# Mining Services Stocks



## Muschu (20 April 2012)

(Joe could you please redirect this to another thread if that is best?)

I am looking for, if it exists, a list of Mining Services stocks. Here I am thinking of companies such as ASL, MND, BKN etc.

I ask because I'd like to do a little research into the area.

Views on companies in the area would also be of interest.

With thanks

Rick


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## skc (20 April 2012)

Muschu said:


> (Joe could you please redirect this to another thread if that is best?)
> 
> I am looking for, if it exists, a list of Mining Services stocks. Here I am thinking of companies such as ASL, MND, BKN etc.
> 
> ...




The industry listing is Capital Goods.

http://markets.smh.com.au/apps/mkt/industrylisting.ac?code=2010&next=all

I think this list covers ~90% of what one would classify as mining services.

A few in there doesn't fit the bill, however. So DYOR.


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## Muschu (20 April 2012)

skc said:


> The industry listing is Capital Goods.
> 
> http://markets.smh.com.au/apps/mkt/industrylisting.ac?code=2010&next=all
> 
> ...




Many thanks skc.  That is some list !!


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## Julia (20 April 2012)

Rick, I haven't looked at skc's list yet but MND is one you might like to consider.


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## Muschu (20 April 2012)

Julia said:


> Rick, I haven't looked at skc's list yet but MND is one you might like to consider.




Yes.  Did OK with it previously thanks Julia but don't hold it right now.


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## skc (20 April 2012)

Here's one for you to research.... DSB.

You can thank me later


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## skc (4 May 2012)

These guys are getting a nice royal a$$ kicking today.

DCG -8%
MAH -7%
LCM -7%
SDM -6%
ASL -6%
NWH -5%
EHL -5%
BLY -4.3%
MND -4.3%
CPB -4%

So pretty much 15-20% retracement for most of these day. Granted that they've ran pretty hard since Feb.


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## peter2 (4 May 2012)

Add IMD, BOL, WOR to the list.

It might only be profit taking but there are no buyers stepping in. Bid depth's are very thin.

It's an eerie market atm. It's almost as though corporate investors think there will be a period of no growth. A sort of recessionary hole.


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## skc (4 May 2012)

peter2 said:


> Add IMD, BOL, WOR to the list.
> 
> It might only be profit taking but there are no buyers stepping in. Bid depth's are very thin.
> 
> It's an eerie market atm. It's almost as though corporate investors think there will be a period of no growth. A sort of recessionary hole.




Wait till we get to a stage where PE 8x is the new norm...


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## peter2 (4 May 2012)

Sorry I don't understand the consequences of your FA jargon.  (I'm a chartist )

If it means that prices may go lower, then yes we are already seeing that and I'll wait to see what happens at prior resistance levels (should be support). 
If it means that prices may stay in a smaller range then I'll have to get a different trading plan. 
If this means that prices won't trend as much, then


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## skc (4 May 2012)

peter2 said:


> Sorry I don't understand the consequences of your FA jargon.  (I'm a chartist )
> 
> If it means that prices may go lower, then yes we are already seeing that and I'll wait to see what happens at prior resistance levels (should be support).
> If it means that prices may stay in a smaller range then I'll have to get a different trading plan.
> If this means that prices won't trend as much, then




Just responding to your comments re: low growth.

PE is simply price/earning multiple. When times are good and people are optimistic about growth, PE multiple expands as the market is willing to pay more per dollar of earning. The opposite is true - when people are not expecting growth, PE multiple contracts as the market is willing to pay less per dollar of earning. This can happen independent of actual changes in earning.

Here's a good recent article on this...

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=0AEA99D7-92BF-277F-0AB3CD018878627A


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## Muschu (4 May 2012)

Competitiveness must be extreme in this area and margins tight... But perhaps fear among investors is an even bigger factor.


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## So_Cynical (4 May 2012)

Muschu said:


> Competitiveness must be extreme in this area and margins tight... But perhaps *fear* among investors is an even bigger factor.




Mining Services is a better dividend paying alternative to the miners...but still a proxy for the miners and metals and the BRIC bull, resources super cycle and all that...so if the China/BRIC bubble bursts the Mining Services stocks will get hammered too.


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## skc (28 November 2012)

skc said:


> These guys are getting a nice royal a$$ kicking today.
> 
> DCG -8%
> MAH -7%
> ...




NWH with a poor AGM update today spooked the sector once again. 

Sometimes I wish I am a hedge fund manager and can just hold big shorts on a macro basis.

