Ive been buying alot in these guys and there starting to reward me. I have this uncanny ability to buy shares in them EVERYTIME before they release some more positive news like say there've been AWARDED ANOTHER iron ore project for instance. Also i see a extention on another GOLDen opportunity. Declaration: I have bought some more
Maca. Mining And Civil Australia. Set up by ex Cooks mining guys. They undercut alot of tenders and run jobs on smaller margins which can be very tricky if things go wrong for instance there new contract at Kimberly diamonds. Very hard place to mine and alot can go wrong and apparently are. I'm not as savy following other company's costs and budgets etc but NRW are a good company but have a fair investment in iron ore projects structured around Rio Tinto and iron ore. It is expected to slow but how it effects its contract miners will be unknown because even if the price of iron ore falls it is so over priced to start with and it will effect profits of the big miners but shouldn't flow through as badly to these contracting companies unless it's expansion and construction company's the iron ore prices are so marked up as it is so there will still be profits just not as large.
Yes. Can agree with some above comments in 'buying jobs' and undercutting. Only to get on site find that the contract allowances do not cover the necessary expenses. I believe the civil side does ok, and they have a couple of solid mining projects. Mainly orebody 18 in the west. Just my personal opinion having worked for them and knowing their systems, but I think they have some issues, without being too specific, some cashflow problems and paying suppliers and actually getting equipment and critical parts was an issue. Macmahon is a fairly decent sized company and they have a lot of other projects and work sites. I didn't buy shares in a company once that I worked at due to their local issues, even though they were very good elsewhere.
Realease news... On target for a record profit Up to 82c (new high) They have pulled out of some new tenders because of lack of equipment. MACA. (Mining and Civil Australia) turning to sh*t big time at Kimberly diamond mine.
Interesting call - and I seem to remember you've made a good one or two. The chart of MAH is looking shite imo. Montgomery's Skaffold valuation for MAH is: Financial Year 2012: $0.69, rising to FY13 $0.85 Skaffold currently rates MAH as a B grade company for quality and gives it a 3 for performance (where A1 is highest rating) But if there's some new mega contract in the offing that an analyst can't factor in to future earnings yet - it's not in the valuation Maca Ltd (MLD) is valued at $2.68 - about its current price, and rated currently as A1, the highest. Its earnings growth is figured to be low in FY13 and FY14
Thanks Finicky The problem that I've had with MAH is that good news in the past has made little to no effect on it's share price but if they were to win a mega contract? Let's say there biggest one yet than I'm in hope that people will see confidence in there current price? Tell me Finicky what do you see as a buy price and what of any move up in price do you see if they were awarded a long term large contract? Thankyou
Mate they could easily get the kick in the share-price from the news you anticipate, but how much, and for how long, your guess is quite as good as mine and possibly better. Traders and managements love a story, I do too. Short term the market reacts to news as traders talk up and stimulate the price by one means or another, then reality and profit taking sets in, the short term traders are out, and the company share price once again drifts to reflect its sustainable earnings. As to buy price I have come to sort of slavishly follow the Montgomery (Skaffold) method because I've experienced the folly of other ways. I have no independent opinion of MAH, but if Skaffold is rating MAH as B3 it is already off my serious watchlist, because there are quite a lot of A1, A2, B1, B2 stocks on the ASX; and if Skaffold is valuing MAH at .69 in FY12 and .85 in FY13 it's not at enough discount to tempt me unless it were a higher rated company. Your on the ground insights are well worthwhile if you know when to get in and make sure you get out as the rumour or the actual news stales. I found your comment about MLD interesting too because it is a company I've considered to buy
A question for the gurus? If they won a billion dollar contract were would the share price be valued?
Over how long a period? If you knew they had a billion dollar contract over say 5 years you could have a shot at what that could mean to their bottom line per year by using MAH's average or predicted operating margin (last year this was only 6%, but a more usual historical margin looks to be almost 10%). From that you make a rough calc of the NPAT contribution of the new contract and divide that by number of shares on issue - about 734m. I've never done this with a stock by the way. But even after that you would have to predict sentiment and the reception of the news. The market might not fully account it because of general markets conditions or other MAH specific considerations that makes it leery of the stock. Or it may over-estimate the impact and bid like it's just the best news ever.
ok let's give it a whirl. So that's $1B you say over 10 years, and let's suppose that amount is evenly distributed over the 10 years, which it quite probably won't be - maybe milestone payments or something; but let's say an extra $100m revenue per annum, at a generously allowed 10% operating margin = $10m extra EBITDA. Not at the bottom line yet Let's take off 5% for depreciation (same % as last year) : $10m - $0.5m = $9.5m Assume no additional interest or amortization charge Tax at say 28% (same as last year): 9.5m - $2.7m = $6.8m Divide by 734m shares: $6,800,000 / 734,000,000 = an extra 0.93c per share earnings per year (rounded off) - lol MAH trading at current P/E of ~13, means addition to price 'should be' 13 x $0.0093 = 12c/share That's just my shot, and that begs all the other motives in the market general and specific to MAH. If say the market doesn't think much of MAH lately it will put a discount on some new success like a $1B contract I would say. And the announcement might come during a general market downturn.
Thanks but it's amateur hour believe me. It's going to be fascinating to see if the rumour bears fruit. You would have noticed all the trouble Leightons have got into lately? So that's a construction company that won prestigious contracts but grossly under tendered to get them it has turned out. That might cast some doubt over other contracts wins in a skittish market?
Ok, if you're still holding, review your reason(s) for holding and make a conscious decision whether to go on holding or sell. For instance, if the only reason you are holding MacMahon has been the prospect of the new contract and that is now not on, then you have no reason to be holding the stock - it's just inertia. But you might have other reasons - only you can decide. Not too keen on the chart of MAH if it breaks 75c with volume - just my view of it. I made a purely chart based decision to buy some Linc Energy (LNC) when it broke through resistance at $3 in May '11. It was a false break probably manipulated by bots, and when it fell back below $3 again I held on - in complete contradiction of my reason for buying at that price. The stock fell to $1, and by that time I'd lost $20,000 on the parcel. Instead I should have admitted I was wrong and taken the small loss at a bit under $3 - because my reason for holding it had evaporated. Got other examples like that.
Hi finicky I'm out of mah now and bought into mtu at 2.990 after reading your post Keep posting some of your picks mate.
