# SDM - Sedgman Limited



## blinkau (8 June 2006)

It floated today at $1 reached a high of $1.45 and closed at $1.30. Has anyone else participated in this stock and what are your thoughts on it?


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## wealthyshare (8 June 2006)

blinkau said:
			
		

> It floated today at $1 reached a high of $1.45 and closed at $1.30. Has anyone else participated in this stock and what are your thoughts on it?




Missed out, posted the cheque on first day open, received the cheque back today   , i also sent a cheque to Ausenco IPO, will be ended up with zero for sure


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## Absolutely (12 February 2007)

Sedgeman, a successful coal specialist, has recorded recent strong rises due I believe it's recent purchase of Pac-Rim which signals an expansion outside of the coal business in to the greater resources market. It is also expanding internationally.

It is a well run company with a good reputation in the coal business. On listing last year, construction giant Thiess picked up 30%+ ownership.

It listed at $1 but closed today at $2.14 with a strong buy side and little selling. After watching recent trading and noting the performance of other mining industry consultants (ie Ausenco) recently, a growing familiarisation with Sedgman should see some additional SP growth soon.

I have decided to take a chance. Anyone else holding or can comment ?


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## trinity (2 July 2007)

It's at 3.40 today.  I missed out and wished I bought some 2 weeks ago... so much easier in hindsight


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## Absolutely (3 July 2007)

Well let's kick ourselves together. I rode it from $2.00 to $2.40 but was unconvinced regarding upward momentum at the time. Sold only about a month ago.

I shall never be rich.


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## TheAbyss (11 February 2009)

Absolutely said:


> Well let's kick ourselves together. I rode it from $2.00 to $2.40 but was unconvinced regarding upward momentum at the time. Sold only about a month ago.
> 
> I shall never be rich.





Looks like Sedgeman may be turning the corner. Very thinly traded and been treading water around the 40 cent mark since the uncertainty for mining services companines raised its head last quarter.

Sedgeman confirmed guidance etc yesterday and up 10% today and looking like going further based on their guidance (7.9cents per share).

Anyone have any thoughts on the announcement yesterday? 780,000 on the buy side and 46,000 on the sell so some room to run here i suspect.

http://www.asx.com.au/asxpdf/20090210/pdf/31fzjxhbx6rnzq.pdf


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## chakvetadze (22 January 2012)

Watch this space. Stock is cheap on fundamentals.


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## McCoy Pauley (23 January 2012)

Appreciate the sentiment.  But why do you think the company is cheap on its fundamentals?


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## Noddy (11 June 2012)

Seems to have reached a nadir on the chart and gaining support around $1.60.
Solid company in the resources sector with increasing sales and profits.
Perhaps being supported by a dividend around 5% at the $1.60 level.
Any comments welcome.


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## So_Cynical (23 July 2012)

I entered Sedgman today...brought 3060 for the super fund @ $1.52 ~ i have decided to add a few Mining and Civil services stocks to my super portfolio as a bit of an experiment, just buy what's cheap and wait for a sustained risk on period to take profits and then recycle capital into what's cheap.


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## skc (23 July 2012)

So_Cynical said:


> I entered Sedgman today...brought 3060 for the super fund @ $1.52 ~ i have decided to add a few Mining and Civil services stocks to my super portfolio as a bit of an experiment, just buy what's cheap and wait for a sustained risk on period to take profits and then recycle capital into what's cheap.




Good outfit in an unloved sector. However I don't know what is their profit split between new mine design vs ongoing operations... That will determine how resilient their earnings will be if the mining cap-ex tap is turned off.


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## Vader (18 August 2012)

Anyone with thoughts on SDM?

I bought in with the price at $1.49, so down a little at the moment but their prelim report is due out on Monday and I think we should see some nice price movement for the first few days of the week.

Earnings guidance has already been released saying profits are up significantly on last year (NPAT 37-42m compared to 26m in 2011), but the price is still hovering down around it's 52W-low.

There seems to be two main things keeping the price down at the moment.

The first is obviously the decline of the mining boom and the reluctance for mining companies to spend on Capex... so one of the big things that may move the price on Monday is a continuing strong pipeline of work and a positive outlook on growth for the coming year... given we've had a couple of positive forecasts from a couple of other mining engineering companies and a decent chunk of SDM's work revolves around coal prep plant maintenance (even if capex dries up, companies will still need to maintain existing plants), I'm expecting this news should still be quite positive.

