Main numbers for 1Q11 Redecard results (growths 1Q11 x 1Q10):
Transactions with debit and credit cards: 30%
Revenue: <1%
Cost of Services and Operating Expenses: >40%
Earnings: -20%
So it's clear that competition increased when market was opened. And there are new players coming.
Considering that from now then on growth will equal margins drop, RDCD would have a P/E of 15.000 / (4 x 280) = 13.
Still a nice valuation, but I'm not sure if my premise is reasonable.
Wednesday, April 27, 2011
RDCD3 - Redecard
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9 comments:
What worries me more is the 6.7% increase in the cost of services from 4Q10 to the 1Q11.
Another problem is the drop in the ratio of prepayments from 25% to 20% in one year.
The mdr in the credit payments continued to drop in 1Q11.
The good news: increase in the mdr in debit payments compared with 4Q10.
I hope CIELO will show better results, with less increase in costs and with some growth in prepayments.
I think there's a strong sazonality in Redecard's earnings, the last quarter being the stronger.
Yeah, it's seasonal, but RDCD hadn't had a quarterly earnings below 300 mi since middle 2008.
I hope the adjustment comes to an end in 2011, with the earnings resuming growth in 2012 or earlier. The worst is the jump in the cost of services. I thought it would stabilize at 4Q10 level, so the 6.7% increase em 1Q11 was a negative surprise. I'll watch the earnings presentation to figure out the trends for the rest of the year.
RDCD3 is soaring more than 4% now. I think Mr.Market read other report that we didn't find. We read the gray paper, and I think he read the ink one.
I really can't understand what Mr. Market saw. Or if it even tried to saw anything...
It's unbelievable! I can see no reason to RDCD3 soar 6% after results announcements.
Now I can understand: it was just the Mr Market craziness. RDCD3 fell almost 5% one day after soar 6%.
I told the adjustment period would go until 4q2011!
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