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Cdf - a good question. I have been keeping an eye on Kape but have not studied it so would not invest until I do. Outwardly it looks ok and could well be a great investment albeit with a lower market liquidity it seems. What attracted me to DT was its fairly unique Technology, its management combining boffins, spooks and marketeers and it’s UK base. It ticks all the boxes for me for an exciting speculative investment that is nothing but interesting with all its twists and turns. Great potential but not for the faint hearted.

Yes Sheltie I do - and I appreciate you insights. Just sometimes good to debate and learn from others with different points of view.

But now another storm is on the horizon so battening down the hatches is in order as there is a red alert in my area.

Sheltie - Interesting view, but to me, if you believe in the vision and capability of a company you are interested in, I would have thought being a bull in a bear market is just the place to be. For a long term investor buying in a bull market and selling in a bear market doesn't make sense to me. But we all do what works for us so that is what is important.

Thanks Toff - I live and learn.

Tof - just to clarify - you say the MMs are a party to making the SP fall happen. If the majority of the trades - as far as I can ascertain - are “AT” trades through SETS, what is the role of MMs as I thought AT Trades can be conducted without any participation from them? Are you saying that the MMs are trading on their own account through SETs?

Kick - not only at the moment. In my experience Mr Market is not un-seldom nuttier than a fruitcake demonstrating behaviour that is nothing short of silly - either way. On the other hand, the question posed by Ndn71 earlier is also relevant. Has Mr Market seen something we haven’t? I keep asking myself this but, so far, I haven’t seen anything that disturbs me.

I believe in the long term prospects of DT and am not worried about the current SP as I have my allocation of shares and won’t be currently selling or buying. I am willing to bet on the future of DT and will back my own judgement against what I regard as “ other persons’ (Mr Markets’) mistakes of judgement”.

To quote B. Graham further: “Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage”. Basically he means, IMHO, we have the freedom to think for ourselves and choose whether or not to follow Mr Market.

I do not pay too much attention to brokers target prices as they are a mixture of what they consider the intrinsic value is ( the present value of future fee cash flows) and how Mr Market will assign a value to them. And Mr Market is invariably always too optimistic or too pessimistic overshooting on the upside and on the downside even with established high quality stocks (but herein lies the opportunity).

When it comes to intrinsic valuation, a number given without context, is, to my mind worthless. I would need to see all the main assumptions underlying that calculation to understand whether the figure they come up with would be credible (to me) or not. And it cannot be a prediction because of the inherent uncertainty - it, to me, can only be one possible outcome out of several scenarios.

Having said that, and if DT continues to progress as it has, I can imagine a future where the intrinsic value is in the range 800 - 1000p or even better (based on informed estimates/guesses) Whether this will eventuate or not we will have to see.in the coming years. I am betting it will for the time being. How Mr Market will react over that time frame though, I haven’t a clue.

Unhooked - my understanding is that the buyback was to allocate shares as part of an incentive scheme. The alternative would be to issue shares and dilute. DT has ample cash for the time being and cash or cash equivalent was USD34OMM end FY21. That will keep them (us) going for some time.

Pearls - I think the answer to your question can be found in chapter 8 of B Graham’s The Intelligent Investor. Although a little dated it says it all, and for any true investor ( See BJ’s definition of what he means by this) I would recommend reading it. Pearls of wisdom IMHO.

One more example - Studio Retail Group - seemingly profitable but having a negative FCF for some time and running out of cash. Several big named IIs have been caught with their pants down. So important, IMHO, to keep an eye on the “books”. DT, again IMHO, is still in good shape in this regard.

I agree with HKK - the fundamentals are good and getting better- growth accelerating, relative costs falling, and an an ok balance sheet. The SP is a distraction - or a “SALE - 45% OFF” opportunity - and great for long term investors wanting to de-risk their initial purchases if they are higher. Maintain you faith yea long term holders and be patient. Of course nothing is certain as DT’s value - net cash creation - - is all in the future so, as they say, DYOR.

Sonic74 – An excellent question.
My understanding is that almost all Revenues (99%+) are from recurring subscription contracts with customers that are about 3ys in duration. But there are Remaining Performance Obligations (RPOs) that represent a committed revenue backlog which is the sum of all committed customer contract ARR values that have not yet been recognized as revenues. These figures are quite substantial.

Anyway this is from notes I made some time ago so it needs another look at the prospectus to understand why these RPOs backlogs are not immediately incorporated into revenues. Having ARR>Revenue is ok IMO for future Revenues if the RPOs are indeed later added to revenues .

Others may have a different understanding or could add further insight.

Thanks SW 77 - I suppose there must be. Where is this info published? It would be interesting to know what the balance is between active and tracker funds. And for that matter, what % of the free float we PIs hold. But, I guess, this info is not readily available. I did read somewhere, though, that trackers hold about 50% of the S&P 500 shares.

Bob - ETF Manager Group and the CFP SDL Buffettology Fund. IIs are Institutional Investors who manager money on behalf of others to differentiate from private investors. The ETF GROUPS are trackers I think that follow indices - the Buffettology fund is actively managed investing in stocks that follow the principles of Warren Buffett which is of course a good recommendation. What would be nice, as others have pointed out, is if more active managers of funds buy into DT’s story.

According to Market Screener GO ETF Solutions now holds 2.35% of the shares (ca 16MM shares) in DT - up from ca1% when I last looked. We now have 3 “IIs” in the top ten holdings.

A quote from an Allianz TT interview.

Quote

What stock are you most excited about?

It's a little bit like asking me about which kid I like the most, nothing comes to mind. But there are a number of things we're excited about, and the king of ongoing relevancy is cybersecurity. It is just top of mind.

Unquote

Sheltie - both basic approaches use mathematics - it is only a tool so you cannot use it to legitimise any one way. One approach uses the past SPs to try and predict the future short term SPs . The other uses the present capabilities of a company, the demand for its products and macro-economic factors to form a vision for the future in order to predict the long term money making capabilities and hence a credible or otherwise future SP.

We all approach things differently and use what works best for us. I am firmly in the latter school of thinking.

Just for clarification are we talking about first half FY22 results in March because won’t the Q3 update be in mid-April? We already have an idea how the first half results will look following the Q2 update - the Q3 update to me will be the more revealing.

The share buy back mandate was only until 31/12/21. This will have to be renewed before any further share backs are allowed. See the RNS announcing them.