The second factor, which could cause some more short term volatility is due to the poor state that Leighton's find themselves in. LEI own just over 30% of SDM and there is talk about them needing to sell off some of their non-core assets to make up for a couple of really bad projects they've had to prop up over the last couple of years. So until that clears up a bit it may keep prices a bit subdued (LEI obviously aren't going to try for a takeover anytime soon, but if they do sell, then whoever buys it may find themselves wanting more? As long as they don't try to sell on the open market and flood the queue with shares, I can't see it being a big issue)

I guess another factor is how much the dividend will increase given the jump in profits - there is the potential for it to make a very nice yield at current prices and if coupled with a good outlook for the next FY should help push the price up nicely this week.

So what am I missing? Is there anything else that might stop this jumping up 10%+ next week? Have short-term traders got their eyes on this one?


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## Vader (19 August 2012)

Vader said:


> their prelim report is due out on Monday




Actually, looks like the prelim report is coming out Thursday... Bell Direct says 20th, but a recent notice SDM put out says 23rd.


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## Vader (23 August 2012)

Not quite the reaction I was looking for, but nice results nonetheless.

The market seems a bit disappointed by it given that profits were at the bottom end of guidance and the order pipeline has gone down a bit... but there's a lot to like about their results.

They have gone from a net cash position in FY11 of 14m to net cash of 65m in FY12 and margins have gone up in the past year too... for me, that's the main takeaway here. Dividend has also increased, 6.5c announced for the half, bringing the current year to 11c, giving a yield of just over 8% at current prices.

These guys have a solid business that is pulling in nice money... and while their order pipeline has contracted a bit, it's still at very healthy levels and they're in the process of growing/expanding a whole new side of the business (metals processing). The dividend yield is insane and all it needs is a couple of new contract announcements (they are currently in advanced discussions for 3 at the moment) for the share price to grow too.

...anyway - I've increased my holdings - whether that proves to be a smart thing or not I guess we'll see, but I'm happy to hold and take the dividends and see if they can secure enough contracts to maintain growth... seems really undervalued to me (yes I know the mining boom is supposedly over and BHP in particular aren't in a good place... but even BHP have said they're going to increase coal production, which should result in more work for Sedgman - but time will tell).


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## So_Cynical (5 September 2012)

Sedgman getting smash lately along with most of the mining and mining services stocks...so i got a few more for my super fund at $1.07 (including brokerage) my average price is now $1.38  oh well in for the long haul.


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## Vader (6 September 2012)

So_Cynical said:


> Sedgman getting smash lately along with most of the mining and mining services stocks...so i got a few more for my super fund at $1.07 (including brokerage) my average price is now $1.38  oh well in for the long haul.




...I'm right there with you, I've also picked up a few more bringing my average price down to $1.38 too, lol.

Interesting news during the week though, that the government figured out they couldn't shut down two big nasty carbon spewing coal fired power stations - and this just after scrapping the floor on the carbon price... so with the coal seam gas industry starting to show some cracks (environmental, and economic issues) is this another sign that we will soon start to see a pick up in confidence of the coal industry over the next couple of years? and with SDM starting to expand into China and Africa (possibly the two biggest coal production regions over the next 10+ years), the coal prep plant side of their business should remain quite strong.

...that's my theory anyway and I'm sticking to it


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## Vader (28 November 2012)

Trading halt today... relating to a proposed transaction.

Anyone got any ideas on what it's about? 

Given that Leighton's announced today that Thiess have just won a $220m contract with BMA in Qld, of which $125m is for the construction of a Coal Handling and Prep Plant... that seems a likely deal for the Thiess / SDM JV (Thiess own aprox 30% of SDM)... if that's the case, this should represent a pretty big contract for SDM and put a bit more sensibility back into the share price.

...if it's just something minor like the $2m payment owed to them by Nathan Tinkler, I'll be a bit disapointed, lol.


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## Vader (28 November 2012)

Ok... mystery solved - taking over a South African mining contractor (MDM Engineering)... good that it diversifies their offerings (both geographically and away from a huge reliance on coal based projects), but it does get rid of their entire cash surplus and will leave them with a little bit of net debt.

