Imdex Ltd (IMD)

[finicky]

finicky said:
2012-08-30

Was tempted also by Imdex (IMD), down 15% today, still cum div, Skaffold says A1 and 46% undervalued by market before today's drop.
Drilling fluids and down hole instrumentation.

http://forums.silverstackers.com/message-397041.html#p397041

Picked up some Imdex (IMD) on Friday Sept 21 @ 1.70 and 1.685

When I pointed it out on Aug 30 @ 1.35 I expected more down because it had gapped down and broken though a solid level of support with volume on the one day. I did not pick the candlestick low 'signal' 5 days later, Sept 6, and then foolishly waited on a pullback despite it being obvious that a low was in. Should have accepted I'd missed the low and done an initial buy. The price hikes went on virtually relentlessly for 12 days in all, until I could stand it no longer and bought at more than 30% premium to where I could have realistically made an earlier buy. There's a big chance it will soon do a retrace.

The behaviour of it is mystifying. This company reported a record NPAT of $45.8 million up 58% cf FY11 and the stock suffered a decline of around 37% over the ensuing 3 weeks. EPS up 53%. A nice upcoming dividend on the hook. The earnings look like quality too, not made to look better than they are, and with plausible prospect of continued growth.

Their mobile Solids Removal Unit (SRU) equipment looks promising. It extracts the damaging solids from used drilling fluids on the spot at the drilling location. This allows for rapid recycling and obviates the need for sump pools that apparently foul up drilling sites. Just my lay take, a photo does it better, see page 10 of this preso:
http://stocknessmonster.com/news-item?S=IMD&E=ASX&N=590971

Another thing I like was that this stock has been dumped during the mining services panic, but has only smallish exposure to iron ore in its mineral division, while 49% revenue in that div comes from the gold miners - think Gold, lol. Then there is the expanding Oil/Gas division that seems to have potential to expand in Americas - think shale oil/gas horizontal drilling.

Then they've got these ace little research and development labs in Germany and Perth (Imdex Technology) looking for competitive edge innovations. So to sum up, it's the whole vibe of the thing.

 

[wrcmad]

I've got a good mate who works for this company. I can tell you that the growth prospects are not only plausible.... they are happening.

 

[finicky]

So are you in it wrcmad? Seems to be expanding its market geographically, as well as by sector (O&G), and new product offerings. I like that I am buying into a technology company as well as a mining/exploration services and equipment provider. Came up with the goods in FY12 anyway.

By the way, the Roger Montgomery robot, Skaffold, appraises this as A1 for recent quality and performance, and 41% undervalued against FY13 numbers. That's with 14 analysts covering for FY13 and consensus 24c eps - big variation though: highest forecast 27 cps, lowest 17 cps.

Don't know what the Rog Montgomery fund thinks; there is often a big discrepancy there to Skaffold. The Skaffold robot recommends one thing the Montgomery fund is doing another. Also Montgomery is discouraging in public comments about Mining Services sector.

 

[wrcmad]

So are you in it wrcmad?

Yes.

Seems to be expanding its market geographically, as well as by sector (O&G), and new product offerings.

Yes again.

I was compelled to buy a while back based on the growth info I get every-so-often over a beer. They have some new projects/contracts in the pipeline O/S that sound very promisong.

 

[finicky]

In for a penny in for a pound. Added some more Imdex (IMD) yesterday and today @ 1.43, 1.45

I'll never learn. Sometimes it's best to accept your limitations and just try to be aware of them and not let them totally wreck you. I did indeed buy at a peak initially, and the stock has since deflated about 17% from my buy-in price. Buy-in was about 1.70, and has touched a low of 1.40 since. Imdex is now ex dividend.

Chart-wise, I've added now because it is showing signs of hesitation here, and has retraced about 57% of its relentless rise in September. Also you could read it as a possibly completed abc retracement. The alternative idea, less likely to me, is that it is just filling a gap, and will continue down to stronger support.

