Noicewon11
a week ago

@CanadianAussie.

 

I agree with your thoughts on the QFE results. They aren't overly impressive but they do fit the narrative that the underlying business is achieveing what they are setting out to do. - Definitely not warranting of a 10% dump in share price. 

But then again, to me it seems completely pointless in trying to figure out what share prices do in the short term, because the market is often lazy and I believe overly so in QuickFee's case.

As anyone that has investigated the company in any detail knows, QFE effectively works as a working capital funding service for professional service firms.

Given the recent impact of COVID and the government stimulus measures pumping sh*tloads of money into small businesses & the economy, it can't be surprising in the slightest that the loan book in Aus has been knocked back. (given that the stimulus eventually slows down to zero).

To further break it down; Extra money in the economy = extra working capital for professional service firms = less need to QFE's services = less revenue & demand for QFE.

 

I really appreciate your commentary on the notes provided in the straw, particualrly the comment "I couldn’t find an explanation on this but if it’s a 1-off this further improves the bottom line."

In my financial models I usually look to adjust for these 1 off differences, particularly with forex impacts so its nice to see someone else doing something similar.

 

Overall, I tend to think the market misunderstands QFE and my views are further seasoned when I see the shares dumped on the back of a fairly positive result.

 

*I don't QFE shares but I watch closely

 

 

 

 

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