MAH - Macmahon Holdings

[RichKid]

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:

Nice charts Kennas, I haven't checked MAH since your post of a few weeks ago but this looks like a wave 4 in EW speak, if it moves into a wave 5 I can't see it going beyond the all time highs, unless we see some sort of extension. This recent ranging move would offer a good entry around 70/75c if it drops that far but I guess I'll have to look at the latest chart to confirm.

 

[Kipp]

Kennas,
what is going on here with MAH? Nothing but positive announcements over the last couple of weeks (i.e. Mitchell HWY and Diamond Mine contracts both worth over $100 M each) but share price having a bit of a dip. What am I missing here? Granted it did go Ex Dividend but that can't explain all of the fall.
Seems to be pretty good support in the 74-75 range in the 6 month chart. So I think it's time I bought a few. What do you make of it?

The 4th in a row my stock tip has crumbled... I'm really not holding up well at all in the comp...
Hope you had a bit of a ride on EVE...
Kipp

 

[watsonc]

All resource stocks took a bit of a hit recently, MAH business is linked to the resource sector - hence the unusual downfall in share price.

 

[Sean K]

Kennas,
what is going on here with MAH? Nothing but positive announcements over the last couple of weeks (i.e. Mitchell HWY and Diamond Mine contracts both worth over $100 M each) but share price having a bit of a dip. What am I missing here? Granted it did go Ex Dividend but that can't explain all of the fall.
Seems to be pretty good support in the 74-75 range in the 6 month chart. So I think it's time I bought a few. What do you make of it?

The 4th in a row my stock tip has crumbled... I'm really not holding up well at all in the comp...
Hope you had a bit of a ride on EVE...
Kipp

I agree that its linked to the general resource correction last week. Should find support between $0.70 and $0.75.

I'm still stronger for longer with resources with China driving demand, but becomming more sceptical. Not buying anything but gold and uranium atm, or topping up on things that I think are oversold. Don't think MAH is into that zone yet. Still good 1-2 year chart, just taking a breather along with the other resource linked companies perhaps. Management keep winning good contracts that will drive returns medium to long term.

Risk still is US recession/hard landing knocking China.

 

[Sean K]

MAH has found some support at $0.75, but looks to have dipped out of it's 1 year trend channel. Is hitting 200d ma which should give it support though. Perhaps that's why it's hovering at $0.75 atm.

If it doesn't find some traction, then it could be on the slide for a while. Negative action probably just due to commodities market atm, but if you've not a long term horizon on this, be wary. I'm long on this, as I see more upside in this as an individual stock compared to sector. I'm still stronger for longer on Chindia, so prepared for the short term drift sideways.

 

[Kipp]

MAH has found some support at $0.75, but looks to have dipped out of it's 1 year trend channel. Is hitting 200d ma which should give it support though. Perhaps that's why it's hovering at $0.75 atm.

If it doesn't find some traction, then it could be on the slide for a while. Negative action probably just due to commodities market atm, but if you've not a long term horizon on this, be wary. I'm long on this, as I see more upside in this as an individual stock compared to sector. I'm still stronger for longer on Chindia, so prepared for the short term drift sideways.

Kennas, I;m sure I don't need to remind you- but a fair bit of MAH's Order book comes from outside the resources sector (Mitchell Freeway extension etc). <50% from Mining. So I don't think MAH will fall to pieces with commodities come off the boil.

Unless...
you take the view that some portion of it's contracts fall through as "bad debts" from 2-bit mining companies when Zn, Cu etc return to historical levels. And suddenly MAH has 40mill of unrecoverable debt for FY07... and then it's you remember that their profit margins are only 5%... so that it would require $800M of revenue to generate 40 mill of profit.... eeek!!

Sorry- I am being a fool. It's just that margins aren't all that wide in Construction (through to the MAH management's credit, their margins have INCREASED in FY06 from 4 to 5.2%... despite cost pressures in the industry).

