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Thursday, July 05, 2007

Ross Human Directions Limited - BUY

Hi everyone,

My next purchase since JUM has been Ross Human Directions Limited (ASX:RHD).

The reasons I bought this stock include :

Technical bowl poattern forming in chart.
PE ratio is at 8.6
PB ration is under 1.5
PEG ratio is 0.5
Dividend Yeild is 7% fully franked
PS ratio is 0.16 ( Price to Sales )
EPS are forcast to grow by more than 10% for the next few years
The price is under $1.00
Debt levels are at maageable levels (29%)

Also they have had record profits recently.

I got into this share at 62c but I would suggest it is still a good buy up to 65c.

Of course this is just what I did and is not a recommendation that you buy the share as I do not know your financial position :) ...

Good Luck.

4 comments:

StockDoc said...

Interesting analysis. I wonder if you might also be interested in Peoplebank (PBA)? I mention PBA as it, like RHD, is in the recruitment/contractor space, although I would argue that PBA is a superior business. RHD's reliance on temp work leaves it more vulnerable to cyclical downturns in the market than PBA which derives 80% of its gross profit from contractors. This is lower margin than recruitment but historically has proved to be a more stable income stream. PBA is also more attractive than RHD as it is forecast to have a net cash balance sheet leaving it more flexibility to do acquisitions. Finally, PBA's Managing Director is also its major shareholder (with 40%) so management and shareholder interests are aligned. Admittedly this is also the case with RHD with Julia Ross holding 46% of RHD. PBA is on a FY08 PE of 8.5x and assuming a 70% payout ratio the yield is 8%. I calculate RHD’s FY08 yield to be closer to 10% (6/62) although I am using Macquarie Bank’s forecasts. As PBA is exposed to the high demand IT sector it’s growth is much greater than RHD and I would anticipate EPS growth of at least 30% in FY08.

StockDoc said...

Interesting analysis. I wonder if you might also be interested in Peoplebank (PBA)? I mention PBA as it, like RHD, is in the recruitment/contractor space, although I would argue that PBA is a superior business. RHD's reliance on temp work leaves it more vulnerable to cyclical downturns in the market than PBA which derives 80% of its gross profit from contractors. This is lower margin than recruitment but historically has proved to be a more stable income stream. PBA is also more attractive than RHD as it is forecast to have a net cash balance sheet leaving it more flexibility to do acquisitions. Finally, PBA's Managing Director is also its major shareholder (with 40%) so management and shareholder interests are aligned. Admittedly this is also the case with RHD with Julia Ross holding 46% of RHD. PBA is on a FY08 PE of 8.5x and assuming a 70% payout ratio the yield is 8%. I calculate RHD’s FY08 yield to be closer to 10% (6/62) although I am using Macquarie Bank’s forecasts. As PBA is exposed to the high demand IT sector its growth is much greater than RHD and I would anticipate EPS growth of at least 30% in FY08.

StockDoc said...

Interesting analysis. I wonder if you might also be interested in Peoplebank (PBA)? I mention PBA as it, like RHD, is in the recruitment/contractor space, although I would argue that PBA is a superior business. RHD's reliance on temp work leaves it more vulnerable to cyclical downturns in the market than PBA which derives 80% of its gross profit from contractors. This is lower margin than recruitment but historically has proved to be a more stable income stream. PBA is also more attractive than RHD as it is forecast to have a net cash balance sheet leaving it more flexibility to do acquisitions. Finally, PBA's Managing Director is also its major shareholder (with 40%) so management and shareholder interests are aligned. Admittedly this is also the case with RHD with Julia Ross holding 46% of RHD. PBA is on a FY08 PE of 8.5x and assuming a 70% payout ratio the yield is 8%. I calculate RHD’s FY08 yield to be closer to 10% (6/62) although I am using Macquarie Bank’s forecasts. As PBA is exposed to the high demand IT sector its growth is much greater than RHD and I would anticipate EPS growth of at least 30% in FY08.

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