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LYL - Lycopodium Limited

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mike85

mike85

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hey guys,
have been watching this mob for a while now, does anyone here hold or have any thoughts about LYL?

thanks,
mike
 
How about an overview for us Mike?

Technical, fundamental, co structure, projects etc etc

Just a bit of background to get a few people interested.
 
sorry Prawn, pretty new to this :eek:
Basically LYL is an engineering consultancy firm based in aus, with offices in the Philippines.
they have a market cap of $152m and a P/E ratio of 13.2
on a few occasions i have seen buy recommendations for this stock in various media sources.
they have also just announced a profit forecast increase for 07/08, an increase of 12.7% of after-tax profit.
i dont really know much else about the company other than that...
can anyone help me out here lol?!?
 
mike85 said:
sorry Prawn, pretty new to this :eek:
Basically LYL is an engineering consultancy firm based in aus, with offices in the Philippines.
they have a market cap of $152m and a P/E ratio of 13.2
on a few occasions i have seen buy recommendations for this stock in various media sources.
they have also just announced a profit forecast increase for 07/08, an increase of 12.7% of after-tax profit.
i dont really know much else about the company other than that...
can anyone help me out here lol?!?
Click to expand...

Hi its not too bad :), but nearly all engo firms are out of flavoru atm

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 23.5 30.5 35.8 40.1
DPS 17.5 20.0 25.3 28.0

LYL.jpg


Business Description
Lycopodium Limited (LYL) is an Australian based engineering consultancy with offices nationally in Perth, Sydney and Melbourne and internationally in Accra, Ghana and Manila in the Philippines. Through its wholly owned subsidiaries, Lycopodium Engineering Pty Ltd and Process Design & Fabrication Pty Ltd, the Company services process industries including mining, mineral processing, pharmaceutical, chemical, food and automotive whilst Orway Mineral Consultants (WA) Pty Ltd provides specialist services to the minerals resource industry, principally in the field of comminution. LYL specializes in engineering, procurement and construction management (EPCM) type contracts, providing a complete service to its clients from feasibility study through process development & construction management to Implementation.
Click to expand...
 
it's up over 10% today. not many sellers on this stock so seems tightly held. will continue to hold as it has managed to stay up ok over the last few months.
 
Well... last post in July and this was trading at the $4 mark or so.
Jumped on today at $1.33. Am thinking that it's taken enough of a dive so now's a good time to jump on.
Wish me luck guys!
 
I own this one as a keeper and love it....
It pays me over 18% on my buy price 100% franked

it pays a split dividend with the 20c one in October and a 5c div in mar or april

It has an ROE of approx 30% and 0% net debt to eq.

I have several subscriptions to valuations and the average valuation at present is approx $2.40 to $2.50 ish.....

I ran the numbers myself and come out with $2.43.....about a week ago... with a required return of 15% if your willing to accept 12% it seems like good value on fundamentals at present. Personally im hoping the price falls a bit further so I can snap some more up at 20% + fully franked div...
 
Anybody still holding this stock? Seems to be trading at very low multiples and no debt
 
condog said:
I own this one as a keeper and love it....
It pays me over 18% on my buy price 100% franked

it pays a split dividend with the 20c one in October and a 5c div in mar or april

It has an ROE of approx 30% and 0% net debt to eq.

I have several subscriptions to valuations and the average valuation at present is approx $2.40 to $2.50 ish.....

I ran the numbers myself and come out with $2.43.....about a week ago... with a required return of 15% if your willing to accept 12% it seems like good value on fundamentals at present. Personally, im hoping the price falls a bit further so I can snap some more up at 20% + fully franked div...
Click to expand...
OMG. since 2009 , after 8 years the posting comes. It tells how popular this share is. Gone are the peak times still no interest on Lyco. That tells the story of this company.
Since depressing time LYCO has almost sacked many good people, kept on advertising for jobs with no projects in hand, lot people either are on dole or working in RCR, BHPB, MSP Engineering projects. The company is managed by eloquent speaking mediocre engineers. They are trying to buy the jobs but client side also getting clever.
DNH . Do not want to put money on it unless some turnaround happens. Some work in Canada and Africa. This is one of the companies I will never work. So why should I put money on them ?
 
Miner said:
OMG. since 2009 , after 8 years the posting comes. It tells how popular this share is. Gone are the peak times still no interest on Lyco. That tells the story of this company.
Since depressing time LYCO has almost sacked many good people, kept on advertising for jobs with no projects in hand, lot people either are on dole or working in RCR, BHPB, MSP Engineering projects. The company is managed by eloquent speaking mediocre engineers. They are trying to buy the jobs but client side also getting clever.
DNH . Do not want to put money on it unless some turnaround happens. Some work in Canada and Africa. This is one of the companies I will never work. So why should I put money on them ?
Click to expand...

Interesting.. did you used to work for this company before?? Care to elaborate more??

