Anyone holding this share? It looks very good on both fundamental aspect and technical charts.It will pay 2 cents dividend on 1st May 10. In my opinion, it's a great dividend stock to hold forever
I had a look at their financials on my lunch break. A breath of fresh air that they focus on cash profits. Their cash flow looks pretty steady. They are able to pay down debt and a relatively high dividend payout ratio from their FCF.
It seems that most of their revenue declines have been due to the drop-off in "consulting work." Clients are holding back on projects (and therefore advice on them). Consulting work is the cream for these firms. I have heard people senior to me commenting that the current economic environment is as bad as it has been for many years in respect of clients delaying payment of invoices (and bringing their work in) and being extremely fee conscious. This will show up in the margins when it improves. Compliance is the nuts and bolts and is low margin. You can see the decline in operating margins since 2008. They service high networth individuals and bigger business clients as priority. So in this sense they are a smaller fish in the big waters dominated by the Big 4. Possibly why their return on equity / ROIC has never been much higher than the cost of capital.
I will also note that many mid-sized practices (including regional and suburban) have seen a culture change towards the "value proposition" (which is accounting speak for trying to get more consulting work). They never used to chase it as hard, but firms are getting smarter with their marketing and image to accomodate this. The industry has changed a bit in this respect. It used to be more confined to the bigger firms.
All that said, I like accounting businesses. Mainly because the clients are generally pretty sticky. I also believe that they are sheltered somewhat from shock earnings events, their demise is generally a slow affair. You can pick it up early because it is usually due to poor cash flow management (keep an eye on tardy receiveables, increasing working capital requirements and the employee remuneration compared to revenue).
In a sense compliance work is a recurring revenue stream, since the same thing is done for the same clients (in most cases) year in year out. The main problem with compliance work is that clients do not see the value. As you previously stated yourself with your own affairs.
I probably prefer CUP in this sector because the practices that they own, whilst profitable, seem to focus on those clients who the Big 4 (and other bigger firms) don't chase. They're both priced pretty similarly on basic metrics and neither are absolute bargains, but perhaps slightly on the cheap side.
I don't think they have purchased anything major for quite a while now. They seem to have merged a couple of their smaller firms to create efficiencies in the mean time. I think they have just under 20 practices under their banner now.But from what you say it sounds as if WHK has (very sensibly) stopped buying up small accountring firms around the country and is focusing on the basics of paying down debt and running a tight ship. (That's just my take-away message from your post - is that the way you see it?)
Trading Halt. Earnings update.
This could make or break my investment.
I've never seen a trading halt request like this...
"... the trading halt is being requested pending a possible earnings update;"
Possible?
You either have an update or you don't.
Under what circumstance would you have a possible earnings update?
May be they are mucking around with SFG...
Probably semantics but I read that as possible earnings update,
rather than possible earnings update.
Im sure the market rewards those companies that toy with announcements and such.
Whats next? Possible windup? Possible takeover talks? Possible employee fraud?
Probably semantics but I read that as possible earnings update,
rather than possible earnings update.
Im sure the market rewards those companies that toy with announcements and such.
Whats next? Possible windup? Possible takeover talks? Possible employee fraud?
Recently this stock has experienced a lot of gains. I don't understand why as its fundamentals don't seem that hot.
I'm invested in this stock, and I'm going to pick up quite a bit more on Monday because I think that it's going to grow a lot.
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