The question is - given the choice - do you now short the weakest or the strongest?

Code       Price at last post          Price today             Change
DCG     ,             2.92                        ,2.23      ,               -24%
MAH      ,             0.675                      ,0.285     ,             -58%
LCM       ,             1.035                      ,1.07       ,              +3% 
SDM       ,             1.99                    ,    0.815     ,             -59%
ASL         ,            3.78                     ,   2.05        ,            -46%
NWH         ,          3.56                       ,  1.48         ,           -58%
BLY            ,         3.85                        , 1.33          ,         -65%
MND            ,       21.09                       ,21.83          ,         3.5%
CPB (ALQ)     ,       12.58                     , 9.63            ,         -23%

Incidentally it was ALQ's half year outlook statement that totally spooked the sector (plus bad mood in the general market) back in May. It looks like PE ~4x is the new norm for these guys.


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## peter2 (28 November 2012)

IMD , 2.55 , 1.265 , -50%
EHL , 0.97 , 0.515 , -47%
FGE , 6.07 , 3.68 , -39%
DSB , 0.88 , 0.57 , -35%
SVW , 9.77 , 7.34 , -25%
WOR , 27.25 , 24.52 , -10%

More huge % price drops in this sector since 4May12. Although the outlook was poor six months ago the percentage falls are huge. 

Are we there (the bottom) yet? Not yet IMO. 
They may need another six months, some M&A and China stimulus.


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## odds-on (4 April 2013)

I am currently following ASL, BLY, EHL and NWH. All of them are falling and long it may it continue. These mining services stocks are starting to get cheap again, hopefully they will reach the lows achieved before Xmas. 

Low PE + Low Price to NTA + Double Digit Dividend Yield = Cheap 

The big question for me is do I stock pick like last time (BLY and ASL) or just buy a basket of them? Thoughts? 

Cheers

Oddson


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## skc (4 April 2013)

odds-on said:


> I am currently following ASL, BLY, EHL and NWH. All of them are falling and long it may it continue. These mining services stocks are starting to get cheap again, hopefully they will reach the lows achieved before Xmas.
> 
> Low PE + Low Price to NTA + Double Digit Dividend Yield = Cheap
> 
> ...




Not actually agreeing or disagreeing with your premise... but picking the right stock is very important imho.

Minerals vs oil and gas exposure.

Capital works vs ongoing mining operations.

Balance sheet strength.

Australian only or global locations.

Services only or products.

Take ASL and BLY - while they appear to be similar... 12 months ago they were both $4. Today ASL is $2.55 while BLY is $1.15. You can definitely lose less by choosing the right stock.


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## odds-on (4 April 2013)

Minerals vs oil and gas exposure - Not fussed.

Capital works vs ongoing mining operations - Not fussed.

Balance sheet strength - Strong balance sheet. Plenty of cash etc..

Australian only or global locations - Global customer base.

Services only or products - Not fussed.

Balance sheet strength and customer base are key for me.

BLY is for gambling.


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## So_Cynical (4 April 2013)

There is a big bottom coming for the mining services stocks, when the resource boom development spend actually starts to fall, that's when it will get interesting...i hope to restrain myself until then.


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## chops_a_must (5 April 2013)

There are some good companies with decent performance in this space. Just have to think a little laterally.

For instance, TOX and MRM, not purely mining services, but in the space and performing well.


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## Muschu (5 April 2013)

I only have one mining services stock - although it also is an iron ore miner - and that is MIN.  Excellent dividend.  Struggling a bit at the moment but hanging in there and I remain 26% in front.

ASL is another I had and dumped some days ago at $2.77 and an 8% loss.


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## odds-on (8 April 2013)

Skc,

I decided to stock pick in the end. After crunching the numbers and looking at some statistics (average earnings, Altman Z score, Piotroski F score, etc) I decided to go with NWH on Friday last week.  Purchase price was 142.5 cents with a holding timeframe of up to 6 months or a reasonable return. Time will tell. 

BLY is interesting. I did some checks (again) and my expected value calculation result was 0.40 (i.e. probability of bankruptcy X payoff + probability of takeover x payoff + probability of no turnaround x payoff + probability of turnaround x payoff). I am in agreement with ROE about the upside but personally just not willing to hold the stock.

If ASL keeps dropping I will be interested…I love these mining services stocks at the moment.