And well, as for my little bad debts scenario. MAH seems to have some pretty secure clients. BHP, WA government, (and lastly KIM, don't know much about them though)... so it's a pretty unlikely scenario. Yet there were probably a few MAH equivalents who got burnt when Pasminco went into liquidation (though I don't know the details there so well).

Anyhow... I didn't get my order filled at 75 cents... pretty stupid of me really, cause 76cents would of only cost me an extra $30!!! (Remembering of course that I deal in very petty sums in the market). But maybe I'll get my chance in Red October.

 

[Sean K]

Kennas, I;m sure I don't need to remind you- but a fair bit of MAH's Order book comes from outside the resources sector (Mitchell Freeway extension etc). <50% from Mining. So I don't think MAH will fall to pieces with commodities come off the boil.

And well, as for my little bad debts scenario. MAH seems to have some pretty secure clients. BHP, WA government, (and lastly KIM, don't know much about them though)... so it's a pretty unlikely scenario. Yet there were probably a few MAH equivalents who got burnt when Pasminco went into liquidation (though I don't know the details there so well).

Anyhow... I didn't get my order filled at 75 cents... pretty stupid of me really, cause 76cents would of only cost me an extra $30!!! (Remembering of course that I deal in very petty sums in the market). But maybe I'll get my chance in Red October.

Hi Kipp,

$0.75 did work to be short term support. $0.70 is long term support IMO, so be prepared for that. Might pick it up next month....But I've seen some bullish reports on this Qtr. Tips of 5300 on ASX...

Been trending nicely lately, time for an upward move perhaps.....

Cheers, kennas

 

[Sean K]

Hi Kipp,

$0.75 did work to be short term support. $0.70 is long term support IMO, so be prepared for that. Might pick it up next month....But I've seen some bullish reports on this Qtr. Tips of 5300 on ASX...

Been trending nicely lately, time for an upward move perhaps.....

Cheers, kennas

I hate people who quote themselves.

MAH broken out by the look of it. Previous resistance between $0.85 and $0.90, now hopefully a solid support area. $1.00 in sights.

 

[Sean K]

Could almost crack $1.00. Awarded yet ANOTHER contract: $230 mil from BHP in the Pilbara. Come on LEI, WOR, UGL, DOW - take me over for $2.00. Bargain!

 

[Sean K]

Didn't take $1.00, but close. Getting some media which will support it. Really has been a great little company.

Broke through resistance at $0.90 the past week, tested it, and headed on to all time highs. Blue sky now.

I'll be buying more still on the next pull back. Perhaps if it tests $0.90 again.

From The Age today:

Macmahon scores $230m Pilbara mine deal
November 2, 2006 - 2:29PM

Macmahon Holdings Ltd has been awarded a three and a half year $230 million mining, crushing and train loading contract at the BHP Billiton Iron Ore Jimblebar mine in Pilbara, Western Australia.

The mine has been operated by Macmahon on a short-term contract since March.

"We have worked closely with BHP Billiton Iron Ore to finalise a contract that includes a carefully considered risk profile for each party, with Macmahon taking the appropriate responsibility for the issues it manages," chief executive Nick Bowen said.

"Macmahon now has a significant presence in iron ore with BHP Billiton with the two long term contracts in the Newman region, Orebody 18 and Jimblebar, requiring a combined workforce of more than 300 people."

 

[Sean K]

MAH falling over, heading to $0.90 by the look of it.

 

[3 veiws of a secret]

KENNAS what d'hell happened to MAH -83 cents! wave that magic wand at 90 cents

 

[Sean K]

Really unusual. Can't make out why yet.

Sold allplant for $70 mil.....is that bad? Perhaps the market thought it was worth more?

In the CEOs adress today he said the revenue for next year was likely to be at the lower end of the $1 - 1.1b range and that EBIT might not make 6% as advised this year but will the following. That's the only thing I can see that might have contributed to this. Perhaps the market was looking for figures above and beyond. Tough.

Off 11%. That is a knee jerk oversold reaction to me. But, I have only scanned the anns today, perhaps there's more in it. I guess we'll find out.

