.

[elmfield] 30/8/2008 10:45

David Schwartz: The headlines don't always tell the story
Published: August 29 2008 18:39 | Last updated: August 29 2008 18:39

Short-term traders often monitor breaking news stories and sudden price movements in order to anticipate what lies ahead.

But, sometimes, a better approach is to ignore headlines and big price swings. We appear to be in such a position right now.

The FTSE 100 rose 135 points the Friday before last, just ahead of the bank holiday weekend. The main news on that day was that the UK economy had shuddered to a halt after 16 years of growth. A rally of that magnitude is not the reaction one would expect from such dismal news.

Shares then turned tail and fell 136 points the following Tuesday morning when traders returned to work, completely reversing Friday's gain. Some commentators claimed the trigger was worrying developments in the US financial sector.

I found their analysis hard to swallow. Why would the UK stock market fall 2 per cent in a few hours on information that had dominated the front pages for the last 14 months? It is worth noting that the main indices clawed back virtually all of last Tuesday morning's losses by the end of the day.

For a clearer picture of what is going on, it pays to ignore individual daily price swings and look at the broader trend. Indices such as the FTSE 100 have been zigging and zagging sideways for the past five weeks.

I have no complaint. Trading ranges please short-term traders like me. They provide clear-cut guidelines about where important support and resistance areas are positioned. These are useful reference points for trading purposes.

But support and resistance lines, by themselves, do not provide me with clear-cut advice on what action to take regarding specific shares. Good judgment is also required.

Regular readers may recall that I recently purchased shares in Dmatek. The company is leader in the electronic people-monitoring technology industry. Its products are used in law enforcement and elderly care business segments in the US and Europe. I bought the shares at 104p on July 15 on the strength of an optimistic trading statement. The price has risen almost 40 per cent since. The latest leg of the rally was triggered by last Tuesday's interim results showing a fivefold increase in first-half profits.

I have little doubt that a weak prior-period earnings report enhanced last week's whopping increase. Even so, the flurry of early morning buy orders as the Footsie fell 136 points told me that some traders were caught by surprise. I now face a hard decision. Should I take my money or gamble on further price rises?

On the positive side, Dmatek has fine long-term prospects because electronic monitoring is the way of the future. And the left-hand chart below shows the share price has just penetrated a well-defined resistance line after a slew of failed attempts since mid-July.

But it's not all good news. Dmatek's recent gain would be classed as huge in any circumstance. So, the share-price performance of the past six weeks may prove as unsustainable as it has been sweet.

The second chart highlights another concern. Note that Dmatek shares rose by more than the FTSE 100 in each of the last five short-term rallies. Unfortunately, the shares typically peaked before each Footsie rally ended and fell by more than the Footsie on each retrenchment.

I worry that the broad indices will soon turn down. If Dmatek follows past form, its shares are due for a big dip as well.

For the moment, though, I sit and watch. I moved my stop-loss level up to a whisker below current levels. Any short-term dip will be my exit music.

The trouble with this stance is that I risk being whipsawed as marketmakers briefly lower prices to shake out nervous traders. There is nothing more frustrating than seeing prices rise moments after clicking the sell button. Whoever said short-term trading was easy?


Stock market historian David Schwartz is an active short-term trader. Send any comments or suggestions to [e-mail]

[elmfield] 29/8/2008 16:30

I tried but they did not want to part with any.

[elmfield] 29/8/2008 16:09

mms playing games, trying toget sellers in my view, hold/add.