Haven't looked closely at MDM yet, but if it achieves what SDM have said it will there could be quite a lot of growth there.

...and I'll have to look into it more, but that contract that Thiess won today still makes sense that SDM should get a piece of that, will need to look out for more info.


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## Muschu (11 February 2013)

So_Cynical said:


> Sedgman getting smash lately along with most of the mining and mining services stocks...so i got a few more for my super fund at $1.07 (including brokerage) my average price is now $1.38  oh well in for the long haul.




Still holding SC?  I am considering this one.


Regards

Rick


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## So_Cynical (11 February 2013)

Muschu said:


> Still holding SC?  I am considering this one.
> 
> 
> Regards
> ...




Yep as per usual still holding, the whole coal sector is still very depressed, so if your a longer term believer as i am then the current weakness is an opportunity.

DSB is another coal services provider you mite want to have a look at.


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## skc (11 February 2013)

So_Cynical said:


> Yep as per usual still holding, the whole coal sector is still very depressed, so if your a longer term believer as i am then the current weakness is an opportunity.
> 
> DSB is another coal services provider you mite want to have a look at.




DSB is mostly in contract mining whereas SDM has a lot more capital works... so slightly different revenue outlook. MYE is the closest peer to DSB.


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## JTLP (24 February 2013)

So_Cynical / SKC - you guys still holding this?

Just had a read of the HY report - seems pretty bleak and can't see this going anywhere for some time. Down across the board on basically every key metric and they don't seem to confident about the future...


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## So_Cynical (24 February 2013)

JTLP said:


> So_Cynical / SKC - you guys still holding this?
> 
> Just had a read of the HY report - seems pretty bleak and can't see this going anywhere for some time. Down across the board on basically every key metric and they don't seem to confident about the future...




As per usual im still holding, SKC i doubt very much.

Sedgman like the rest of the coal industry/stocks is having a hard time, the coal price and demand hasn't bounced like some of the other hard commodity's...im a believer in coal and energy in general so will hold into the foreseeable future.


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## finicky (31 May 2013)

I have some SDM shares. Welcomed the announcement about ditching the MDM acquisition as I suspect most holders did.
Sent off an email today to the company secretary asking if there will likely be an update soon clarifying the company's condition.

In particular I asked if there could be comment on the company's $49m net cash balance at Dec 31. Has there been much erosion from the costs of the aborted MDM takeover and the litigation against DML?

Also asked what is happening with the $90 million EPC Mungari Gold Project announced in February and predicted to start construction in April. No word of it yet so will it be deferred/canceled? Expect another hit to SP obviously if any disappointment there. Note gold too, SDM not just coal.

Also asked if the company now intends to conserve cash while mining investment slides or is Segman still looking for a way to blow its surplus cash?

I'm actually not completely against buying a few more if the picture clarifies and they hang on to that cash. Good record until this last half.


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## Ann (3 June 2013)

This stock hit my radar today when I was trawling for bottom feeders. It is displaying a near double bottom which may send it higher soon.


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## finicky (22 June 2013)

They didn't respond to my emailed queries. It continues as a mystery as to whether the $90 million EPC Mungari Gold Project announced in February and predicted to start construction in April has been deferred/cancelled or just delayed.

Weekly chart shows a record high volume in the last week of May, then an engulfing candle this week, with the low just off the level of the major low in 2009

Stock held and sentiment:hold


http://i42.tinypic.com/acbxj4.gif


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## finicky (5 July 2013)

Have to be a pretty robust chart low formed for a mining service company specializing in coal.
Can't trust a company where there is no response to a shareholder's questions though.
Performed well during the commodities boom and has cash net of debt. 
But then again the boom looks over and they've just managed to wriggle out of a badly timed acquisition that would have consumed the cash and added debt and share issuance.


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## Country Lad (15 July 2013)

I did some of my weird scans over the weekend which sometimes come up with odd results.  This was one.  It would have to make the same remarkable recovery as it did in early 2010.  Still a break may be worth following for a quick trade.

Cheers
Country Lad


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## peter2 (17 September 2013)

It's been a long wait for this break out.


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## notting (17 September 2013)

peter2 said:


> It's been a long wait for this break out.