Cheers

Oddson


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## odds-on (16 April 2013)

odds-on said:


> Skc,
> 
> I decided to stock pick in the end. After crunching the numbers and looking at some statistics (average earnings, Altman Z score, Piotroski F score, etc) I decided to go with NWH on Friday last week.  Purchase price was 142.5 cents with a holding timeframe of up to 6 months or a reasonable return. Time will tell.
> 
> ...




The sudden drop in BLY price today was just too tempting and I changed my mind! I have decided to spend a few nights onboard the sail boat "Boart Longyear", suspect I am going to be in for a few rough nights. In at $0.96 and not going to stay long.

ASL has gone into a trading halt. Earnings guidance to be released to the market.

Cheers


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## skc (16 April 2013)

odds-on said:


> The sudden drop in BLY price today was just too tempting and I changed my mind! I have decided to spend a few nights onboard the sail boat "Boart Longyear", suspect I am going to be in for a few rough nights. In at $0.96 and not going to stay long.
> 
> ASL has gone into a trading halt. Earnings guidance to be released to the market.
> 
> Cheers




Not a sudden drop. It was a readthru from the ASL announcement.

BLY did provide an earning update last year and the stock actually rallied after opening lower, as the update wasn't as bad as the market had expected.

ASL has fallen heavily leading up to this halt, so watch the action carefully. It may behave like BLY or it may behave like CGH.


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## odds-on (17 April 2013)

skc said:


> Not a sudden drop. It was a readthru from the ASL announcement.
> 
> BLY did provide an earning update last year and the stock actually rallied after opening lower, as the update wasn't as bad as the market had expected.
> 
> ASL has fallen heavily leading up to this halt, so watch the action carefully. It may behave like BLY or it may behave like CGH.




Shows my ignorance about how the market actually works . I just look for ideas by scanning for statistically cheap industrial stocks and nearly all of the results are mining services stocks (no surprise!). Expectations are being adjusted in the sector which provides short-term opportunities.


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## tinhat (17 April 2013)

I hold some FGE and BYL. Currently I am keeping my eye on MND. If it gets down to $20 it will be very tempting = good dividend yield.


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## tinhat (17 April 2013)

oh - I have some MIN too. Would add to it at the right price.


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## odds-on (17 April 2013)

skc said:


> Not a sudden drop. It was a readthru from the ASL announcement.
> 
> BLY did provide an earning update last year and the stock actually rallied after opening lower, as the update wasn't as bad as the market had expected.
> 
> ASL has fallen heavily leading up to this halt, so watch the action carefully. It may behave like BLY or it may behave like CGH.




Interesting day today. ASL released a downgrade in earnings guidance, I am going to have to revisit my calculations on this one.

Have all the mining services stocks issued downgrades in earnings guidance? 

Off to play street craps with the locals.

Cheers


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## odds-on (7 May 2013)

Decided to switch horses; BLY out ASL in. The steep price drop in ASL made it too good an opportunity not to take. Before Xmas i bought in at $2.33 and took profits at ~$2.90, this time I am in at $1.55...time will tell but it meets all my statistical criteria.

Cheers


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## skc (15 May 2013)

UGL and SDM profit warning today. There was no place to hide...

UGL -17%
EHL -10.1%
TSE -8.5%
ALQ -7.96%
MND -7.44%
FGE -7.7%
BLY -6.78%
ASL -6.75%
DOW -6.05% (even though they reaffirmed guidance just last week)
SVW -5.8%
NWH -5.36%
DCG -5.72%
CDD -4.88%
LEI -4%


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## odds-on (15 May 2013)

skc said:


> UGL and SDM profit warning today. There was no place to hide...
> 
> UGL -17%
> EHL -10.1%
> ...




And to think earlier this week I nearly took some profits on ASL....

Thanks for the list - half of the list still do not come up on my "Cheep cheep" stock screener so they still must have a fair way to drop.

I am going to focus on ASL, BLY and NWH.

Are you not tempted yet?

Cheers


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## craft (15 May 2013)

skc said:


> UGL and SDM profit warning today. There was no place to hide...
> 
> UGL -17%
> EHL -10.1%
> ...




I did my bit in trying to support UGL. Didn't work though.


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## Ves (15 May 2013)

craft said:


> I did my bit in trying to support UGL. Didn't work though.



Same with me...  I have been buying under $10.00, added even more today.  Still think it's cheap if you value all of the segments separately and apply reasonable assumptions to each for the long-term.


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## robusta (15 May 2013)

Just my two cents worth, it could be beneficial to look on that list for no debt and lots of cash on hand, I still hold FGE and while I won't be buying more at the moment selling is not on the agenda either. There should be some consolidation in this sector in the future.


