DCG - Decmil Group

[VSntchr]

NPAT came out alot lower than what alot of people in this thread had expected. Even a little lower than what I had penned down.

Number of workers has gone down by about 40% from 900something to 500something...a big concern seeing as in WA the skills shortage is getting extreme (from what I've heard). This could really be a problem if they have to hire quickly (paying exuberant amounts).

I heard on the business channel a few weeks back that some of the big companies were even putting workers on a year in advance of them actually being required..just to ensure they had them when they needed them!!

 

[McCoy Pauley]

DCG being hammered early. Down almost 6% in the first few minutes of trading. Investors not happy with the report.

 

[skc]

Probably a bit of nervousness ahead of their full year results. Anyone who bought in since the HY result are pretty much underwater.

The old saying "It's falling so market must know something" tends to scare plenty of people away.

Yup the market did know something. I have no idea how it knows what it knows.

There are no shortage of examples where the market is totally stupid. At the same time, examples like these show how smart the market can be.

The learning never ends...

 

[Noddy]

DCG have produced record results.
Revenue up 20%
NPAT up 24%
EPS 18.9cp
CASH ON HAND $64 mil
ROE 20%
Strong order book
Maiden dividend 6cps.

What's not to like, yet the price has fallen nearly 10% today.
Hard to understand ?

 

[skc]

DCG have produced record results.
Revenue up 20%
NPAT up 24%
EPS 18.9cp
CASH ON HAND $64 mil
ROE 20%
Strong order book
Maiden dividend 6cps.

What's not to like, yet the price has fallen nearly 10% today.
Hard to understand ?

Share price falling doesn't mean the company is not doing well. It can also mean that the share price was too high before.

If you look at their 2nd half numbers they were substantially weaker than first half. e.g. Full year NPAT $23.5m, HY NPAT $14.2m, which means H2 was only $9.3m.

If they have little or no growth, a PE ~10-12 would be a fair price. Based on their EPS ~18.9c that's $1.89 to $2.25. But chances are, because of the weak H2 figures, market is saying rolling 12month EPS of 15c @ PE 12 ~$1.9.

The current share price is only an opportunity if they re-gain momentum to grow EPS...

For a strong result and market's reaction to it, look at IDL.

 

[drlog]

Share price falling doesn't mean the company is not doing well. It can also mean that the share price was too high before.

If you look at their 2nd half numbers they were substantially weaker than first half. e.g. Full year NPAT $23.5m, HY NPAT $14.2m, which means H2 was only $9.3m.

If they have little or no growth, a PE ~10-12 would be a fair price. Based on their EPS ~18.9c that's $1.89 to $2.25. But chances are, because of the weak H2 figures, market is saying rolling 12month EPS of 15c @ PE 12 ~$1.9.

The current share price is only an opportunity if they re-gain momentum to grow EPS...

For a strong result and market's reaction to it, look at IDL.

You make some excellent points. The order book is currently at 300mil with a further 670mil tendered and 3bn potential. I think growth will continue in at least the medium term.

ROE did fall as did operating cash flow - something to keep our eyes on.

Like you stated before, the number of employees were reduced due to ramp updelays - does anyone have insights on that? Perhaps it means more aggressive future growth IF they are able to find more staff at the right time.

All in all, I think the market has undervalued DCG - I think they are worth at least $2 so I will continue holding.

 

[tinhat]

Wow, I really wish I had bought some more DCG when the price was trading around $2 late last year.

I wonder what price targets people have for DCG? I'm thinking $3.30 would be a good run (which is also around consensus). That would also represent a PE of 12 based on consensus forecasts of EPS of 27.20 for 2013. My problem is letting profits run though. I got stung last year by not taking profits and sticking to stop losses so I've been a bit shy this year and have sold out early in the run-up on a couple of stocks only to see them climb further in recent weeks.

On the charts the 200 day MA is only just turning up.

I've got a lot of stocks in my portfolio that are nearing their 2011 highs and it's making me nervous!

 

[tinhat]

DCG share price up 10% today on the announcement that they are buying the remaining 50% of the Gladstone accommodation joint venture. I don't know what the analysis of the deal is, but there is some expectation that this could be a good income producer over the medium term.

 

[tinhat]

DCG is getting hammered today with some bigger volume going through after the bell. I wonder if there is something I don't know about going on.

 

[Boggo]

DCG is getting hammered today with some bigger volume going through after the bell. I wonder if there is something I don't know about going on.

Not sure what happened there tinny, I was long at 2.63 but stopped out at 2.70 today (held 6000, not 9250 as indicated below).
Was heading nicely towards target but something spooked it.

 

[Country Lad]

A little double bottom.

Cheers
Country Lad

 

[skc]

A little double bottom.

