Trakm8 Share Discussion Threads

[woodcutter] 24/2/2017 09:34

mm i have no quarrel on investment style we all have to find what works for our own personality and if LTBH works for you through thick and thin then fine i agree you have to stick with it too.

notwithstanding that and taking aside the chart the fundamentals do appear to have changed and there does seem to be some serious question marks over watkins ability to steer the business forward.

i had a very bad investment experience many years ago through getting too close to management and believing the story, it was a classic case of cognitive dissonance only seeing what i and they wanted to see. It cost me dearly. As a result of this i only ever use the financial numbers and the chart now.

The fundamental questions here for me on TRAK are;
is route monkey of any benfit to the business why was it bought
has growth slowed/stalled
why are the products late
are the products being over engineered
why was the sales force not developed more steadily over a reasonable time frame rather than what appears a significant recuitment campaign.

It appears to me from the outside that the product was essentially selling itself then the market stalled at a point when they were recruiting why didn't they see that coming, are they close enough to their clients

One of the most worrying things for me is the product development. The most obvious point here is that the product is supposed to save their clients money yet whilst they seem to be adding value to the product they are also adding complexity and probably cost.

i liken it to a washing machine........it has ten programmes but you only ever use two.

for my sins when i worked i was fortunte to manage a few engineering businesses in the capex sector and our mantra was "keep the design simple" And most importantly all these businesses were sales driven not engineering product driven. I suspect that's the difference between TRAK and QTX but i could be wrong.

In a nutshell i do believe the story has changed for the moment. will it get back on track? i'd like to think so but i'll let the financials and the chart tell me that.

woody

[lukead] 24/2/2017 08:20

My, my Michael, you are still in the land of the living, i thought you might have suffered badly given the circumstances and trying ever so hard to sound , shall we say, sanguine, lol

[michaelmouse] 24/2/2017 07:46

Woodcutter - I think my point was very clear. I would agree that share prices don't reach infinity and beyond, but a long term buy and hold strategy works brilliantly if you pick the right companies i.e. "falling in love with a share". As I previously said, it's important to watch the story. Clearly if you think the long term growth story has changed then it's time to re-evaluate.

With trakm8 I don't think the long term story has changed.

If your strategy of following charts works for you then stick with it, but I can assure you that my method has worked brilliantly for me over the years.

Just one thing though. The basis of my strategy comes from the great investors such as Ben Graham, Warren Buffet, Peter Lynch etc. I haven't made it up myself, I've just tried (mostly) to apply it to smaller companies.

Good luck with your method though. If a style works for you then stick with it.

[luckymouse] 24/2/2017 01:50

For those who love charts lol - Weekly 3 Line Break - good trend tool

[apad] 23/2/2017 23:03

"UK telematics" produces Quartix as the 4th entry, P :-)
Note that there is a significant difference between low margin, insurance, routine trackers and systems that process data into a form suitable for company back office use.
apad

[pugugly] 23/2/2017 22:42

APAD: Many thanks - Initial Google searches certainly show market is very crowded. For interest neither TRAX nor QTX showed up in the first 2 pages- with a search for "telematics fleet management route planning UK" TRAK was half way down the 3rd page
6 pages gone and no sign of QTX yet.

I appreciate what you say about buy -v- organic. I instinctively favour the former as your staff should have far greater understanding and knowledge of the product- especially if a small coy - Sometimes however large coys think they have to buy in and end up losing the farm - The worst example I got caught by was Marconi during the internet bubble when the clever directors bought a load of duff software coys and went bust in short order. Small coys can also fail to develop the product to a meet customer requirements and/or fail to SELL it and so go bust - eg:Infobank - An old mate of mine (who was involved in the coy )made it to the Times rich list one year and then to obscurity the next !!
Sorry off TRAK ! but looks like I will have to look very much more closely at TRAK management and business structure.

many thanks to all those above who have given of your time and advice.

[woodcutter] 23/2/2017 22:32

APAD well done PRV is one of my largest holdings HLMA reasonable size. Out of ABC as present.

fwiw my final point imho and it's only an opinion
There are only two things that tell you how well a business is doing
1 The financial reports, principally the numbers
2 The chart

You have to assume the first is correct, by the way sometimes it isn't like RCN recently.

The second is fact.

My experience is you can spend all the time you want talking to the company and trying to get a feel for the business detail,i've been there with that and been disappointed and let down in the past. Directors only tell you the positives. You will never get to know what's really going on in a business most of the detail is discussed in corridors between directors. Yes visiting the sites can be helpful but going to the AGM is pointless imv.

My present decision making and judgement is like most peoples, coloured by their experiences.

woody

[hydrus] 23/2/2017 22:19

Interested in QTX report APAD, good management. Not expecting much from it though.