In response to reading comment elsewhere I looked a bit more closely at the annual result and it appears that the small Oil/Gas division showed a loss FY12 within the context of a a record result across the whole company. The loss in the Oil/Gas business is what might have put some in the market off. The bigger factor of course would have been the comments from Boart Longyear (BLY), the prices of iron and coal, and the slump across the whole mining services sector.

In Imdex the Minerals division is much larger than Oil/Gas and I'm punting that the management will prove effective in growing Oil/Gas and making good on their investment there. Oil/Gas is just a young operation and has an interesting prospect with the Solids Removal Units technology. Just my lax amateur take. There's no way I would be getting into this if I weren't being reinforced by Skaffold's valuation.

 

[finicky]

Still accumulating this. Yesterday two buys @ 1.44 and 1.435

Still a punt as to whether a significant low has been formed. Can't be sure the gap isn't just being filled prior to more down.

I also think a bot is at work. Maybe accumulating but possibly stealthily distributing. I put my buys at the top of the bid queue, but there were no corresponding offers at that price. In the split minute it took to go from the buy button to opening my position page the bid had already been filled both times. I believe bots work the market up and down - both ways - when accumulating or dumping. So yet to know which way the bot is ultimately working. Does it want more or does it want less?

 

[finicky]

Still buying today. Still punting that the bot is accumulating not dumping.

Noticed that two 'boutique' funds were forced to make their new substantial shareholder disclosures in September. That is - their share buying brought their positions to over 5% of the company's register

Sept 3
Celeste Funds Management
Buying it's way to a substantial position from 15/05/12 to 30/08/12
Samples of buying prices of its big parcels over 3 mths of buying:
1.98
1.94
1.46
1.31

Sept 14
Northcape Capital
Bought at average 1.76

 

[finicky]

Looks ok. Fair chance of a trot now. I wanted another shot at 1.40

Imdex (IMD) is going into The Cloud!


18 October 2012
ASX Announcement

Imdex Limited (ASX: IMD) is pleased to announce the acquisition of ioGlobal.
ioGlobal provides innovative cloud-based data management solutions for the mining, mineral exploration and oil and gas industries.


http://stocknessmonster.com/news-item?S=IMD&E=ASX&N=608759

 

[finicky]

The editor of FN Arena and top commentator Rudi Filapek-Vandyck singled out Imdex (IMD) during the BRR media roundtable on Friday. He says this stock has a lot further to go down. Also in his Tweets he says GS (I assume Goldman Sachs) has just put a sell on it. Gulp. Just putting some balance into the thread before the market opens on a crap day. Will possibly add more comment later in an edit to this post. Looking closer at the September Qtrly released recently, the EBITA margin is down significantly on the corresponding Q1 in FY12, while the revenue is up slightly.

Edit:
Here's a Newspaper Report bearing on the Q1 result, institution heavy register of IMD, the share price, and the ioGlobal acquisition.

Imdex managing director Bernie Ridgeway has accused institutional investors of misunderstanding his company and being too hasty in dumping its stock.

The drilling products provider's shares are worth about half of what they were six months ago after nervous investors jumped ship at the prospect of mining and exploration cutbacks.

Mr Ridgeway yesterday said institutions - who dominate the company's share register - were too impatient with Imdex's growth strategies dragging on profit margins. "We have a mismatch between our shareholder base and where the company's going," he said. "They're very short-term focused whereas we're building a business for the medium to long term.

"Sometimes the institutional market here in Australia gets a little disenchanted with that and really would like to and really would like us to maximise margins in the short term."

Mr Ridgeway made the comments after telling shareholders at Imdex's annual meeting that institutions had put the company in the "mining services bucket" with earthmovers and drilling contractors.

"They're people intensive, they're capital intensive and we're in fact the opposite," he said. "We have some of the best technologies in the world and I believe that we don't get rewarded for that."

Imdex's shares closed up 10 per cent yesterday after first-quarter figures showed revenue from its oil and gas division had doubled from a year earlier. Mr Ridgeway said the growing business had broken even in the quarter after losing about $5 million last year.

"The jury's out in terms of our ability to grow our business in the oil and gas sector," Mr Ridgeway said. "We performed poorly throughout FY12 but we were making investments in that sector for which we are now starting to get the benefit in FY13."

