Question 1: Share registry and super fund administrator Link (LNK) has taken a caning. Following an earnings downgrade, it dropped by more than a quarter. Is it a buy yet?
Answer: I’ve been a huge fan of Link and like many others, were caught totally unaware by the earnings downgrade. It seems like the old story of an Australian company buying a business in the UK. A massive SELL signal, because I struggle to think of a single Aussie company that has made its UK acquisition work. They blamed Brexit – and for sure, this is part of it – but it also looks like they may have caught a falling knife.
It wasn’t a huge earnings downgrade, but when you have marketed the business as being based on “recurring revenue” and extolled your acquisition skills and then disappoint, the market can be pretty harsh. History is also against Link in that the first earnings downgrade is rarely the last.