There does appear to be synergies from merging DVA and OVH but does that mean I'm comfortable exchanging my DVA shares for OVH?
OVH management haven't exactly set the world on fire. The share price run hard in late 2015 as the sector got excited after IFL's bid for HUB. Looking at OVH specifically, still EBITDA negative and no forecast of when they might be profitable. They consistently fail to meet consensus.
For FY15 cash receipts were $25m, OCF -0.869m. For FY16, cash receipts $26m, OCF -0.945m despite there being 15% more shares on issue. This is for a stock that has a market cap of $140m.
I'd be wary of claims DVA will make OVH a great investment. It might plug some holes but OVH management will need to start converting some revenue into profit.
Re AVX, I generally only buy when profitability is no more than 12-18 months away
DVA Price at posting:
82.5¢ Sentiment: None Disclosure: Held
