MLD - MACA Limited

[System]

MACA Limited (MLD) is a leading supplier of mining and civil services to clients in the mining and construction sector in Western Australia.

http://www.maca.net.au

 

[McCoy Pauley]

The owners of MACA Ltd only floated a portion of the issued share capital in the company and kept a majority of the shares for themselves. Heavily oversubscribed IPO - rather than scale back entitlements, people (especially retail investors) got zip out of the IPO.

43% premium on the first day after being listed. I've hopped in and still holding. Got battered today with the general market sell-down, especially given MACA's exposure to the mining industry.

 

[Tightwad]

I might have bought at $1... been keeping an eye on it, on the first day was about $1.45, thought that was too high to jump in, Only early days yet however. I'll only be in for a small amount, seems a bit speccy to me.

 

[McCoy Pauley]

From memory (been a while since I read the prospectus), MACA have some contracts coming up for renewal in 2011 and 2012. They are fairly fundamental to the business, so it would be bad moon rising if they failed to renew those deals.

The founders established the company in 2002, so it has a fair track record. Certainly isn't anywhere near as established as the likes of Worley Parsons or Monadelphous, but I think it has plenty of potential.

 

[ubtheboss]

One look at their ARs for the last 4 years tells me they are a great company. Seem to tick all the boxes in terms of ROE, low D/E, increasing revenues, net profits, etc.

They were way undervalued at the $1 float price. My intrinsic valuation for MLD right now is north of $2 so it has lots of room to grow. Every company like this relies on new contracts and/or contract renewals. That's just business. Nothing in their track record thus far tells me they will have problems continuing to grow in the future.

Anything past 2013 though is guesswork.

I jumped in for a chunk on day two. Buyers petered out towards the end of last week and there was a sell on volume on Friday. From a TA point of view that might mean a retracement. For how long I don't know but I DO know MLD is undervalued by at least 40% just looking at their ARs. They have enough work on the books too to keep the value rising. Their rep in the biz is very high.

I'll hang on to this one for at least a couple of years. That's what value investing is all about.

 

[ROE]

One look at their ARs for the last 4 years tells me they are a great company. Seem to tick all the boxes in terms of ROE, low D/E, increasing revenues, net profits, etc.

They were way undervalued at the $1 float price. My intrinsic valuation for MLD right now is north of $2 so it has lots of room to grow. Every company like this relies on new contracts and/or contract renewals. That's just business. Nothing in their track record thus far tells me they will have problems continuing to grow in the future.

Anything past 2013 though is guesswork.

I jumped in for a chunk on day two. Buyers petered out towards the end of last week and there was a sell on volume on Friday. From a TA point of view that might mean a retracement. For how long I don't know but I DO know MLD is undervalued by at least 40% just looking at their ARs. They have enough work on the books too to keep the value rising. Their rep in the biz is very high.

I'll hang on to this one for at least a couple of years. That's what value investing is all about.

For a $1 to $1.20 this stock worth a punt, above that I dont think
the risk is worth it...

You cannot calculate intrinsic value on this stocks without a lot of luck and guess works as all their contracts are up in the next 2 years...

any of those contract goes kaboom their goes your calculation..

Reading their prospectus, their risk is not small but significant

that why the founder sell them for a $1 ... I wouldn't buy above $1 - $1.20
don't care what other people say you cannot rule out those significant risk

One of their big contract is Crossland which is 50% own by MMX, MMX has a bit issues lately ....

When I bought FGE at a buck, it has much more fundamentals than this one...

Good luck though my 2 cents

 

[McCoy Pauley]

Looks like $1.80-$1.85 is turning into a bit of a resistance level for MLD. The share price has been hovering around this level for a couple of weeks and has traded in a narrow band between $1.73-$1.80 for all of 2011 so far.

The company announced earlier in the year that one of its clients had exercised "force majeure" on its contract with MLD but that earnings wouldn't be affected. Nothing further has been released to the market about any update on the contract.

Still holding as it's still below what I calculate its intrinsic value to be at present, but I'm looking forward to seeing its first half-year report soon.

 

[McCoy Pauley]

Nice little announcement this morning saying that the NPAT is expected to comfortably exceed prospectus forecasts, based on the company's performance in the first half of the financial year.