I bought few months ago around $3 at the high and since then it hasn't moved, I was only looking at the financials, didn't know anything qualitative about the company, it has an incredibly strong balance sheet and trading very low multiples with record cashflow, it was the cheapest infrastructure stock I could find at the time. Perhaps I should've done more research..

Unpopularity is a good thing though, never a bad idea to invest in stocks other people don't like. What do you mean by "since depressing time"?? Sounds like you know this industry a lot, which other companies do think is managed well?
 
Miner said:
OMG. since 2009 , after 8 years the posting comes. It tells how popular this share is. Gone are the peak times still no interest on Lyco. That tells the story of this company.
Since depressing time LYCO has almost sacked many good people, kept on advertising for jobs with no projects in hand, lot people either are on dole or working in RCR, BHPB, MSP Engineering projects. The company is managed by eloquent speaking mediocre engineers. They are trying to buy the jobs but client side also getting clever.
DNH . Do not want to put money on it unless some turnaround happens. Some work in Canada and Africa. This is one of the companies I will never work. So why should I put money on them ?
Click to expand...

In addition to what you said, another concern is two founding partners has been selling their shares in last few months, however the market has absorbed this selling pressure well and price has held firm, so it could be just profit taking.. Very low volume now but I'm watching very closely to see which way the price is gonna go when momentum picks up..
 
along with Monadelphous (MND) at 60%, Lycopodium has a 40% share in Mondium, an engineering, procurement and construction (EPC) company formed to target and deliver EPC projects in the minerals processing sector ...

Just picked up a $400mill contract with Rio, for the design and construction of another Pilbara project, the Western Turner Syncline Phase 2 mine.

Good synergistic elements for 2 WA contractors, that can share skill sets. (trouble with contracts is that they are short term; gotta keep winning 'em)
 
LYL
Lycopodium is trading at about 2x book value now and the all time monthly chart below suggests to me that it could be launched on one of its big cyclical downswings. It could become an excellent dividend buy as it corrects very hard in spite of several good qualities. It's price has become absurdly cheap twice before.

  • It slowly grows its book value over a decade
  • Very low increase in shares issued over a decade
  • It can be a high ROE stock during boom years (mid thirties ROE)
  • Almost zero LT debt
  • It always keeps a big wad of cash in reserve.
  • Pays a very good and mostly reliable yield
  • Excellent operator.
  • Just one thing it does - it builds gold plants.
  • It is a close collaborator with Monadelphous, the El Kabong of engineering service companies.

ROE was ~21% in fy19 and has ranged from 16% to 25% over last three years. If it were not for the unquantifiable impact of cv19 my crude valuation method would put it at maybe twice the current price.

Chart: price peeking below downturning monthly Bollinger Band which is a made up signal I use to step back and if there is a monthly close below $4 on higher volume I will be more convinced poor ol LYL's on the skids.

LYL All Data MTHLY
big (30).gif
 
While I agree with the sentiments (and bullet points), I'm not sure if LYL is cheap, if only for the reason that travel restrictions, state border closures and the like, are going to severely impact the ability to use workforces effectively. FIFO is in turmoil, as you'd expect. The two person rule for physical separation will make worksite practices untenable. Anything other than absolutely necessary work intervention will be slowed.

But LYL ( and El Kabong) should come out of hibernation roaring to go. And definitely the two companies travel in lockstep, (LYL purple, MND in Blue)


upload_2020-3-30_13-28-30.png
 
2 person limit doesnt apply to workplaces, most mine sites have been deemed essential services and FIFO workers allowed to continue. Rio just flew 55 FIFO sub contractors into our town - a declared Aboriginal Community hub, for anyone else to get here they need to isolate in Darwin for 14 days, get clearance from Land Council & Biosecurity before being let on the plane, then 14 days isolation when they arrive. FIFO workers, come on down!

I like LYL, will look to build a position if they get down to my buy zone.
 
Dona Ferentes said:
I'm not sure if LYL is cheap, if only for the reason that travel restrictions, state border closures and the like, are going to severely impact the ability to use workforces effectively. FIFO is in turmoil, as you'd expect. The two person rule for physical separation will make worksite practices untenable. Anything other than absolutely necessary work intervention will be slowed.
Click to expand...

Agree and I think this is what might well be behind LYL possibly getting fundamentally very cheap if thinking of the long term. Two dollars or even one dollar per share is possible going on the s.p ravages from past negative sentiment. It's also a low volume stock which helps a patient accumulator. In the past, the price chart has given plenty of time and signals to get in near the low - not a V shaped reversal stock.

Sentiment's just a wait and watch for me.
 
Dona Ferentes said:
The rest will follow
Click to expand...

Maybe, maybe not the NT.

I do think there will be opportunity to pick it up at a lower price, no way is all the bad news priced in yet, just have to not be too greedy! In the long term LYL looks pretty well priced already.
 

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