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## odds-on (15 May 2013)

robusta said:


> Just my two cents worth, it could be beneficial to look on that list for no debt and lots of cash on hand, I still hold FGE and while I won't be buying more at the moment selling is not on the agenda either. There should be some consolidation in this sector in the future.




Good points...there are just too many companies for me to follow! Trying to keep it simple and keeping to the facts...cheep cheep, Altman Z Score, and company announcements. Everything else is noise.


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## chops_a_must (15 May 2013)

You people are doing what?


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## odds-on (15 May 2013)

chops_a_must said:


> You people are doing what?




Playing street craps


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## Bort (15 May 2013)

Look at one of the many industries that is going up. This area has been going where money does to die while the market is at highs....


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## skc (15 May 2013)

Actually, BKN, WOR and RCR didn't fall much today...



odds-on said:


> Are you not tempted yet?




Tempted to buy or to short? 

There will be the time to buy, but I doubt it is now. I don't mind buying AFTER the sector looks like it will turn back up. I will need to see big news like Chinese stimulus, commodities trending back up or big miners re-starting cap ex plans.

Having said that, market has a habit of buying up shares before the sector actually turns (look at building materials like BLD/CSR for example). We just don't know where the bottom is just yet.



Ves said:


> Same with me...  I have been buying under $10.00, added even more today.  Still think it's cheap if you value all of the segments separately and apply reasonable assumptions to each for the long-term.




UGL is an interesting one as it was only 2 months ago when its property services unit was supposed to worth $1b. Today the market cap is only $1.3b.


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## Bort (15 May 2013)

Ctd. Gem. Rea. Why bother with rocks that didn't go down too much today?


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## craft (15 May 2013)

skc said:


> UGL is an interesting one as it was only 2 months ago when its property services unit was supposed to worth $1b. Today the market cap is only $1.3b.






> In addition, over 40 percent of Group earnings are now generated offshore.






> Expected to deliver its eleventh consecutive year of earnings growth, we anticipate Property will continue to deliver long term growth as it expands to nearly 50 percent of Group earnings in the next few years. Internationally, we are encouraged by the growth potential in both the USA and Asian markets, particularly China where we anticipate growth of nearly 20 percent in FY2013.




Baby out with the bath water?


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## Ves (15 May 2013)

skc said:


> UGL is an interesting one as it was only 2 months ago when its property services unit was supposed to worth $1b. Today the market cap is only $1.3b.



The property services unit (DTZ) is where all the future growth will be.   The demerger will probably happen now, and will probably unlock some value.   I think there's a good risk / reward play at these prices long-term.  My average is about $9.   Underwater for now, nothing new there, I usually begin that way!


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## McLovin (15 May 2013)

Ves said:


> Same with me...




+2. 

For the same reasons mentioned. I particularly like the offshore earnings bit.


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## skc (15 May 2013)

This from last night's budget paper...




Mean reversion would means the pie is about 1/3 of where we are now.


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## So_Cynical (15 May 2013)

So_Cynical said:


> (4th-April-2013) There is a big bottom coming for the mining services stocks, when the resource boom development spend actually starts to fall, that's when it will get interesting...i hope to restrain myself until then.




I continue to restrain myself...the spend wont actually peak for another 6 to 8 months.


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## Intrinsic Value (16 May 2013)

robusta said:


> Just my two cents worth, it could be beneficial to look on that list for no debt and lots of cash on hand, I still hold FGE and while I won't be buying more at the moment selling is not on the agenda either. There should be some consolidation in this sector in the future.




I sold out all my FGE a couple of months back near its high but if it goes way back down to 4 dollars or under again I think I will load up again.

Good managed businesses with plenty of cash will always do well in the long run. In fact a period of consolidation could work very nicely in FGEs favour.

It is a shame that they didn't pay higher dividends as that would have boosted the share price.  I mean I think they had 200 million cash or thereabouts. The could well have paid a large dividend and still had plenty in the coffers.


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## tinhat (16 May 2013)

Intrinsic Value said:


> I sold out all my FGE a couple of months back near its high but if it goes way back down to 4 dollars or under again I think I will load up again.
> 
> Good managed businesses with plenty of cash will always do well in the long run. In fact a period of consolidation could work very nicely in FGEs favour.
> 
> It is a shame that they didn't pay higher dividends as that would have boosted the share price.  I mean I think they had 200 million cash or thereabouts. The could well have paid a large dividend and still had plenty in the coffers.




