MAH - Macmahon Holdings

[RichKid]

Mentioned this ealier in the breakouts thread, has pulled back now to restest resistance/support. A classic set up in my view is either here or approaching (ie the swing low retest on low volume). Once that support level around 61c is reestablished I expect the next stop to be the all time highs.

This stock is one of those smaller niche companies that have exposure to the resources boom imo so I like it long term.

Just my views, as shown in charts, not advice of any kind.

 

[RichKid]

Re: MAH Macmahon Holdings

I just picked this for the tipping comp, based on the powerful trend, lack of any strong overhead resistance and higher swings, finished a bit stronger than I expected so it wasn't the lowest entry price but if it starts the uptrend soon that wont matter at all.

I forgot to explain that the breakout bar was on the day a new contract win was announced (won contract over some big name ASX listed companies too so MAH is quality imo), then a lot of shares were dumped (ie sell on the fact), that has now subsided as the vol has decreased now and buy depth has stabilised again, as the equlibrium shifts we should be bullish again, I did expect a further fall to test that support line but the fact that it is holding above it suggest strength, early days yet but let's see.....any other holders or watchers out there?

 

[RichKid]

Re: MAH Macmahon Holdings

This is from the Telegraph tipster, I was doing a bit of research.

Tipping Point
Sunday Telegraph (Sydney, Australia)
November 27, 2005
Author: Compiled by Anthony Black

STEFAN WHITING
ABN AMRO MORGANS

HOLD:

MACMAHON HOLDINGS (MAH) $59.5

MACMAHON is a specialist mining and civil engineering contractor. Management has tuned the company for growth. Although the price has risen, we see upside from the best conditions in mining and infrastructure for 20 years. Hold or keep accumulating.

 

[Kipp]

Re: MAH Macmahon Holdings

Hi Richkid,
I've taken an interest in MAH since you pointed it out as a potential breakout. They have done pretty well over last couple of years (from fin reports '04 and '05) do you think they can replicate their 69% after tax profit growth in '06? Certainly revenue is still growing strongly in late '05.

By my figures- at 61c their current P.E ratio is 11-12 (it is really annoying that the ASX doesn't list P.E's on their website... grrr) but I'm not sure how this compares to the rest of the construction industry.

Do you still feel a breakout is on the way?
Thanks,

Kipp.

 

[RichKid]

Re: MAH Macmahon Holdings

Hi Richkid,
I've taken an interest in MAH since you pointed it out as a potential breakout. They have done pretty well over last couple of years (from fin reports '04 and '05) do you think they can replicate their 69% after tax profit growth in '06? Certainly revenue is still growing strongly in late '05.

By my figures- at 61c their current P.E ratio is 11-12 (it is really annoying that the ASX doesn't list P.E's on their website... grrr) but I'm not sure how this compares to the rest of the construction industry.

Do you still feel a breakout is on the way?
Thanks,

Kipp.

Hi Kipp,
Oops, haven't updated this, I was stopped out as the breakout I traded failed (almost instantly- so much for the textbook pattern!). There seems to be some supply around these recent highs so I'm not entering again yet- a lot of holders seem to sell into the strength created by anncts.

Don't know much about the specifics of the fundamentals, mainly trading the chart atm but I like it longterm. Hard to say where it'll go so please don't lose your hard earned on my dud speccies! I'd like to see if it retests earlier support/resistance levels....just watching atm for a clearer pattern.

 

[Kipp]

Re: MAH Macmahon Holdings

Thanks Richo,
I have some questions that will make me look every bit the beginner I am...
firstly, what are the anncts?
and secondly, where can you find the supply/demand levels for a stock that you quoted? A few other posts have mentioned big trades (i.e. sale of 2.5 million shares by one trader) is this listed on the asx website somewhere?

Thanks,
Kipp

 

[RichKid]

Re: MAH Macmahon Holdings

Thanks Richo,
I have some questions that will make me look every bit the beginner I am...
firstly, what are the anncts?
and secondly, where can you find the supply/demand levels for a stock that you quoted? A few other posts have mentioned big trades (i.e. sale of 2.5 million shares by one trader) is this listed on the asx website somewhere?