Share price has reacted accordingly.

 

[ubtheboss]

Absolutely McCoy! I felt it was going to be good but it even exceeded my expectations.

Sorry to say 'I told you so' Robusta but.... :

There will always be risk but MLD management are managing it just fine.

 

[ROE]

Absolutely McCoy! I felt it was going to be good but it even exceeded my expectations.

Sorry to say 'I told you so' Robusta but.... :

There will always be risk but MLD management are managing it just fine.

well done for those bought in after the float even at 50% premium you doing nicely...

future is too uncertain for me

 

[McCoy Pauley]

Announcement of a new contract this morning from MACA Ltd - six-year contract worth $285 million in revenue to the company through the life of the contract to provide mining services to Southern Iron Pty Ltd, a wholly owned subsidiary of WPG Resources Ltd, for the Peculiar Knob project 90km south of Coober Pedy in SA. It's MACA's first contract win outside South Australia. Work commences in April 2011.

The share price has gone ballistic in response. Up 30c or 12% this morning. As a happy holder, I'm grinning from ear to ear, counting my paper profits.

DYOR, of course.

 

[ubtheboss]

Couldn't agree more McCoy. I'm happier than a pig in slop. Had a little retrace yesterday which is healthy. Don't want things going up in a straight line and spooking value investors

 

[McCoy Pauley]

The first half earnings announcement will be an interesting read, I think, if the announcement in late January is anything to go by. Personally, I wouldn't have been selling my holdings (and I didn't) yesterday and I think the first half earnings announcement might be yet another catalyst for an upward re-rating of MLD.

 

[Intrinsic Value]

The first half earnings announcement will be an interesting read, I think, if the announcement in late January is anything to go by. Personally, I wouldn't have been selling my holdings (and I didn't) yesterday and I think the first half earnings announcement might be yet another catalyst for an upward re-rating of MLD.

Good work guys.

I really wanted a piece of this company when it was about to float but unfortunately I didn't have any spare cash.

It was always a bargain from the very start but I have to say it has even exceeded most people's expectations.

 

[McCoy Pauley]

There's a couple of brokers out there with coverage initiated on MLD - Hartley's and Foster Stockbroking. I contacted Hartley's yesterday for a copy of their report on MLD, which was prepared in November 2010, so it's a little out of date. They forecast MLD earning roughly 30% return on equity for the next two years, with NPAT of $23.1 million in FY11 and $27.4 million in FY12.

I believe Hartleys was the stockbroker that worked on the float, so there should be some grains of salt taken with the report, but it certainly looked healthy.

For those shareholders that want a copy of the report, send an email to Trent Barnett of Hartleys. His contact details are on the MLD website.

The Foster Stockbroking report can be located through a Google search.

 

[ubtheboss]

I will continue to hold though I may take a little profit off the top as I approach 100%

Putting a sticky note reminder on my wall- 'have cash ready to buy more MLD in case owner sells some shares when they come out of escrow in Oct and the sp dips'. They may want to take some profit off the top too. Nothing wrong with celebrating success by buying yourself a big fat yacht haha

 

[McCoy Pauley]

First half earnings announced this morning by MACA Ltd. Announced pro-forma NPAT of $15.7 million (up 121% on the same period in 2010). A $0.03/share dividend announced, in line with the IPO prospectus. Order book of $427 million as at December 2010, now stands at $682 million with the contract announced earlier in the month with WPG Resources.

43% of revenue derived from iron ore mining clients, 34% from gold mining clients and 23% from base metals clients. Current contracted work in hand position is $682 million with a further $196 million in potential extensions on existing contracts.

The MD, Chris Tuckwell, said that MLD is "well positioned to exceed [MLD's] prospectus full year profit forecast of $23.1 million."

 

[McCoy Pauley]

Announcement this morning from MACA, announcing that Crossland Resources has exercised force majeure on a contract with MACA due to bad weather. Minimum suspension period of 14 days.

 

[kingkev]

Looks like a bit of profit taking hold....................might be time to buy in
looks like a good stock to hold on to

 

[tinhat]

Looks like a bit of profit taking hold....................might be time to buy in
looks like a good stock to hold on to

I think I missed the boat on this one. I can't see any value in jumping in now.