I believe that management have stated a desire to acquire businesses at the right price. I think a lot of people have viewed them in the recent past as an inspiring Monodelphous.


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## VSntchr (16 May 2013)

Ves said:


> Same with me...  I have been buying under $10.00, added even more today.  Still think it's cheap if you value all of the segments separately and apply reasonable assumptions to each for the long-term.




I have been working on doing divisonal valuations this week - and even before I've finished I can safely assume this ones cheap. I'm glad I've been so busy as its been getting cheaper and I don't have much capital left to average down at the moment!


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## Huskar (16 May 2013)

VSntchr said:


> I have been working on doing divisonal valuations this week - and even before I've finished I can safely assume this ones cheap. I'm glad I've been so busy as its been getting cheaper and I don't have much capital left to average down at the moment!




I don't know. It could also be a classic value trap where hindsight is driving expectations - I think shorter term there is more money to be made on the short side vs the long. But I suppose that is the beauty of the market - you can take completely opposite sides of a trade and both make money if your time frames are different..


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## Mutasim (16 May 2013)

These companies all look pretty cheap, but is it possible to predict where they'll bottom out? ASL trading on 3.85 P/E...


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## skc (16 May 2013)

Mutasim said:


> These companies all look pretty cheap, but is it possible to predict where they'll bottom out? ASL trading on 3.85 P/E...




Trailing PE... you need to throw that in the bin and focus on estimating forward PE 2-3 years out (which is really quite difficult and will no doubt be wrong).

BLY AGM on 21 May and everyone is expecting further profit downgrade... whatever BLY says will be read-through to ASL.


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## Intrinsic Value (17 May 2013)

tinhat said:


> I believe that management have stated a desire to acquire businesses at the right price. I think a lot of people have viewed them in the recent past as an inspiring Monodelphous.




FGE nice contract win 290 million.


Share price down to 4.60 circa tempted to buy in again but there is so much momentum against the sector I am going to wait and try and get them at around 4.00


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## odds-on (17 May 2013)

skc said:


> Trailing PE... you need to throw that in the bin and focus on estimating forward PE 2-3 years out (which is really quite difficult and will no doubt be wrong).
> 
> BLY AGM on 21 May and everyone is expecting further profit downgrade... whatever BLY says will be read-through to ASL.




At current price (~$1.30), ASL is trading at a Price to 10 Year Average EPS of ~6. They have paid a dividend every year for the last 10 years.

Cheap.


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## craft (17 May 2013)

odds-on said:


> At current price (~$1.30), ASL is trading at a Price to 10 Year Average EPS of ~6. They have paid a dividend every year for the last 10 years.
> 
> Cheap.




Probably need to look back a little further then 10 years to get a full cycle.


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## chops_a_must (17 May 2013)

A serious question.

Which of these stocks do people think have a chance of going bust?


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## VSntchr (17 May 2013)

chops_a_must said:


> A serious question.
> 
> Which of these stocks do people think have a chance of going bust?




AZG


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## skc (17 May 2013)

VSntchr said:


> AZG




DTQ comes to mind.

COF might need some capital at some stage.

NFK was on the brink before RCR took them over with a "negative premium".

But this list is pretty pointless as most people probably have a slightly higher investment criteria than just not going bust...


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## odds-on (17 May 2013)

craft said:


> Probably need to look back a little further then 10 years to get a full cycle.
> 
> View attachment 52248




Hi Craft,

Good point, thanks for the chart - do you keep ~20 years worth of historical data on all ASX stocks?

Cheers


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## odds-on (17 May 2013)

skc said:


> But this list is pretty pointless as most people probably have a slightly higher investment criteria than just not going bust...




Ha ha ha.......my investment criteria is based on looking for companies that are not going bust (and are cheap), simply because it is easier to predict bankruptcy than earnings. If a company does not go bankrupt, what is going to happen? It is going to stay in business!

If some of the mining service companies do go bust, does this not leave more of the (reduced) pie to share?

Cheers


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## chops_a_must (17 May 2013)

odds-on said:


> If some of the mining service companies do go bust, does this not leave more of the (reduced) pie to share?
> 
> Cheers




It'll probably be the time to buy...


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## Intrinsic Value (21 May 2013)

FGE under 4 dollars today.

Mining services are getting slaughtered.

Sooner or later FGE is going to be a very good buy.

The downward trend has so much momentum that it could go down to ridiculous levels.