[apad] 23/2/2017 22:15

pps
Woody, I have large holdings in ABC, PRV & HLMA :-)

[apad] 23/2/2017 22:13

ps
QTX is only 1.5% of my portfolio and I shall not increase it as the area is so competitive. Hopefully it will grow, but if it stumbles I'm out.

[woodcutter] 23/2/2017 22:12

Hydrus appreciated, agreed everyone has to find what works for them, simlarly good luck and happy investing recpirocated.

woody

[apad] 23/2/2017 22:06

Same area, P, but entirely differently managed - they make a fascinating comparison. QTX develop their own systems from scratch and are extremely prudent.
TRAK are gung-ho for orders and, in my opinion, the management does not fully understand the systems they have acquired. In essence it is acquisition vs organic.
FWIW I have increased my holding in QTX a number of times and have never held TRAK, but I feel I have learned a lot from looking at the two approaches.
apad

[hydrus] 23/2/2017 22:04

Woody, I'm pleased you've found a method that works for you. No offence, but I'm not in the least bit interested in it. It's not how I invest, nor how I want to invest. I'm interested in finding successful businesses and not at all interested in the vagaries of share price patterns. Save you energy. Good luck with your approach.

[woodcutter] 23/2/2017 21:55

Hydrus this may help you understand my TA strategy.

Firstly i would never invest in a business that didn't have sound fundamentals and a decent business prospect. The balance sheet and cashflow statement have to be quality or at the very least reasonable. I like niche businesses with decent margins and limited competition a good "moat". The TA is to determine the buy sell positions.

Despite all the protestations TRAK has gone from a high growth business to a questionable growth business. This is borne out by the FA and investor sentiment i.e the TA.

As I'm sure you know there are four recognised stages in any share price move, sometimes some of the stages are very brief.

1 consolidation range bound pricing
2 breakout to uptrend
3 consolidation at a higher lever and range bound pricing
4 then either continuation of uptrend or reversal to downtrend

My philosophy it to buy in at the uptrend no matter whether it's a FTSE100 or microcap share and stay investd whilst that trend continues. When the share price reaches consolidation stage 3 i'll then take a view whether the fundamentals support a reasonable time frame return to trend. If they don't i'll sell if they do I'll follow the chart pattern for a while and see how it pans out. If it breaks trend down I'll sell. if it breaks trend up and a return to phase 2 i'll continue to hold it's that simple.

I've kept a strong library of shares i've held that have quality buinesses and good management but they aren't always in stage 2. But when they are i'm buying them.

wc

post note look at the five year charts for these co's
GHH
HLMA
DPLM
ABC
PRV
FOUR

There are many more

[pugugly] 23/2/2017 21:51

APAD: Thanks - I had not come across QTX before - If I may ask how do you rate the companies against each other? Interesting that both have fallen significantly this year.

On a technical point FinnCap is broker and nomad for both - Same area - Surely this might be construed as a conflict of interest "Chinese Walls !!!???.

Looks as though I am going to have a busy night digging.

FYI Just gone into one of my very old databases - You may be interested in my then comment "FIRST DAY OF DEALINGS Nov 29 2005 File opened re losers 26/3/07 at 20/30 mc £2.9M (spread far too wide – what is wrong - ? accounting/cash flow to be investigated) "

One of my mantras is "It is very often about timing !!!!) Very true - could have multibagged IF IF IF but we all have our cupboards filled with IF's.

[apad] 23/2/2017 21:34

QTX results on Monday will be an interesting comparison.
I've been trying to use MACD as a way of timing share buys in companies I am confident about and that are not moving in trendlines like TRAK. I'm not sure one needs to be much of a TA expert to be frightened stiff by those charts! I really like big dips without trends in great companies :-)
FWIW I tend to be easily frightened by uncertainties and difficulties and get out - there are plenty of good companies out there. If I am convinced I can be very aggressive in buying, even with significant risk (e.g. Bioventix).
Where I am not so good, and where TA could help me, perhaps, is in cyclical industries where it is the context that is driving the trend and not the quality of the company.
Anyroadup, I am a big fan of developing one's own approach and refining it over the years.
apad

[pugugly] 23/2/2017 21:28

Having read much of the above thread and the latest trading updates I have not been able to find pertinent details of competitive offerings and a SWOT analysis of the Trakm8 proposition and products, compared to the competitors - Can any resident expert point me in the right direction.

A significnat worry is that th house broker FinnCap reduced their target by a whopping £2:45 pence from 425p to 180p. Message received is that for a housse broker to reduce by that amount is that there are VERY serious problems so the current price at 73/74 may still have further to fall given the usual "rose tinted glasses" used by house analists.

[hydrus] 23/2/2017 21:10

Woody I never pay attention to charts I'm just interested in the business and it's prospects. This has worked for me over many years. Like I said I accept people have other approaches. I just recoiled at your post which seemed to suggest investing is all about trend analysis. Good luck.