While group revenue was up 2 per cent, earnings before interest, tax and amortisation were down 19 per cent because of a drop-off in miners' drilling activity.

"What we think is happening is we're in a cyclical slowdown. We're not seeing a drop-off like we saw in the GFC. There's still work out there, there's still the ability for us to grow our business."

That included further bolt-on acquisitions such as its $8 million takeover of Perth-based mining data manager ioGlobal announced yesterday.

Imdex will pay geologist founders Stephen Winter and Dave Lawie $4.8 million in cash and $3.2 million in shares for the 12-year-old business. Both will stay on as managers.

"We formed ioGlobal to solve the data management issues of the resources sector," Mr Winter said. "The deal with Imdex is a great opportunity for us to take what we've developed to a larger market. We can really scale up now."

http://au.news.yahoo.com/thewest/business/a/-/wa/15159885/imdex-boss-takes-swipe-at-investors/

 

[finicky]

Geez this has been a disaster, lol. I kept adding and it kept going. Down that is. Down $31k in fact when it hit 1.105
Why me? I .. I don't understand.

 

[finicky]

Back To Black. What a racket is the ASX.

Broker gets an order from some fund, 'sophisticated investor' or institution to accumulate a quality illiquid small cap stock. The broker sets its machines and 'algorithms' to work. Brokers server is on the floor of the ASX right next to ASX's server - nanoseconds of advantage, can read incoming orders. Makes high frequency tiny orders or big orders - up or down, whatever progresses the mission. The computerised trading drives the illiquid stock down to a level where broker feeds at leisure, filling its abdomen with the blood of the retail investors who have been indoctrinated into a rigid stop-loss policy, and 'never buy in a downtrend'. Something like that anyway. When it is replete with plunder it releases its prey which then springs back to life. Have to hold through thousands of dollars of paper loss or otherwise get shaken out. Would have happened to me in Codan (CDA), M2 Telecom (MTU) in just recent times if I had a stop-loss.

 

[finicky]

BlackRock Group

Now this would have to be the giant prick operating the algorithmic trading machine?

19/12/2012 - BlackRock Group announces to the ASX that it ceased being a substantial shareholder
21/12/2012 - BlackRock Group announces to the ASX that it became a substantial shareholder

The share price dropped +30% on Aug shareholder letter containing comment that the small and nascent oil/gas division operated at a loss, mineral division facing headwinds, streaked all the way back on no particular news

Falls +30% again when Qtrly update did little more than confirm guidance in the August newsletter, streaked all the way back on no particular news.

'Use a stop-loss', as they advise, and sell your shares at a loss to gorillas like this:

BlackRock, Inc. (NYSE: BLK) is an American multinational investment management corporation and the world's largest asset manager. Headquartered in New York City, BlackRock is a leading provider of investment, advisory, and risk management solutions[citation needed]. The company acquired Barclays Global Investors in December 2009, solidifying its position as the largest investment manager in the world. As of September 30, 2012, BlackRock has $3.67 trillion in assets under management. Street Authority reported that, "If the company were a country, then its assets under management would put it at the fourth largest in terms of gross domestic product, higher than Germany or France."
BlackRock has become a power financial vehicle while remaining somewhat out of the public eye. According to Ralph Schlosstein, CEO of Evercore Partners, a NY-based investment bank: "BlackRock today is one of, if not the, most influential financial institutions in the world"
http://en.wikipedia.org/wiki/BlackRock

 

[finicky]

Dumped my earliest buys on Friday. They were bought for about 1.70 and sold for 1.70.

Chartwise the reasons were: approaching a previous significant high, volume low, momentum level overbought, candles are short ranging spinning tops (indecisive after a trend)

Brings me back to a correct weight position, but this is one I would go to overweight again if price pulls back enough.

This seems a possible mid cap stock to use as an energy 'play'

http://detcrc.com.au/2012/imdex-adds-next-generation-drilling-horsepower-to-det-crc/

 

[finicky]

Getting shaken again by hedge fund marauder Blackrock?

