Technology & Telecommunications

Last week, I came across an interesting article on Yahoo! Finance that presents examples of where Warren Buffett has done well – and not so well – in the retail sector. It attributes Buffett’s Achilles’ heel to the way that “the Internet is rapidly reshaping shopping habits and affecting Berkshire-owned retailers in ways they didn’t expect”. continue…

by Scott Shuttleworth Posted in Consumer discretionary, Technology & Telecommunications.

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This is intriguing on so many levels. Game theory is being played out live over at REA Group’s realestate.com.au, and we are glued to our screens. Can a business with possession of several competitive advantages, including monopoly power, network effect and the most valuable competitive advantage – the ability to raise prices without a detrimental impact on unit sales volumes – lose its competitive advantage? continue…

by Roger Montgomery Posted in Property, Technology & Telecommunications.

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Amcom Telecommunications (ASX: AMM) has secured a contract with The University of Melbourne to provide its Unified Communication solutions to around 13,000 users. While the number of users is impressive, we believe that the deal will contribute modestly to earnings.

Unified Communications has the potential to be a key growth driver for Amcom as it provides a number of revenue streams such as handset sales, licensing fees and rental of data networks.

However, we understand that the University of Melbourne already has the devices that are compatible with Amcom’s unified solutions platform. What’s more, the University of Melbourne does not require a data network, as it is a member of AARNet – a high-speed fibre network that connects 38 Australian universities and the Australian CSIRO.

This means that Amcom is only receiving a fraction of the revenue it would otherwise receive from a new client.

The contract is certainly a step in the right direction for Amcom, as the more that Amcom can change professional behaviour towards unified communication, the more demand will ultimately flow to vendors over time. Amcom’s addressable market with AARNet is 200,000 users, so securing the first contract with The University of Melbourne will go some way in encouraging the other members to follow suit.

But if management is seeking to extract maximum value from its Unified Communications division, then it will need to acquire infrastructure in the eastern states. They certainly have the means to do so after raising $40 million of equity in June.

by Ben MacNevin Posted in Technology & Telecommunications.

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As already announced to the market, Aristocrat Leisure Limited (ASX: ALL) is preparing to undertake the biggest acquisition in its history, with an AU$1.494 billion all-cash takeover of US-based Video Game Technologies (VGT). continue…

by Russell Muldoon Posted in Companies, Technology & Telecommunications, Value.able.

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 Vocus worth $6.10?

On Tuesday, we reported on the exciting future for Vocus Communications (ASX: VOC) after their AU$107.7m acquisition of New Zealand’s largest ducted inter-city fibre optic network operator, FX Networks. continue…

by Russell Muldoon Posted in Companies, Insightful Insights, Takeovers, Technology & Telecommunications, Value.able.

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Vocus Communications (ASX: VOC) plans to acquire FX Networks Limited, New Zealand’s only ducted inter-city fibre optic network, for an enterprise value of NZ$116m (A$108m), or around 8 times EBITDA. This will be Vocus Communications’ sixth acquisition, and easily their largest, in the past four years. continue…

by David Buckland Posted in Insightful Insights, Takeovers, Technology & Telecommunications.

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NextDC (ASX: NXT), the developer and operator of data centres, is at an interesting cross roads. Having secured a national footprint, will the company continue to focus on expansion, or will it turn to demonstrating profitability? continue…

by Ben MacNevin Posted in Companies, Technology & Telecommunications.

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While the market does its best at trying to distract and dissuade, we ignore its bipolar short-term nature and treat near-run market fluctuations as random. Instead, we think about (and focus on) uncovering companies that can substantially grow their worth – which moves much more slowly – over the long term. continue…

by Scott Shuttleworth Posted in Technology & Telecommunications.

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In the last decade or so, Australian mobile phone services have risen from 8 million to 30.2 million. Internet penetration has risen from 30 per cent to 89 per cent of households. And, despite unique anti-syphoning legislation, which ensures free-to-air TV gets to broadcast the big sporting events; Pay TV has increased to 30 per cent household penetration (despite being stuck there since 2008), from virtually nothing in 1995. continue…

by Russell Muldoon Posted in Insightful Insights, Market Valuation, Technology & Telecommunications.

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Telecommunications supplier M2 Group (ASX: MTU) is a business we have previously owned in The Montgomery Fund, and it was a rewarding experience. MTU shares rose from around $3.50 when TMF was launched in August 2012, to over $6.00 in August 2013. We parted ways with MTU at that time, as the full-year results announcement showed that MTU’s debt-fuelled acquisition strategy had stretched its balance sheet beyond the limits we consider to be investment grade. continue…

by Tim Kelley Posted in Companies, Insightful Insights, Technology & Telecommunications.

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