$0.90 was support, now it's $0.85, but it's sitting just under that as well. I'd expect a bounce on Monday unless there's something we don't know about.

 

[Sean K]

This is a news report that came out after the anns:

MacMahon expects growth in FY07, FY08
10/11/2006 02:33:29 PM

MacMahon Holdings Ltd says the outlook for its mining business is positive and that it expects annual profit to grow in the 2007 fiscal year.

Managing director Nick Bowen also said that profit in the second half of this year would be stronger than the first half, excluding the proceeds from the sale of the company's Allplant Hire business to Coates Hire Ltd.

Mr Bowen told shareholders that Macmahon's mining business had secured $850 million in contracts and contract extensions in the first four months of this financial year.

"The outlook for our mining business is very positive ... and the next 12 months will be spent bedding down the contracts that we've won," he said at the company's annual general meeting.

"Second half profit is expected to be stronger than the first half (excluding the Allplant Hire profit on sale).

"We anticipate annual profit to grow in 2007 and expect further increase in 2008," he said.

Macmahon said earlier that it had sold the Allplant equipment hire division to Coates for $70 million, and that it expected to realise a profit before tax of about $12 million on the deal.

Mr Bowen also told the meeting the company's contract for underground works at the Argyle diamond mine in WA was worth $180 million.

MacMahon made a net profit of $7.5 million in 2005/06, down 53 per cent on the prior year.

The result included a $19.9 million writedown on the value its seven per cent investment in Asia Pacific Transport.

At 1412 AEDT, MacMahon shares were up 1.5 cents to 95 cents.

Nothing odd or new in this review. The writedown I've put in bold was made aware to the public ages ago. This was factored into the sp.

 

[3 veiws of a secret]

Kennas miracalously I pulled the pin before the announcement ,when I flicked the screen and saw 83 cents I thought MAGIC ,by the time I did my calc's I felt like "hold on lets see if it falls further"! Kennas I have watched this share when it was 51 cents.....and still google'ing this one!

 

[Sean K]

Kennas miracalously I pulled the pin before the announcement ,when I flicked the screen and saw 83 cents I thought MAGIC ,by the time I did my calc's I felt like "hold on lets see if it falls further"! Kennas I have watched this share when it was 51 cents.....and still google'ing this one!

My reasons for buying this haven't changed. I haven't held as long as you, but am still well up. These guys just keep winning contracts and their only error has been investing in a rail line. Very strange that they get punished today when the market is pretty buoyant.

Hopefully there's at least a dead cat on Monday am.

Come over here WOR, DOW, etc, come and buy me. Maybe even that other company named after a flower could make a bid. Monadelphous or something...

 

[Kauri]

My reasons for buying this haven't changed. I haven't held as long as you, but am still well up. These guys just keep winning contracts and their only error has been investing in a rail line. Very strange that they get punished today when the market is pretty buoyant.

Hopefully there's at least a dead cat on Monday am.

Come over here WOR, DOW, etc, come and buy me. Maybe even that other company named after a flower could make a bid. Monadelphous or something...

I don't hold this one but couldn't help notice the spirited selling that went on for a couple of days at the recent high. Was on my list for possible shorts but couldn't find any other tech reason for shorting.Looks like someone knew something and didn't tell you??

 

[Sean K]

I think that was Hunter Hall selling down.

 

[Kauri]

I think that was Hunter Hall selling down.

Then we should see the sub holder notice next week??

 

[3 veiws of a secret]

My reasons for buying this haven't changed. I haven't held as long as you, but am still well up. These guys just keep winning contracts and their only error has been investing in a rail line. Very strange that they get punished today when the market is pretty buoyant.

Hopefully there's at least a dead cat on Monday am.

Come over here WOR, DOW, etc, come and buy me. Maybe even that other company named after a flower could make a bid.

I think I will be sniffing at the blood come monday morning ,thankfully I did not buy at 90 cents.....furthermore feel pretty wounded today with UGL loosing out to DOW in the tender -$15K......makes me sort of humble ,meek and time for a glass of chardonnay!