ECX - ECLIPX GROUP LIMITED

[blacksheep]

Getting punished today to the tune - currently - of 42.35% following revised FY18 NPATA guidance

 

Eclipx Group Limited (ASX: ECX) advises that, following completion of a review of its most recent trading

performance, it now expects to report FY18 NPATA in the range of $77m to $80m (+13% to +17% on

FY17), compared with the previous expectation of +27% to +30% growth.

 

GraysOnline auction activity is being affected both by a ten-year low in bank-initiated insolvencies in

Australia and the current buoyant construction sector where large plant and equipment is being deployed

for longer periods in infrastructure projects, resulting in reduced auctioned equipment disposals.

 

Right2DriveÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s result will be more moderate than our previous expectation, reflecting a more challenging

environment from new competitor offerings by some auto insurers.

 

Eclipx expects to release its full year results in early November 2018

 

https://www.shortman.com.au/stock?q=ecx

[blacksheep]

SP bounced briefly yesterday but back down today @ $1.87 -6.02%

Noticed 2x notable short alerts Tues & Wed

Wed 8th Aug, 2018 4,266,422 319,636,693 1.33% 24,508,569 17.41%

Tue 7th Aug, 2018 6,654,189 319,636,693 2.08% 57,091,539 11.66%

https://www.shortman.com.au/stock?q=ECX

[JSB]

I think it's worth having a bit of a tyre kick at this one around these levels.

 

Assuming another downgrade and flat NPAT growth YoY still puts it on a PE of 11x - day before downgrade it was ~12x the mid point of guidance (taking into account it was trading around 52 week lows). A touch under 9x currently if it meets the revised guidance.

 

Slowdown in GraysOnline makes it look an expensive acquisition. $1.7b in debt looks bad at a glance for a MCAP of $600m, but $1.3b of it is secured against $1.63b in cars and equipment. How quickly they can liquidate the assets to repay the notes is certainly something to take into consideration.

 

Not sure it will see $3+ again in the short to medium term, but $2.40-$2.50 looks achievable to me?

[blacksheep]

Yes - watching for it to settle and those shorters are done

[blacksheep]

Renaissance Smaller Companies became a substantial holder with 7.31% - date of acquisitions 7/4/2018 - 7/8/2018 so some were purchased at higher prices before the plunge.

Likewise Pendal Group Limited - theywere buyers on the day of the plunge - 7/8/2018

 

Our Philosophy

Renaissance Smaller Companies employs an active approach to investment management, adopting a ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¹Ãƒƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“bottom upÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢, value based philosophy. Renaissance's investment philosophy seeks to exploit market inefficiencies that result in security prices deviating from an assessed valuation. This approach reflects the belief that, in the absence of structural change, security prices will ultimately tend toward their valuation through the course of an investment cycle

http://www.renaissanceasset.com.au/smaller...#our-philosophy.

Pendal Group Limited

https://www.pendalgroup.com/about/company-history-profile/

[blacksheep]

Another notable short alert yesterday

 

Thu 9th Aug, 2018 3,576,824 319,636,693 1.11% 10,174,252 35.16

 

https://www.shortman.com.au/stock?q=ECX

[JSB]

Second director to purchase on market after the downgrade:

 

Gail Pemberton acquires 105,417 shares @ $1.90

 

https://www.asx.com.au/asxpdf/20180810/pdf/...72lpf2b25wj.pdf

[blacksheep]

There were some take over rumoiurs in The Australian Dataroom this morning

Eclipx crash stirs takeover talk

data room dink for web

BRIDGET CARTER, SCOTT MURDOCH

A crash in the Eclipx Group share price last week has some betting that the company is ripe for a takeover.

 

If these rumours become reality, shorters are in trouble - short positions @ 9 August = 3.27%.

Wed 15th Aug, 2018 1,249,255 319,636,693 0.39% 2,703,962 46.20%

Tue 14th Aug, 2018 2,556,612 319,636,693 0.80% 5,718,127 44.71%

Mon 13th Aug, 2018 1,833,231 319,636,693 0.57% 7,017,540 26.12%

Fri 10th Aug, 2018 1,896,164 319,636,693 0.59% 4,599,984 41.22%

Thu 9th Aug, 2018 3,576,824 319,636,693 1.11% 10,174,252 35.16%

Wed 8th Aug, 2018 4,266,422 319,636,693 1.33% 24,508,569 17.41%

Tue 7th Aug, 2018 6,654,189 319,636,693 2.08% 57,091,539 11.66%

https://www.shortman.com.au/stock?q=ecx

[JSB]

Thanks for the link Blacksheep.

 

Picked up a (very small) parcel last week thinking $2.50 per share was par value. Happy now, but I'll be happier if SG Fleet back me up on that!

[blacksheep]

You're welcome, JSB.

 

Hope this "rumour" is not like the Glencore "rumour" although that rumour did wonders for the SP of a certain sector