I bid for more at the low of 1.225 today from 2 o'clock (QLD) but the price rebounded just as I was bidding. No published news to account for the descent.

Down $31K, up $23k, now down about $8k again. What a prick of a stock. It's not impossible that the low of 1.10 will be broken in time, but I still doubt it. Not 'are your McLeans showing?' confident though.

Someone thinks it's ok - Perpetual Ltd (PPT), change of substantial holder notice on 18th, 5% of register to 6%

 

[finicky]

Adding twice today @ 1.21

I'm finding the chart hard to read but surely there's got to be a bounce due soon? Previous two reversals have been sharp. Decline looking mature in both time and size, momentum indicators down to prior lows, but candles are signalling nothing.

The less likely scenario I think is that the prior bounces off ~1.10 level are just intermediate and this decline is heading down to support to be found somewhere 50c - $1.00

Interesting to me is that Perpetual (PPT) has added twice more since my last post and now owns 8% of register. I take even more reassurance from Celleste boutique fund increasing their substantial holding to 8% (announced Mar 28)
http://celestefunds.com.au/investment-philosophy.aspx

I'm not trying to coax anyone into this stock so dyor. There are plenty who advise never to buy into a downtrend and never to average down.

[imgz=http://forums.silverstackers.com/uploads/1893_imd_apr_2_2013.gif]

[/imgz]

 

[finicky]

This would have to be a good trader's stock. It's like it's programmed - that's probably because it is programmed by BlackRock.
Also Perpetual (PPT) again increased its substantial holding from 8% to 9%

[imgz=http://forums.silverstackers.com/uploads/1893_imd_apr_4.gif]

[/imgz]

 

[Noppy]

Good gains yesterday for the first time since I have bought which puts me back level with this stock. Hope it doesn't all get wiped away today.

 

[finicky]

Couldn't behave any better so far. A down day was likely after that emphatic rise on Friday and the retrace was only around 30%. Now, so far today, an indecisive candle. All good so far, and I'd guess really on the way if gets a close over 1.30

[imgz=http://forums.silverstackers.com/uploads/1893_imdex_1_mth_tue_apr_9.gif]

[/imgz]

 

[finicky]

I added more of these @ 1.12 and 1.03. Will now only add if it falls to what I see as next support @ 0.75
That'll put me another $17k or so in the red if that happens (75c from yesterday's close)

Fantastic rally so far today, but that previous promising rally fizzled into a mere bounce and continuation of downtrend. All the undesirables are hot today anyway. So feeling wary and weary.
volume's not convincing yet at all. Wish I knew what the company does, lol

[imgz=http://forums.silverstackers.com/uploads/1893_imd_apr19.gif]

[/imgz]

 

[finicky]

3Q13 report out. Imdex responds by trading at a dollar. For the group (Minerals Div + Oil/Gas Div) Q3 worse than Q2, but revenue for still developing Oil/Gas division up, and now trading at break even

Group revenue for 9 months to 31 Mar down 7.5% compared previous corresponding calendar period
But unaudited EBITA down a massive 64% for Q3 alone which brings EBITA for the 9 months so far down 41%
I have assumed a similar result for Q4 which would bring the EBITA for full year FY13 down 47% compared to FY12
Assume a similar hit to full year FY13 NPAT of 47% cf FY12, assume eps same
eps in FY12 was 22 cps
So expect an eps = 53% of FY12 (100% - 47%)
22 x .53 = 11.6 (~11c)
Assume a dollar share price:
Forward P/E = 100/11 = 9
Assume div less than FY12 but same as FY11 = 5c = yield of 5% ff

Not bad if you believe growth has been built in with investment into Oil/Gas division, acquisition of ioGlobal data solutions, and new product innovations like Solids Removal Units (SRUs) and new smart drill heads. Not good if Oil/Gas div doesn't accelerate as expected and demand for minerals drilling services continues to contract.

I am not counting now on a dollar as the low for the SP. Next stop 75c if this zone of support cracks from the repeat selling assaults.

http://stocknessmonster.com/news-item?S=IMD&E=ASX&N=632508