[woodcutter] 23/2/2017 20:49

hydrus no problem

i have no problem with LTBH provided the retracements are within the fibonacci range once they move outside that it's not a retracement it's a change in trend.

Would you LTBH any of the major banks or miners or oilers i think i know the answer to that. So why is it different for a stock like TRAK

follow the trend and the TA. some trends can last for five years or more before there's a significant break. TRAK isn't trending up any more indeed quite the opposite.

for the record i like the business i was heavily invested at one point but had i continued to hold i'd be well underwater now. if the chart trend changes i may well re invest, lets wait and see how it moves.

if you wish a comparator look at QTX it too has fallen but only 50% what does that tell you about the sector, perhaps the anticpated growth isn't there. more importantly why has QTX only fallen 50%..............broader markets and better managed perhaps!

woody

[hydrus] 23/2/2017 20:29

'Their'Woody our posts crossed but funnily enough we both used patronising

[hydrus] 23/2/2017 20:28

Patronising - 'investing' by trends is just one method. Not a holder here but it is correct to say that pretty much every company that has increased its share price by 100 fold (and there are many) has had periods where the company has stumbled and share price has dropped by > 50%. I am not saying this is one of them but holding through thick and thin is an entirely reasonable investment approach if you feel the long term potential hasn't changed. Each to there own

[woodcutter] 23/2/2017 20:27

If you bought this at the outset and watched it go to 400p and are still fully invested you need a crash course on TA.

By the way many of us have been investing for 30 years or more and have a number of mutibaggers to our name. nevertheless we don't need to float it on these boards it smacks of insecurity and is to use my vernacular "patronising"

woody

[woodcutter] 23/2/2017 20:19

and your point is?

I thought the general principal to making a return on your investment is to buy low and sell higher. There is nothing untoward against buying stocks like TRAK in the early days on the trend and then selling once the trend is broken. If the trend then redevelops you buy in again. If you buy in three quaters through the uptrend and it breaks you get out............that's common sense investing

A little review of Stan Weinsteins writings might be helpful along with a shed load of other informed investors on trend following.

This uptrend hasn't just broken it's been smashed and it's now clearly in a downtrend which has yet to reverse. And if you wish to use fundamentals 17p eps was forecast for this year not that long ago what happened there?

If at some point the trend reverses then I'll be happy to re-invest.

In the meantime whilst some here are watching their investment decline in value I'll be making investments which will hopefully appreciate in value using the proceeds from my sale here in TRAK.

LTBH is fine IF the trend has a minor break and re-asserts itself but when the break is this significant LTBH is a little foolish.

The share price is now where it was in May 2014.

I give you a further synopsis
I am a current holder of PRV from around 300p adding a few times as the trend rose.
In 2001 it was just over 400p
It has traversed up and down over the years and been as low as 47p
It is now over 500p

by your thinking i would have bought in 2001 and held to present day for a princely gain of 25%. Great, what a fantastic return over 16 years. I'd have done better leaving it in a current bank account.

I think you need to wise up and rethink your investment strategy.

woody

[michaelmouse] 23/2/2017 15:16

"without wishing to sound patronising we've all been there falling in love with stocks we think will trend upwards forever."

I fell in love with Avesco all the way up from 20pish to the eventual take-out price of £6.50. In fact I wish I'd stayed in love with quite a few more companies in my early days.

"Til takeover do us part" could be another mantra.

Ashtead is a big regret for me. I eventually made a modest profit before we went our separate ways. However, given that at one stage you could buy the shares for 1.5p then even a £1000 flutter would be worth north of £1,000,000 today.

Anyway, I digress.

To an extent I'd agree with "don't fall in love with a company". However, only if the long term fundamentals have changed.

With regards to Trakm8, despite the nonsense talked on here and elsewhere, the company is still in a sweet spot regarding long term growth and its client list (and retention of clients) speaks volumes for the quality of its offering.

This year's results are disappointing, and there is still an execution risk, but the worst case scenario I'd guess would be a takeover. I'd maintain at this stage that £5 would be a minimum. The progress of the company since I bought in has been outstanding. Every long term story has one or two blips along the way. See the charts of any of the best performing buy and holds. p.s. I love that Peter Lynch quote, "charts sure are great for predicting the past".



I've got nothing more to add to the blog I wrote following the interims.

Let's all re-convene in a few years time shall we and see how the fortunes of a number of companies have panned out?

blondeamon - Good post 1284.

[loglorry1] 23/2/2017 12:23

I have to confess I held these for a year at an average of 145p and sold on the news. It's not my normal investment but I liked the story and was cheap based on growth projections. They haven't delivered growth so I had to sell and take the loss. Not a big position but annoying regardless. Good luck to those who remain in.