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Datatec DTC


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#1 Bullhunter

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Posted 16 May 2018 - 10:30 AM

Keith McLachlan's opinion:

 

http://smallcaps.co....tec-basic-math/

Keith's update:

 

http://smallcaps.co....grand-buy-back/


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#2 Goliath

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Posted 14 May 2018 - 10:50 AM

Keith McLachlan's opinion:

 

http://smallcaps.co....tec-basic-math/

 

Appreciated.. got some after the recent dip, couldn't resist :rolleyes:


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#3 Bullhunter

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Posted 10 April 2018 - 04:38 PM

So not really a buy at current R20-ish level? :rolleyes:

Keith McLachlan's opinion:

 

http://smallcaps.co....tec-basic-math/


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#4 Goliath

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Posted 05 April 2018 - 12:06 PM

Post special divi the company publishes the following sens announcement:

 

Shareholders are advised that the basis applicable in determining the cash payment for the
fractional entitlement is R28,94 (R32,16, discounted by 10%).

 

No wonder the share price is heading south of the Scrip Distribution alternative of R34.23 per Share.

 

One cannot beat bad management.

 

So not really a buy at current R20-ish level? :rolleyes:


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#5 Bullhunter

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Posted 12 January 2018 - 06:03 AM

Post special divi the company publishes the following sens announcement:

 

Shareholders are advised that the basis applicable in determining the cash payment for the
fractional entitlement is R28,94 (R32,16, discounted by 10%).

 

No wonder the share price is heading south of the Scrip Distribution alternative of R34.23 per Share.

 

One cannot beat bad management.


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#6 Bullhunter

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Posted 10 January 2018 - 10:38 PM

Thanks, Bullhunter. Very helpful, as always☺.

I did not buy DTC. Was whiplashed by ASPEN. Just too spooked at the moment to buy anything. Will revisit DTC investment case later on, when my nerves have calmed!

EOH and APN, which I hold, is just fraying my nerves! Add in the Steinhoff disaster (did not hold), and my confidence in the markets has been severely rattled!!

( It may be less riskier to put my money in a pyramid/ ponzi scheme! LoL)

I've been doing more selling than buying lately, trying to clean up my portfolio, getting rid of junk!

Going forward, I am going to be extremely selective in the stocks I add to my portfolio. Quality, quality only! (Hopefully!)

Companies are like the humans that manage them: Winners keep on winning, losers keep on losing. You can apply this principle to every aspect of life,including potential lovers!


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#7 Spree

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Posted 10 January 2018 - 04:18 PM

Thanks, Bullhunter. Very helpful, as always☺.

I did not buy DTC. Was whiplashed by ASPEN. Just too spooked at the moment to buy anything. Will revisit DTC investment case later on, when my nerves have calmed!

EOH and APN, which I hold, is just fraying my nerves! Add in the Steinhoff disaster (did not hold), and my confidence in the markets has been severely rattled!!

( It may be less riskier to put my money in a pyramid/ ponzi scheme! LoL)

I've been doing more selling than buying lately, trying to clean up my portfolio, getting rid of junk!

Going forward, I am going to be extremely selective in the stocks I add to my portfolio. Quality, quality only! (Hopefully!)
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#8 Bullhunter

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Posted 09 January 2018 - 06:20 PM

 

The short term investment case:

 

The company notified shareholders that the issue price applicable to the Scrip Distribution alternative is R34.23 per Share, which is the volume-weighted average traded price per Share on the JSE Ltd. ("JSE") over the 30 trading days up to and including Thursday, 21 December 2017, less the amount of the Cash Dividend (being R23.00 per Share).

 

So, the company is discounting the share by the full amount of the divi but one has to consider the effect of DWT of 20% if one selects the cash divi, resulting in a nett cash divi of R18.40.

 

The long term investment case:

 

On 1 September 2017, DTC received US$630 million for the sale of Westcon Americas and 10% of Westcon International with the potential for an earn-out of up to US$200 million in cash which will be finalised in April 2018. In addition DTC sold the non-core Logicalis SMC, Dutch business unit for US$42 million.
 
$350 million of the designated free cash is being distributed.The balance will be utilised to reduce the Group's residual interest bearing debt and working capital funding. 
 
 
The maximum consideration of $830 million equates to an equity valuation of the total Westcon-Comstor division of $1.1 billion. Once Westcon International is able to show sustainable profitability, Synnex will make an offer for the 90% of the business they don’t currently own. 
 
Datatec’s entire market capitalisation prior to the announcement of the sale was $850m (R11.97bn).
 
If you buy DTC shares you are getting three companies for free, plus the remaining debt. Datatec still owns IT services provider Logicalis, technology consultancy, Analysys Mason and the remaining 90% of Westcon for sale (worth $270  million based on the above valuation). It  believes it will receive a better price from Synnex once earnings in this business, which had been hurt by a recent SAP software implementation, recovers.
 
Further upside:
 
Westcon International currently retains the US$63 million annual central costs of Westcon-Comstor and has a transitional services agreement with SYNNEX, which will run until August 2018. Subsequently, Westcon International will be able to implement fully its plans to reduce the central costs and right-size the business. 
 
Logicalis has now become the strongest part of the Group in terms of profitability and cash generation and continues to provide the widest geographical exposure with its substantial Latin American and USA businesses. The Group intends to continue to develop and grow the Logicalis business. 
 
While the Logicalis's trading in H1 FY18 has been disappointing, the Board expects a much better performance from Logicalis in H2 FY18.  

 

The problem with DTC is that coverage of technology companies such as Datatec has dwindled after the delisting of Dimension Data in 2010. Liquidity in the sector is too low for stockbrokers to assign dedicated analysts to it. 


