Xero - accounting services (NZX:XRO)

I have not been watching blue chip stocks lately, though my suggested KDDI in Japan is doing well. I have come across a NZ stock which I think requires some attention. The NZSX is a relatively small exchange so good stories tend to slip past people. The stock is by no means a blue chip, but it could be. I note that the founders of MYOB haved taken a significant stake in the business. It is only capitalised at $123mil, but its quickly expanding globally, and it seems to be on top of its costs now, with still $23 million in cash.
The company has developed an online accounting solution for small-medium sized businesses (SMEs). I think its a great solution given the ease of taking your accounts on the road with you, the opportunity and desire to see your latest results on the go, and the ability to show people your latest financials. I also believe we will see in future corporate accounting become 'continuous' in the sense that you will have period reporting only for the purpose of comparison. We will not wait for quarterly results, we will want dynamic data for sales, etc. Maybe these will be processed straight away too, i.e. Straight thru processing. This is the future, but these guys seem to be well along this path. This is a big market, and I think this group will seize a part of it.
See their review and latest 6 monthly interim result.
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Andrew Sheldon www.sheldonthinks.com

KDDI about to reach previous low

KDDI is close to returning to its previous low, making it another great opportunity to pick up the stock at a very reasonable buy price. We recommended this stock last time it bottomed, and the current 'double bottom' offers another compelling opportunity to buy this stock. We expect a turnaround in earnings in years to come as they streamline costs. KDDI is the 2nd biggest cell phone seller and network operator in Japan after NTT Docomo.
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Andrew Sheldon www.sheldonthinks.com

KDDI doing well

Five weeks ago we suggested an investment in KDDI in Japan. This mobile phone operator is the 2nd biggest cellphone network provider in the country. Five weeks ago we recommended at Y442, its reached a high since then of Y525. The stock remains in a downtrend, though I believe it is going higher at some point. It may fall back to the Y419 support, though this stock is due for a breakout some time. It has already made a double bottom, for this reason I would be hanging on for bigger gains despite weakness in the broader equity market.
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Andrew Sheldon www.sheldonthinks.com

KDDI - Is this a turnaround story?

For investors who use the CFD platform of CMC Markets, you might be interested in this stock from Japan. KDDI is the 2nd largest mobile phone service provider in Japan. The company has been undergoing a slow restructuring. The company I believe has a lot of debt, thought I don't see it going broke. Rather I would not be surprised to see it perform a wonderous turn-around for two reasons:

1. Rationalisation of services - the company has acquired an agglomeration of brands and cell phone standards. Its task is to get customers onto a single standard. These brands include Tuka (which I used to use), AU and PHS.
2. Expanded sales - I would expect KDDI to benefit from cut backs in customer expenditure. I envisage that customers will shift to lower cost plans, i.e. pre-paid options, particularly students and single people.
3. Persistence of low interest rates should allow them to make in-roads
4. Investor (Vodafone? re-entry) or capital raising

Its competition is Docomo, which has always offered a premium & family service. I think Vodafone is the most likely company to enter the market. It has previously sold out of Japan, having sold to Softbank, but I would not be surprised to see it re-enter the market given its experience in Japan, and because of the large market share it will acquire. Anyway, I watch this stock with interest because their share price has sunk back to previous lows.
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Andrew Sheldon www.sheldonthinks.com

Aquarius Platinum - watch for new highs

Aquarius Platinum has been doing very well of late after having recommended them at $2.60 about 6-7 months ago. I would be taking a look as they test a previous resistance level. My concern is that they will fall back in the light of current SIV fears. I would wait for market direction on this issue. One must remember that this is a very volatile stock, so one needs to react quickly to any technical signal. Refer to the attached chart - you are looking for a break out to a new high, or a fall below the previous low. The outlook for platinum is very good - both because its a monetary asset and because of its application in fuel cells, but that is long term. In the short term, I believe they are expanding output and cutting costs.

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Andrew Sheldon www.sheldonthinks.com