Given New Hopes efforts today one would suspect this may be short lived.
Volume was hardly cracker jack.


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## Country Lad (17 September 2013)

peter2 said:


> It's been a long wait for this break out.




Not yet a break from the way I look at it.

Cheers 
Country Lad


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## Tano (17 September 2013)

Hi Country Lad
Whats the Box Size and Reversal amount for the P&F chart above? I am trying to plot in Amibroker.

Thanks


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## Country Lad (17 September 2013)

Tano said:


> Whats the Box Size and Reversal amount




2 cent box size, 3 point reversal, closing price.

Cheers

Country Lad


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## Tano (17 September 2013)

Country Lad said:


> 2 cent box size, 3 point reversal, closing price.
> 
> Cheers
> 
> Country Lad




Brilliant, thanks


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## finicky (18 September 2013)

notting said:


> Given New Hopes efforts today one would suspect this may be short lived.
> Volume was hardly cracker jack.




Just an amateur view but ...

.. NHC performance might affect SDM sentiment, but practically the most important measure should be volumes of coal being produced in Australia and other locations where SDM is active. It's primarily but not exclusively a coal handling/preparation plant builder, maintenancer, operator - not as sensitive to coal price as a producer like NHC, more sensitive to volume of production. Profit margin could be affected by squeezed producer clients admittedly. On the topic of coal volume I've been looking around for an article that I recently browsed predicting coal volume will rise through to 2017 but can't now locate it.

In the mining services sector generally there were a few companies that were probably punished unduly by market sentiment when capital expansion by producers was seen to have peaked. These companies were the ones that were more about volume of production than development or exploration: possibly FGE, MLD, NWH, LYL, SXE ...


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## Country Lad (18 September 2013)

finicky said:


> These companies were the ones that were more about volume of production than development or exploration: possibly FGE, MLD, NWH, LYL, SXE ...




I think it is more about how those companies have managed the changes of the business of their customers and adapted to the need for a different business model.

LYL and MLD are probably handling the changed conditions better than the others.

Cheers
Country Lad


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## notting (18 September 2013)

LYL is a little cracker and has very long term contracts.


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## peter2 (25 September 2013)

SDM - break-out. Are we there yet on the CL P&F chart? 

I am still wary due to the thin bid depth.


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## Country Lad (25 September 2013)

peter2 said:


> Are we there yet on the P&F chart?
> 
> I am still wary due to the thin bid depth.




Yes break both the P&F and CBL.  Volume reasonable, but the market sentiment is nothing to write home about.  Let's see what tomorrow brings after this break.

Cheers
Country Lad


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## piggybank (9 November 2013)

Latest update - http://stocknessmonster.com/news-item?S=SDM&E=ASX&N=766609


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## piggybank (10 December 2013)




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## Miner (11 December 2013)

piggybank said:


> View attachment 55764




Piggy Bank

First of all I am not chartist. Fundamentally I will not be shocked to see SDM to follow suits with Worley Parsons WOR or AAX Ausenco. Both AAX and WOR have better hold of contract work probably than SDM has. resourcewise and capability wise WOR and AAX have been at an envious order book position. If I can draw the corollary I see the bouncing cat for SDM could be a tall asking
DYOR

Cheers


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## finicky (11 February 2016)

So to update - this one has been a rare goody in the mining service sector.
However it is now subject to a hostile takeover bid from Cimic Group, the entity that absorbed Leightons.
Bid is at 1.07
Sedgman SDM has been paying big dividends over the course of this discussion, including a special dividend of 2.2c to add to the fy15 final div of 3.8c. The total years franked div for fy15 was 9.5c.

I regret the takeover - SDM has loads of cash, $109m as at June 2015, and has shown its versatility by moving beyond its specialty of coal handling and preparation plants. It has tackled other minerals, including two successfully commissioned gold plants. If there's a new gold boom imminent, as i believe, SDM would have been set.
Soon, as a last gasp, Sedgman will be paying *another* special dividend in addition to the H1 fy16 interim dividend.


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## System (16 April 2016)

On April 15th, 2016, Sedgman Limited (SDM) was removed from the ASX's official list in accordance with Listing Rule 17.11, following confirmation that the compulsory acquisition of all the Company's securities by CIMIC Group Investments Pty Limited has completed.


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