I am waiting on this one who knows how far it will drop with sentiment going so far against mining services companies. Maybe 2 dollars or less?


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## Huskar (21 May 2013)

odds-on said:


> Ha ha ha.......my investment criteria is based on looking for companies that are not going bust (and are cheap), simply because it is easier to predict bankruptcy than earnings. If a company does not go bankrupt, what is going to happen? It is going to stay in business!




That is silly because with those spectacles you have forgotten about opportunity cost - the best foregone alternative...

Far better to sit in cash and ready to seize on the better opportunity. 

When I say opportunity cost here I don't just mean economic cost but also mental cost (in terms of stress or barely conscious shifts to decision making) of having money tied up doing nothing.


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## robusta (21 May 2013)

Intrinsic Value said:


> FGE under 4 dollars today.
> 
> Mining services are getting slaughtered.
> 
> ...




Yes there should be some opportunities in this sector sooner or later, I would prefer to pay a price as close as possible to NTA however.

I must admit to not being able to get my head around UGL, the debt bothers me and I can't understand any advantage they have over other businesses in property management.  I have been meaning to have a look at CDD for a while now, I don't think they have too much exposure to mining services but have been sold off anyway.


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## Intrinsic Value (21 May 2013)

robusta said:


> Yes there should be some opportunities in this sector sooner or later, I would prefer to pay a price as close as possible to NTA however.
> 
> I must admit to not being able to get my head around UGL, the debt bothers me and I can't understand any advantage they have over other businesses in property management.  I have been meaning to have a look at CDD for a while now, I don't think they have too much exposure to mining services but have been sold off anyway.




I am not a fan of UGL and they wont get any of my money. They are run by cowboys imho. Construction mentality. 

On the other hand FGE is looking good. I had a look at their investor presentation today and 65 percent of their revenue is from power contracts and 25 percent related to iron ore so it is not as exposed as other companies to commodity prices and China. Further their outlook for 2014 is currently around 500 odd million which is less than they have at the moment but there is also plenty of time for them to win more contracts. And as long as they can effectively reduce costs with a reduced revenue which l believe they can then they are looking good. They also have 187 million in the kitty and that positions them well for acquisitions at bargain rates should something interesting come along. If the management continues to be good then FGE will keep getting better slowly over time.

While the whole sector is being market down it is just a waiting game now to pick the better stocks when this downward momentum settles down.


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## RottenValue (22 May 2013)

Have to agree that FGE is looking good - maybe a little better than good .

At a SP of $3.90, the market is valuing the company at $336M.  As of Dec 31 2012, they had $187M in cash.

Their order book had them fully sold to make $1B in revenue and about $70M in profit for 2013, giving an EPS of around 80c per share.  Given that their 2014 year has about $850M already sold following their recent $290M contract win, worst case is they have no growth 2014 and make about 80c per share.

DYOR but you now are able to pick up a profitable $1B annual revenue company at a PE of 2. 

Unless you believe that they will go out of business in 2015, or make a stupid capital decision with the cash, risk/reward equation seems attractive.

Disclosure:  already a holder and happily adding


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## McLovin (22 May 2013)

Intrinsic Value said:


> I am not a fan of UGL and they wont get any of my money. They are run by cowboys imho. Construction mentality.




Perhaps. But they've got a pretty good board member in Robert Denham. He is the guy Buffett picked out to run Salamon for him and who advised him on his investment in Goldman. Before that he ran Munger, Tolsen & Olsen (Charlie Munger's old law firm) where he is still a partner. He also sits on the board of Oaktree Capital, run by Howard Marks. He's no dummy and I doubt he would associate with corporate knaves.


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## Intrinsic Value (22 May 2013)

McLovin said:


> Perhaps. But they've got a pretty good board member in Robert Denham. He is the guy Buffett picked out to run Salamon for him and who advised him on his investment in Goldman. Before that he ran Munger, Tolsen & Olsen (Charlie Munger's old law firm) where he is still a partner. He also sits on the board of Oaktree Capital, run by Howard Marks. He's no dummy and I doubt he would associate with corporate knaves.




I dont know about Robert Denham but I do know the culture that was there when I was involved with them back in 2008-09 and they blew lots of money on their customer projects with Woodside, BHP etc.


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## McLovin (22 May 2013)

Intrinsic Value said:


> I dont know about Robert Denham but I do know the culture that was there when I was involved with them back in 2008-09 and they blew lots of money on their customer projects with Woodside, BHP etc.




