• Australian (ASX) Stock Market Forum

ISU - iSelect Limited

Discussion in 'Stocks I-P' started by System, Jun 19, 2013.

  1. System

    System Administrator

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    iSelect is a leading Australian online-driven comparison service. Its service provides comparison of both price and product features for a range of:
    • Private health insurance and car insurance products; and
    • Household utilities and financial products, including life insurance, broadband, home loans, personal financial and energy products.
    Proposed listing date: 24 June 2013

    http://www.iselect.com.au
     
  2. Chris1zillion

    Chris1zillion New Member

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    I don't like how they don't have a sister site for comparing meerkats!!
     
  3. McLovin

    McLovin Well-Known Member

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    These guys have recorded profits since 2009 but every year they have had negative OCF. The accounting around recognition of revenue looks "interesting" too. If I'm reading note 2(e) correctly, they have, in the last fy, changed their revenue recognition on trail commission from being when the customer starts paying to the fund, to the point at which the customer is referred to the fund. A little too creative for my liking.

    Their single biggest asset is npv of trail commissions, this is a somewhat rubbery number with plenty of room for adjusting to make things look a little better.

    These guys paid $33.5m for Infochoice last year. Infochoice had revenue of ~$5.3m and made a loss of $0.5m.

    It's a pass for me.
     
  4. DJG

    DJG Well-Known Member

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    Or a good short if it becomes available...

    When I first read they were being floated I found it somewhat a stupid idea, without even reading any financial statements.
     
  5. McLovin

    McLovin Well-Known Member

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    They reported yesterday, missed revenue. Hard to believe you can do that when you float with 8 days to go before EOFY.

    Interesting article in the AFR about there accounting practises. And some of the other inner workings of the company...

    - - - Updated - - -




    Hmm...lending money to someone to buy stuff off you...I believe in the 1980's they called that a round robin payment.

    http://www.afr.com/p/business/finan..._rollercoaster_ride_of_sRWUpMxhAr0mazrtrZ6aJK
     
  6. craft

    craft Can't re Member

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    Ebitda 25 Million vs OCF of 832 Thousand.

    107 Million Trail commissions on the balance sheet and a corresponding 32 Million in Deferred tax liabilities. (If it ain't good enough for the tax man.....)

    Customer financing

    Who buys this junk?
     
  7. McLovin

    McLovin Well-Known Member

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    EAX don't look so bad now, does it!:D
     
  8. skc

    skc Well-Known Member

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    I'd be wrestling rhinos if I bought shares in iSelect's IPO...

     
    Last edited by a moderator: Dec 30, 2016
  9. ROE

    ROE Well-Known Member

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    Yeah those articles keep me away :) too many red flags

    AFR do some good stuff sumarise it all in a few pages and save you lot of time researching
     
  10. pixel

    pixel Well-Known Member

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    Insurance must be a tough business, especially for an upstart.
    I always found their TV ads annoying anough to press the "Mute" button...

    So I was quite surprised when ISU popped up as the only result in today's Trinity scan. In the absence of chart history to indicate the reliability (or otherwise) of support and momentum, I guess I'll give it a miss.

    ISU n 14-10-13.gif
     
  11. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    The meerkat guys are British. They have proven hard for iSelect to knock off.
     
  12. McLovin

    McLovin Well-Known Member

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    I'm not sure I'd call them upstarts, they've been around since 2000.:)

    The accounts are a bit of joke, tbh. They pretty much book revenue when someone visits their website.:eek7:
     
  13. DJG

    DJG Well-Known Member

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    Haha. That sums up my view perfectly!
     
  14. pixel

    pixel Well-Known Member

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  15. McLovin

    McLovin Well-Known Member

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    That's $1-$2m for the HY. $3-$4m for the full year. For a company that makes ~$25m EBITDA/year that's a fair whack. Very little detail on how exactly this will drive more customers to them either. Tbh, it looks more like they're spinning it as some sort of growth initiative because A&G have told them that's the new commission rates.
     
  16. skc

    skc Well-Known Member

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    My thoughts exactly.

    I have recently been shopping around for a home equity LOC as well as new electricity supplier, and I looked at iSelect in both instances. Here's my lay person's view of their business operation from the outside.

    1. Before showing the product comparisons, you need to provide your contact details. I did but I can see how this may turn a lot of people away. I wonder if there's a away to avoid leakage from that early part of the customer engagement.

    2. In both instances, someone called me back the next day to follow up. Both sales rep were courteous and knowledgeable. Although I also see that as quite an expensive servicing model.

    3. In the case of my LOC, they pretty clearly understood my needs and were able to offer something that's quite competitive. I haven't make a decision yet but the overall experience was positive.

    4. In the case of electricity, their offerings were the same as the supplier's website. And since there was some details that was unclear on the ISU website, I went directly to the supplier's website and signed up there. So while my experience wasn't negative, they offered no real advantage.

    5. It feels (although I can't verify) that their comparison list has a fairly large skew towards certain products/suppliers. While you can't blame them, anyone who consults more than a single source will see that and question if they are getting the best deal.

    So overall verdict: Good place to check out if you are a consumer, nothing to suggest massive competitive advantage if you are an investor.
     
  17. pixel

    pixel Well-Known Member

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    While the volume is still too small to really hang a hat on, today's candle suggests our concerns are shared by other investors/ traders. The double top may well play out way beyond the standard 200% level :1zhelp:

    ISU pm 10-02-14.gif

    Looks bad enough for me to stay away.
     
  18. McLovin

    McLovin Well-Known Member

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    And it looks as though they overstated their expected trail commissions...What a surprise.

    http://www.afr.com/p/business/companies/iselect_downgrades_guidance_again_2ZyjXLvP0dapGvrNIwrUhJ
     
  19. VSntchr

    VSntchr Well-Known Member

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