Australian (ASX) Stock Market Forum

FGE - Forge Group

I sold out of my fge today, looks like its running out off puff. Hopefully pick it back up around the $4.50 to $4.80 mark.
 
I sold out of my fge today, looks like its running out off puff. Hopefully pick it back up around the $4.50 to $4.80 mark.

Oh boy I don't think I could have been more wrong, FGE has smashed threw resistance at $5.50 and is having a bumper day.
 
Results out soon and with MNDs announcement things are looking positive for FGE....

Yes I think most mining services firm should produce pretty good results. MND, NWH, ASL, BLY, IMD, MAH and even LEI all released good/better profit guidences. This list is just off the top of my head.

Having said that FGE should be releasing an update around now if the result was to deviate too much from earlier guidence.
 
Very busy day today but in the quick glance i had of the report...I noticed FGE's order book is now $1.2 BILLION!!!
 
Very busy day today but in the quick glance i had of the report...I noticed FGE's order book is now $1.2 BILLION!!!

Rising costs means that a 10% increase in revenue resulted in 0% increase in net profit.

Interesting to read that cash receipt this period is only 67% of revenue (as opposed to 113% pcp), yet cash payments is only 50% of revenue (as opposed to 97% pcp).

Neither of these numbers feel sustainable.
 
Very busy day today but in the quick glance i had of the report...I noticed FGE's order book is now $1.2 BILLION!!!

Yes, well the market doesn't like it very much...I guess it's the flat NPAT that is the issue? I agree with you though, I think the market is wrong in this case! An enormous order book.
 
I've been dollar averaging down the past two weeks and I'm completely out of FGE now. I really like this company. Maybe on this current upswing it will get over $7. Let's hope so. I have to take some money off the table at the moment so am happy to step off and take my profits at this stage. I might jump back in again in the future when there is an opportunity to do so.
 
FGE and all other mining service type stocks are linked ultimately to the demand for mining products. Iron, copper, etc.

If economies overseas are going to buy less metals for construction, there will be less mining and therefore less work for the likes of FGE.

Am I right?

So then the only reason someone would buy FGE now would be that they think the mining industry and the demand for it's products will grow significantly in the future.

However, with the Australian economy slowing, China slowing and other big purchases of Australias mining products slowing, would it be a wise move to stay out of mining in general and go to an industry that will always be in need, even if economies are at a stand still (food, toothpaste, etc)
 
Does anyone have any view (fundamental or technical) on FGE's big slide since ENP's last post in late April?

The news announcements have only been good ones. The other 2 theories are that it's having indigestion from its recent CTEC acquisition, or a million sellers viewed ENP's last post above:rolleyes:
 
I think its a combination of the whole market getting hammered today and monday along with people weighing up the balance of FGE being a great position now vs where will FGE be in 5-10 years time when mining investment is thought to slow considerably.

Theres been some interesting articles all over the place recently regarding mining services companies and they've all varied from bearish to bullish. I think a lot depends on your time-frame and the direction you think FGE will take in the next 5-10 years. This also includes where you think mining investment is heading.

My view is FGE is a great company poised to make lots of money in the next 2-5 years or more but its a timeframe longer than that which can become of concern. So on a fundamentals basis when it next bottoms and reverses could be a good entry point if you have a 2-5 year investment timeframe.
 
My view is FGE is a great company poised to make lots of money in the next 2-5 years or more but its a timeframe longer than that which can become of concern. So on a fundamentals basis when it next bottoms and reverses could be a good entry point if you have a 2-5 year investment timeframe.

Mining services are exemplary cyclical stocks but I think the cycles are much quicker these days. There'd probably be a low in the next 2-5 years imo.

When the mining investment tap is turned off all mining services will drop like stones - the same as in 2008. Those that run mines are probably less affected than those building new mines. There is a small natural hedge however in that input costs, particularly labour salary, will fall as well... but it won't be pretty.
 
For anyone bearish on mining and by extension mining services, you might find sobering this presentation by BHP on its long term outlook to the extent that it applies to iron ore: http://www.bhpbilliton.com/home/investors/reports/Documents/2012/120320_AJMConference.pdf

One theme that emerges from the presentation is that, contrary to popular perception, China still lags the USA (as the model developed economy) on important development comparables. For instance, China is still overwhelmingly a rural society with less than half its population living in urban areas. That is predicted to rise to over 60% of the population living in urban areas by 2030. Similarly, car penetration in China in 2010 per 1000 of the population was equivalent to that of the USA in 1916. In short, China would appear to still have a long way to go before it looks like the US, Australia or Europe.

BHP is optimistic about resource demand because it takes such a long term view. The case that it makes for that demand's steady rise is nevertheless pretty compelling.
 
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