Fair enough. FWIW, the mining services side of the business is of little interest to me, I'm all about the property!


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## skc (23 May 2013)

This from business spectator



> The Bureau of Resources and Energy Economics has put some numbers around the likely fall off in resources investment and they aren’t pretty.
> 
> On the bureau’s analysis, the likely scenario for investment in resources and energy is that it has already peaked, at about $268 billion last year, and will start falling quite sharply from next year before tailing off to only about $25 billion in 2018, roughly around the levels experienced in 2007.
> 
> Read more: http://www.businessspectator.com.au...dgy-brakes-see-mining-miss-peak#ixzz2U7FLwenj




AZG suspended itself today. It's been living on a credit card for some time...


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## Intrinsic Value (23 May 2013)

I was watching Your Money Your Call tonight and there was an email from a viewer asking whether FGE would be a good medium term buy.

And one of the experts Michael McCarthy was saying that UGL , Transfield and Forge were all in trouble and that they  may not be around in a few years time because there would be consolidation in the sector and they probably wouldn't survive.

Now I might agree with him on Transfield but these guys know nothing of the fundamentals of FGE. With 187 million in cash and forward contracts for the next year I don't think they are going anywhere.

 I also think t hey are dead wrong on UGL as well because UGL is a lot more than a mining services company. They have power, maintenance, real estate etc


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## skc (20 June 2013)

VSntchr said:


> AZG




You jinxed them! 

Administrators appointed.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01418665

More bad news today.

Downgrade by EHL - utilisation now only 42.5% in Australia and 55% in Canada. Even work on oil sands there is slowing down.

BOL lost a big contract with BHP at Port Hedland.

MAH down 20% on no specific news at all.


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## peter2 (20 November 2013)

Five months later and we know that economic conditions in Aust have not improved. They may be deteriorating at a slower pace but there are no signs yet of a turnaround. The mining sector has been suffering for a while now and I was expecting to seeing some signs of increasing demand in this sector at this time of the year. I was wrong with ASL, FGE and now WOR announcing massive falls in profit and poor outlooks.

This once fav sector of mine has become a definite no-buy, no hold zone.


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## tinhat (20 November 2013)

peter2 said:


> Five months later and we know that economic conditions in Aust have not improved. They may be deteriorating at a slower pace but there are no signs yet of a turnaround. The mining sector has been suffering for a while now and I was expecting to seeing some signs of increasing demand in this sector at this time of the year. I was wrong with ASL, FGE and now WOR announcing massive falls in profit and poor outlooks.
> 
> This once fav sector of mine has become a definite no-buy, no hold zone.




I currently hold NWH, MIN and MLD. NWH for income, MIN and MLD as a growth oriented income stocks. I'm don't know whether I will own MIN and MLD at the end of the week but I think those companies have decent balance sheets and outlooks. I think it is important to distinguish between those companies where service mine production versus mine construction. There is an awful lot of dirt being blast, dug and moved about these days.


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## odds-on (3 March 2014)

craft said:


> Probably need to look back a little further then 10 years to get a full cycle.
> 
> View attachment 52248




I wonder what this chart would look like if updated with the HY results?.... I am guessing a downward trend


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## odds-on (3 March 2014)

So_Cynical said:


> I continue to restrain myself...the spend wont actually peak for another 6 to 8 months.




Hi So Cynical,

Are you continuing to restrain yourself? I am starting to form the view that this sector needs a few more companies to fail and then it will be like shooting fish in a barrel, what are your thoughts?

Cheers


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## So_Cynical (3 March 2014)

odds-on said:


> Hi So Cynical,
> 
> Are you continuing to restrain yourself? I am starting to form the view that this sector needs a few more companies to fail and then it will be like shooting fish in a barrel, what are your thoughts?
> 
> Cheers




Yes still in restraint mode somewhat concerning Mining services stocks...there have been in and out opportunity's over the last 12 months and there will be over the coming 12 months im sure, personally i have done a successful super fund in and out with EHL as the stock interests me, everything else im very wary of.

I suppose its the big guns that should be getting most of our attention...i have them all in a 15 month old watchlist and have come to the conclusion that at least half of them appear to be ranging and tradable, i reckon some of them have seen bottom, just don't know which ones.  

Thinking about it one should probably be building a position into 2 or 3 favourites.


