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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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NETeller

August 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • NLR
  • Price:
  • 433p
In the face of a weakening share price NETeller’s latest trading statement did not inspire confidence. Although it added another 600,000 customers to take its total to 2.9m in the half year ended 30 June, the rate of new daily sign-ups decreased markedly in its second quarter to 2,898 compared to 3,609 in Q1. Other bugbears were the reduction in gross margin due to higher bad debts and higher cost pressures from its Calgary operations. As a result, broker Investec has trimmed this year’s forecasts by 10% to US$142m, leaving earnings at 109 cents (59.2p). Although the PE now looks cheap, the broker hinted there could be more downgrades to come if these cost pressures persist. The tanking share price tells its own story albeit ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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