Louis077 Oct 2011 14:28
Fair enough, my views are based on the fundamental analysis first, then trending and then technical (ill not go into the last two as it depends on your own views on this). Net Asset values are at 192.8m but that is not to mention the 107.1m tied up in goodwill which I always take into account.Goodwill and intangible assets are always hard to value and are quite murky waters.That amount of Goodwill should always raise eyebrows compared to the rest of the assets MTC has. P/E is at 23.14 and P/TVB value is at 4.34, both are expensive still if you are looking for undervalued stocks. The ROA and ROE 5 year average has decreased significantly this year. ROA 5 year average is 4.47 to this year of 1.59, whilst ROE 5 year 4847 to 3.41. Now not only are the margins ice thin, they have actually decreased as the years go by. Net income, Cash flow, cash holding and EPS have all decreased year on year. Now it doesn't matter if overall revenue increases if net income decreases, you are seeing only what you want to see. The chief executive selling 2.2m shares at the start of September at the price of 342 does not inspire confidence, nor the fact that he compensates himself over 5m per annum, which is a ludicrous amount given that he has not improved anything about MTC and it is significantly more when compared to companies twice the size of MTC. Where do you see the improvement coming in 2012? if you think just that people are gonna buy MTC just because people have more children then you obviously haven't done your research, MTC is falling fast behind the times against online (and better valued) competition. In harder times, people look for the better deals, and MTC does not offer that. Just go into their stores and have a look at the prices and compare online to the most popular baby products. They are over exposed in the bricks and mortars side of things. A bad Christmas (very much on the cards given the Macro factors) and this will plummet and you will not see the price you bought at for a very long time I fear, unless the management do a massive turnaround, change strategy which quite frankly is not happening. I am very bearish on this and your threats of Libel laws have kinda annoyed me even if it is to homeandtravel and not me. Be flexible in your thoughts and if you are wrong, you are wrong,move on . Cut your losses. DYOR first, accept if you have lost money and dont get attached to a share you bought. I find that the first cut is the best cut. Only way to make money on MTC is to short this, and I wish I had (which I said previously) at 425. Would have made a bomb. the fact you have said "nothing has changed" is a rather myopic view of things. Things have changed and for the worst. My advice: sell what you have at a loss and move onto another opportunity or short this. Only positive thing about MTC is overseas growth, but I wouldnt exactly grasping onto this with both hands. Competitors are doing the same as well
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