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## ROE (3 March 2014)

Trade in and out is the way to go for these guys, next 24 months doen't look good with BHP fired the first shot in house their service and take control of the whole cycle rather than contracting to service providers, if RIO and other miners follow look out below. See why MLD management cashing out with the special dividend play 

I have a few favourite with solid balance sheet I trade in and out...even with that short of balance sheet things can turn ugly quick.

the whole sector need to be in a single digit PE to compensate for the extreme risk


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## Valued (3 March 2014)

If you were going to trade stocks then there are better sectors to go long in then mining. You may even find mining a reasonable sector to short in a market down turn.


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## notting (12 August 2014)

Having a real day out today!
Not sure why exactly.
Something coming from China?


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## peter2 (13 March 2015)

Am I the only one to see early signs of demand in this sector?  

There are certainly more dogs than darlings. I'm interested to see the two big names, MND and WOR climbing off recent lows. Both stocks have gone XD and yet their prices are being bid up.


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## galumay (13 March 2015)

peter2 said:


> Am I the only one to see early signs of demand in this sector?
> 
> There are certainly more dogs than darlings. I'm interested to see the two big names, MND and WOR climbing off recent lows. Both stocks have gone XD and yet their prices are being bid up.




I hold both MND & NWH as contrarian investments in a train crash of a sector, there is no recovery in reality, MND's H1 was not as awful as it might have been and they did maintain a dividend. There will be a few yield chasers in there supporting the price.

You need to have patience and a long term view to hold these babies!


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## peter2 (13 March 2015)

yeah, got to love those yield chasers. They'll chase a 0.43 div and ignore the subsequent 1.00 price drop. 

What about WOR, damaged sector with a damaged commodity?


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## VSntchr (13 March 2015)

peter2 said:


> Am I the only one to see early signs of demand in this sector?
> 
> There are certainly more dogs than darlings. I'm interested to see the two big names, MND and WOR climbing off recent lows. Both stocks have gone XD and yet their prices are being bid up.




MND dropped from 9.80 to 8.40 post the dividend...which was a bit extreme IMO...so just a bit of a short term correction to the upside here


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## skc (13 March 2015)

peter2 said:


> Am I the only one to see early signs of demand in this sector?
> 
> There are certainly more dogs than darlings. I'm interested to see the two big names, MND and WOR climbing off recent lows. Both stocks have gone XD and yet their prices are being bid up.




The sector has been strong of late (i.e. past 2 sessions), but there have been plenty of up spikes in this drawn out downtrend. Question is whether this is THE ONE... 

There was an article on the Fin Review quoting some large Canadian mining services outfit looking for acquisition in Australia, particularly in the oil and gas area. WOR fits that bill pretty good and probably explains majority of the rally / short covering.


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## notting (13 March 2015)

skc said:


> The sector has been strong of late (i.e. past 2 sessions), but there have been plenty of up spikes in this drawn out downtrend. Question is whether this is THE ONE...
> 
> There was an article on the Fin Review quoting some large Canadian mining services outfit looking for acquisition in Australia, particularly in the oil and gas area. WOR fits that bill pretty good and probably explains majority of the rally / short covering.




WOR More like insider trading before today's big contract announcement that had no figures to go with it so people are still hoping it's a boomer so the up trade continued today on the thought, 'well if the insiders were so happy as we don't know the full deal yet then let' back them.'
Soon to reverse.
Not nearly time for The One.  The world will look very different when that happens!


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## peter2 (19 June 2015)

WOR and MND seem to be holding on, while many others are "slip sliding away". 

IMD, BOL, EHL, NWH, BKN  Their charts look horrible.


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## leyy (19 June 2015)

peter2 said:


> WOR and MND seem to be holding on, while many others are "slip sliding away".
> 
> IMD, BOL, EHL, NWH, BKN  Their charts look horrible.




Add LYL to the list too


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## peter2 (9 October 2015)

This sector is having a nice rally along with the price of oil. 

The prices in MND, WOR, MAH, RCR, UGL, SVW, ASL, BLY, MLD are well off their recent lows. 

As I'm a chart trader I'll be waiting for higher lows or a broad sideways range (basing pattern) for my buy signals. It's good to see that there is demand for this sector and it signals an improved outlook for a rally in the broader market.


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## Paavfc (10 October 2015)

TPP blue chip management..


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## ThirtysixD (13 October 2015)

This week I bought into CMI for my partner and I.

I thought it was good value at 2.5 EV/EBITDA. 
34m Cash after divesting TJM at the beginning of the year.
Highly leveraged to the mining industry (coal in particular) but electrical division is still profitable.
Special dividend or acquisition is highly likely.


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