Cheers
Country Lad

The only stock in the sector that's showing some sign of strength at the moment.

 

[Country Lad]

The only stock in the sector that's showing some sign of strength at the moment.

A bit more strength.

Cheers
Country Lad

 

[skyQuake]

Great moves today off that back of that contract.
Was hoping to add some at 1.70 but looks like it won't see there for a while

 

[pixel]

Great moves today off that back of that contract.
Was hoping to add some at 1.70 but looks like it won't see there for a while

That was indeed a nice move; unfortunately, not for long.
Will it bounce this time and regain old heights? Or was today's rise simply a follow-the-leader of the other mining support companies?



Coming off my scan, I added it to my watchlist; didn't buy yet because I already hold ASL and WOR. But if the break is confirmed, I see potential for a bigger rise - possibly 50% or more; check the roles that historic Fibonacci levels have played over the last 2 years.

 

[piggybank]

 

[pixel]

Seems to be finding support at 50% of December range.
If candle looks this way at Close, I'll get back in.

 

[Cam019]

Almost textbook markdown and accumulation phases on the 5 year daily chart. Watch for the markup phase with a break >$1.45.

Disclosure: I hold.

 

[peter2]

It's been two years since the last post on DCG. For good reason, the price has dropped from 1.45 to below 0.70. It bounced off the longer term support line at 0.65 but has struggled to get moving since then.
I bought a position earlier in the year after a bullish weekly bar and had plans to add when price got above 1.00. Price never got moving higher, instead it just ambled sideways. This is an example where a stale exit may have helped prevent a loss. (Note to self).

DCG recently reported some problems with it's almost completed Sunraysia Solar project (NSW).
Price fell substantially indicating to me that the problem is a bit more serious than the announcement states. I swallowed the slightly larger than planned loss when price closed well below my exit trigger.

Price continued to fall on increasing volume and is now at the longer term support level. Now I'm pleased with my exit.

Another market update today with more disappointing news. Someone (last weeks high volume seller) knew what was coming. Price fell another 30% today.

The management team at DCG have lots to do but I doubt their ability to do it. They've been struggling with the business since 2011.

 

[Miner]

It's been two years since the last post on DCG. For good reason, the price has dropped from 1.45 to below 0.70. It bounced off the longer term support line at 0.65 but has struggled to get moving since then. (Do not understand how to call 65 cents was a support level if the prices have dwindled by more than 34 % today )
I bought a position earlier in the year after a bullish weekly bar and had plans to add when price got above 1.00. Price never got moving higher, instead it just ambled sideways. This is an example where a stale exit may have helped prevent a loss. (Note to self).

DCG recently reported some problems with it's almost completed Sunraysia Solar project (NSW).
Price fell substantially indicating to me that the problem is a bit more serious than the announcement states. I swallowed the slightly larger than planned loss when price closed well below my exit trigger. (Pete- out of interest. If a guru like incurs loss what was the root cause then ? Assumptions were wrong or company provided too ambitious forecasting? What the charts said then? )

Price continued to fall on increasing volume and is now at the longer term support level. Now I'm pleased with my exit. (Pete - did not understand if the price is at longer term support level today. You could be happy with your exit without incurring further loss should have waited long is understandable howver.)

Another market update today with more disappointing news. Someone (last weeks high volume seller) knew what was coming. Price fell another 30% today.

The management team at DCG have lots to do but I doubt their ability to do it. They've been struggling with the business since 2011.

View attachment 99227

Hi Pete
Greetings for a Merry Christmas and all the best for 2020.
I read your posting few times and you being a real well wisher for all of us on ASF, do you mind asking some queries to get more understanding.
I have highlighted next to your posting. Not rude - but saves writing twice .
I also read mid week alert from a paid newsletter, which has recommended DCG a buy today after the crash. I am not suggesting they are right as often newsletters pump share prices when they do have a managed fund invested on those shares.
Personally, I read the financials and even the price could down by another 4-5% tomorrow, with CY ending, I do believe DCG could be a good case to watch (this is not what you have said. I will take your analysis is far superior).
Looking back, was surprised to see in 2009, I started this thread .
Nonetheless, here is the extract, within copyright provision:
-
xxx today’s market reaction is excessive, but this may also come back to the fact the company only recently announced issues with respect to the Sunraysia solar farm project. Again, these are not expected to have a material impact on earnings, but have a cash impact. With the latest update coming soon after that announcement (12th December), investors have perhaps become wary.

Nonetheless they believe the investment case for Decmil is a strong one, and even more so at current share price levels. xxxxx to see director buying in the wake of this morning’s share price weakness.

xx recommend Decmil Group as a buy xxx without exposure.