Thanks,
Kipp

Hi Kipp,
No probs. The anncts were about the company winning some contracts. If you go to www.asx.com.au you can look up anncts by company. Compare the date of the annct to the price chart and you will see a pattern, a brief spike and then decline. This is sometimes described as "buy the rumour sell the fact" (ie some ppl (insiders) get advance info on the annct b4 it's released and buy in at lower prices, they then sell after the annct as new ppl buy in on the 'good' news- the sellers overwhelm the buyers and the price drops- doesn't always happen like that and some stocks do the opposite).

The supply demand (buy/sell) levels (market depth) can be found at (For example) www.fatprophets.com.au but it's delayed by about 30min (ie not live prices/figures) and only has the top level of bids and offers, it also has trades by parcel size and price; also try www.morrisonsecurities.com.au (there is a link to a trial version of their charting programme, I think that has depth, but just check).

Hope this helps, I think you should browse throug the beginners forum topics and do some searches on keywords (eg 'market depth') to get some background info on basic terms, it'll really help, questions always welcome but search to see if they've been answered before.

Please don't take any of my comments as advice or tips as I'm not qualified to give financial advice.

Good luck!

 

[RichKid]

Re: MAH Macmahon Holdings

I've posted a screenshot of a live market depth screen from Comsec ProTrader, I've expanded one price level to show all 10 orders at that price, you can see there's quite a bit of supply to overcome before prices move higher. Also remember that not all orders are shown on screen, they don't just sit there, someone may decide to sell or buy a large parcel without just leaving it in the queue; especially with bigger stocks or trades that may occur off market.

 

[Kipp]

Re: MAH Macmahon Holdings

Richo I think you are a better stock picker than you give yourself credit for... SP up to 65.5 today. But I'm now apprehensive to get in... cause I am superstitious about buying stocks that have just had a big jump. But charts aside, this looks like a good company with good growth prospects. I'll get in if it drops below 60 (which I can't see happening).

 

[RichKid]

Re: MAH Macmahon Holdings

Richo I think you are a better stock picker than you give yourself credit for... SP up to 65.5 today. But I'm now apprehensive to get in... cause I am superstitious about buying stocks that have just had a big jump. But charts aside, this looks like a good company with good growth prospects. I'll get in if it drops below 60 (which I can't see happening).

Hi Kipp,
If only I could trade them properly! Maybe people should buy as soon as I get stopped out!

I think my issue here is psychological, I could have had another stab last month at MAH after those candle tails rejected lower prices but I froze up and waited. I'm waiting again for a retest further down from the current level- something which may not occur, oh well, another low risk set up is probably just around the corner.....hate missing this one though!

 

[RichKid]

Re: MAH Macmahon Holdings

Emmm, not so confident about this now, still a very strong uptrend overall but no reason to enter yet. Sellers pushing this down now....knowing my timing this stock will probably turn around when I least expect it...I don't trust the buy depth as much as I did before for this stock.

 

[Kipp]

Bought in at 61c just over a week ago... happy days!
Looks like SP could return down to 65 or so....

 

[Sean K]

MAH has been a very solid performer over the past 3 years supported by the commodities boom. If you think the 'stronger for longer, labour squeeze, equipment shortages,' is going to be around for a bit longer, then these guys are worth a look at.

Plus as discussed in the Merger/Takeover Thread, they've been touted as a possible takeover target for one of the larger players: take your pick.

I picked up a few around .70c, looking for a break through .90 to head higher for longer.....

Good short and long term chart imo. 2 year and 6 mth charts below:

 

[Kipp]

Ah... kennas, welcome to the thread! (Has just been me and Richo for a while... though I don't think he ever bought in.)

Interesting to see if MAH can continue it's awesome profit growth of ~50% the last couple of years... given lastest action, I think the market is anticipating postive finanicals once more.

