oakton on fire, page-5

ah, i remember watching this go down to 50 cents or so..

hartleys from 11 june

"
BUY

OKN said 2H10 sales and EBITDA would be similar to H1. This implies full-year EBITDA of $33m, around 6% below our estimate.

Business Impact: This does not reflect any significant issue, merely a somewhat slower recovery in IT market spend. Federal government spend is increasing slowly. The industry believes it will continue to increase after the election regardless of the outcome. Together the State and Federal segments make up roughly 35% of industry spend. IT spend is currently strongest in NSW and Queensland. We doubt we will ever reduce our risk assessment of OKN from High. Despite a consistent track-record, earnings are likely to display greater than average volatility, as a significant proportion of IT spend is discretionary and so sensitive to business sentiment, while the cost base is relatively fixed in the short-term. Staff shortages can constrain growth and inflate staff costs. Our valuation of $2.85 assumes DPS of 21c in FY11 growing at an average rate of 6.7% for 10 years, then at the inflation rate."