SDM - Sedgman Limited
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blinkau said:
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 - Joined
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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 ?
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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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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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.
I shall never be rich.
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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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Watch this space. Stock is cheap on fundamentals.
McCoy Pauley
Get out of here Budweiser!
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Appreciate the sentiment. But why do you think the company is cheap on its fundamentals?
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So_Cynical
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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.
skc
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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.
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?
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?
Actually, looks like the prelim report is coming out Thursday... Bell Direct says 20th, but a recent notice SDM put out says 23rd.
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).
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).
So_Cynical
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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.
oh well in for the long haul.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
...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
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.
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.
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.
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.
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
Still holding SC? I am considering this one.
Regards
Rick
So_Cynical
The Contrarian Averager
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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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