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#9 Bullhunter

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Posted 09 January 2018 - 06:09 PM

Special divi R23.00 LDT 09/01/18

Is this divi already fully priced into the current share price of R57.00?

Is there an opportunity here to make a quick profit, or will the share drop by the full R23.00 ex-divi?

Is this company a good medium to long term investment post sale of it's biggest profit generator?

Any thoughts?

The short term investment case:

 

The company notified shareholders that the issue price applicable to the Scrip Distribution alternative is R34.23 per Share, which is the volume-weighted average traded price per Share on the JSE Ltd. ("JSE") over the 30 trading days up to and including Thursday, 21 December 2017, less the amount of the Cash Dividend (being R23.00 per Share).

 

So, the company is discounting the share by the full amount of the divi but one has to consider the effect of DWT of 20% if one selects the cash divi, resulting in a nett cash divi of R18.40.

 

The long term investment case:

 

On 1 September 2017, DTC received US$630 million for the sale of Westcon Americas and 10% of Westcon International with the potential for an earn-out of up to US$200 million in cash which will be finalised in April 2018. In addition DTC sold the non-core Logicalis SMC, Dutch business unit for US$42 million.
 
$350 million of the designated free cash is being distributed.The balance will be utilised to reduce the Group's residual interest bearing debt and working capital funding. 
 
 
The maximum consideration of $830 million equates to an equity valuation of the total Westcon-Comstor division of $1.1 billion. Once Westcon International is able to show sustainable profitability, Synnex will make an offer for the 90% of the business they don’t currently own. 
 
Datatec’s entire market capitalisation prior to the announcement of the sale was $850m (R11.97bn).
 
If you buy DTC shares you are getting three companies for free, plus the remaining debt. Datatec still owns IT services provider Logicalis, technology consultancy, Analysys Mason and the remaining 90% of Westcon for sale (worth $270  million based on the above valuation). It  believes it will receive a better price from Synnex once earnings in this business, which had been hurt by a recent SAP software implementation, recovers.
 
Further upside:
 
Westcon International currently retains the US$63 million annual central costs of Westcon-Comstor and has a transitional services agreement with SYNNEX, which will run until August 2018. Subsequently, Westcon International will be able to implement fully its plans to reduce the central costs and right-size the business. 
 
Logicalis has now become the strongest part of the Group in terms of profitability and cash generation and continues to provide the widest geographical exposure with its substantial Latin American and USA businesses. The Group intends to continue to develop and grow the Logicalis business. 
 
While the Logicalis's trading in H1 FY18 has been disappointing, the Board expects a much better performance from Logicalis in H2 FY18.  

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#10 Spree

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Posted 08 January 2018 - 12:57 PM

Special divi R23.00 LDT 09/01/18

Is this divi already fully priced into the current share price of R57.00?

Is there an opportunity here to make a quick profit, or will the share drop by the full R23.00 ex-divi?

Is this company a good medium to long term investment post sale of it's biggest profit generator?

Any thoughts?
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#11 Bullhunter

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Posted 29 November 2017 - 02:44 PM

DTC to  pay a gross Cash Dividend  of R23.00 (approximately U$1.66 per share) per Share
 
On 1 September 2017, DTC received US$630 million for the sale of Westcon Americas and 10% of Westcon International with the potential for an earn-out of up to US$200 million in cash which will be finalised in April 2018. In addition DTC sold the non-core Logicalis SMC, Dutch business unit for US$42 million.
 
$350 million of the designated free cash is being distributed.The balance will be utilised to reduce the Group's residual interest bearing debt and working capital funding. 
 
The maximum consideration of $830 million equates to an equity valuation of the total Westcon-Comstor division of $1.1 billion. Once Westcon International is able to show sustainable profitability, Synnex will make an offer for the 90% of the business they don’t currently own. 
 
Datatec’s entire market capitalisation prior to the announcement of the sale was $850m (R11.97bn).
 
If you buy DTC shares you are getting three companies for free. DTC still owns IT services provider Logicalis, technology consultancy, Analysys Mason and the remaining 90% of Westcon for sale (worth $270  million based on the above valuation). It  believes it will receive a better price from Synnex once earnings in this business, which haS been hurt by a recent SAP software implementation, recovers.
 
Further upside:
 
Westcon International currently retains the US$63 million annual central costs of Westcon-Comstor and has a transitional services agreement with SYNNEX, which will run until August 2018. Subsequently, Westcon International will be able to implement fully its plans to reduce the central costs and right-size the business. 
 
Logicalis has now become the strongest part of the Group in terms of profitability and cash generation and continues to provide the widest geographical exposure with its substantial Latin American and USA businesses. The Group intends to continue to develop and grow the Logicalis business. 
 
While the Logicalis's trading in H1 FY18 has been disappointing, the Board expects a much better performance from Logicalis in H2 FY18.  

Edited by Bullhunter, 29 November 2017 - 02:45 PM.

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#12 SoleTrader

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Posted 28 June 2017 - 08:08 PM

Been accumulating DTC and shorting MrPrice against it. Good having a two alpha win for a change!
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#13 SoleTrader

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Posted 27 April 2017 - 10:50 AM

An interesting exercise in which the Westcon deal is struck at USD800m, less the debt in the business of ca. USD250m, and valuing Logicalis on an EV/EBITDA basis at a 20% discount to that of EOH and ADI, results in a share price of R75.  So if the deal happens, pile into this one because there will be a lot of upside.  I am holding those that i bought at R43, and took some more at R55.    


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#14 SoleTrader

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Posted 03 February 2017 - 07:03 PM

Does anyone know what the cautionary relates to? I bought a small amount of shares at 4300c a year ago
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