Shame you weren't around to talk me out of selling in April (77) switched over to MAP... great decision

 

[stiger]

Ah... kennas, welcome to the thread! (Has just been me and Richo for a while... though I don't think he ever bought in.)

Interesting to see if MAH can continue it's awesome profit growth of ~50% the last couple of years... given lastest action, I think the market is anticipating postive finanicals once more.

Shame you weren't around to talk me out of selling in April (77) switched over to MAP... great decision

Kipp rule 1, when you invest in shares you are in competition with every one else that has them in the same mob. Take no prisoners.

 

[Kipp]

Kipp rule 1, when you invest in shares you are in competition with every one else that has them in the same mob. Take no prisoners.

Hey... I was just having a quiet whinge, nothing more...
my first year on the ASX ha has some good decisions and some less good ones. I still rode MAH from 61 to 77. And actaully made money with MAP twice, just got lucky buying in the $3 dips. But as a long term prospect I think MAH has it in spades.

But if you're objection is to that of pointless whinging on the ASF---- then I get it. It's a wasted thread, but it does of course provide some solace for those in the same boat (i.e. CAZ 3 months ago etc).

 

[Sean K]

MAH acquires specialist underground mining services group operating as ARD and CRE with debt and cash and to have revenue of $55m in FY 2007 and be EPS eccretive.

This purchase should add yet further potential for MAH to add to it's already huge contract book.

I've thought this company to be a takeover target by WOR, UGL or DOW, but perhaps they'll be able to buy DOW soon???!!

 

[Kipp]

Think a good buying opportunity may have just passed. SP slid to intradays lows of 78.5 yesterday and again today before closing at 81.5.
There wasn't much free cash for me to jump back in though, so let the opportunity go. But it may come around again.

Reading the MAH annual report- another growth year of 30% in profits does not look unachieveable, given that their current book value at June 30(contracts awarded) is ~1.2 bill (compared to 900m in 2005). And revenue is forecast at approx 1-1.1 bill (up from 864 in FY06). Possibly this is conservative as MacMahon has added ~370 mill of new projects in the New FY (including the Mitchell Freeway extenstion in Perth- announced last week)

$87 mill in cash, but $160mill in Debt (which is slightly worrying deby equity ratio when compared to $170m Equity!)
I suppose it has been necessary to accumulate so much debt in order to grow at the rate they have in the past few years?

Great company. IN the growth state (WA), and considerably diversified enough to survive a meltdown in the mining industry (but not without a few scars)

In spite of the above ramp- I don't hold MAH (I just hold them in high regard)

 

[michael_selway]

Hey... I was just having a quiet whinge, nothing more...
my first year on the ASX ha has some good decisions and some less good ones. I still rode MAH from 61 to 77. And actaully made money with MAP twice, just got lucky buying in the $3 dips. But as a long term prospect I think MAH has it in spades.

But if you're objection is to that of pointless whinging on the ASF---- then I get it. It's a wasted thread, but it does of course provide some solace for those in the same boat (i.e. CAZ 3 months ago etc).

MAH aint bad, and ist up there with WOR, UGL, DOW, MND etc

MAH - Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 5.4 6.7 8.5 9.4
DPS 2.0 2.8 3.5 3.8

MND - Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 35.2 44.4 54.7 51.0
DPS 33.0 35.0 32.7 25.3


thx

MS

 

[Kipp]

MS- you are TOTALLY in love with Commsec aren't you? I have just signed up with them - and can't wait to start trading with them (previous broker Avcol- cheap and but no frills at all, incl stop losses).

How accurate have you found their EPS forecasts so far? I mean revising ZFX to 2.20 in June isn't the same as calling it last Nov. And I remember thinking that the MAP EPS that you posted was a long way off too... maybe I'll go to the old MAP thread and suss out their forecasts- and see how tey compared to the end result.

And I think it's a bit unfair to be comparing DOW to MAH, maybe Mondphelous (spelling) or Leighton holdings, but DOW s doing it tough.