Pinned straw:
I usually don't watch the shorts that much, but am interested in this case due to the size of the shorts and their reaction to any new info.
i feel that as uncertainty reduces shorts will feel more vulnerable, they require more bad news, not stabilisation, even if that stabilisation is lower than expected.
i note the first release i can see is the short covering of 6m shares. of course, these guys can turn on a dime but they have to cover at some point.
we shall see
@Solvetheriddle I’ve been keeping a regular watch on the shorts for IEL. It’s interesting to note that on the 3rd June the number of short positions for IEL dropped 4.3% in one day, down to 12.8%. This was prior to the ASX market update. Shortman.com.au is always 4 days behind. It will be interesting to keep an eye on the chart over the coming weeks. The 5.65% lift in the share price on Friday (7 June) might be a sign of more short sellers covering positions?
The much-anticipated shoe dropped at IEL and a bit worse than i had expected. main points,
- To buy the stock must believe this is cyclical and ST/MT
- must believe that IEL maintains a leadership position in a healthy growing industry, so maintaining high PE that is synonymous with a growth biz
- are we out of the woods? not clear, fy25 still tough, some chance of another leg down, but this risk is reducing, imo
- happy they are moving on costs, historically this has surprised on the upside. i had feared the new mgt would baulk at this.
- US making progress, i thought this market was too tough. some positive mix effects coming.
- my new buy price is $13.60 assuming you are on board with the above
the below shows the over-earning with the huge student vols around 2023, and my assumptions on contraction and recovery. to give the above share price buy target 10%pa over the next 5 years.
i hold this but have plenty of room to increase it
Just had a read of the announcement as well. The bright spot is the increase in placements which are the much higher revenue side of the business. I'd suggest that maybe a way to look through this is that if you really want a place when there are restricted numbers (i.e. more competition for the place) then its going to be much more important to engage a high quality placement company to help you secure one. As IDP seems to note, potentially a tailwind for them which can offset some of the decline in total market for the next couple of years as they take market share from less reputable competitors.
I'm going to try to attend the call at 10am and will also be really interested to see how the market reacts. Further downward pressure on the share price may present an even better buying opportunity if you have the temperament to ride out a couple of tough upcoming years.
DISC: Held IRL and SM