MND - Monadelphous Group

[McCoy Pauley]

Re: MND - Monadelphous

I've only briefly skimmed Monadelphous full year results announcements but they look impressive. No wonder MND's share price has lifted almost 5% this morning. Revenue up 31.4% on the previous year and NPAT up 44.5% on the same period.

 

[Muschu]

Re: MND - Monadelphous

I've only briefly skimmed Monadelphous full year results announcements but they look impressive. No wonder MND's share price has lifted almost 5% this morning. Revenue up 31.4% on the previous year and NPAT up 44.5% on the same period.

Seemed like an outstanding result. Yet, why the plunge yesterday? Sure, it filled a gap in the chart but did it make sense for any fundamental reason?

Could there be a connection to the BHP report?

I certainly didn't understand it.

Rick

[Not holding MND or BHP]

 

[skc]

Re: MND - Monadelphous

Seemed like an outstanding result. Yet, why the plunge yesterday? Sure, it filled a gap in the chart but did it make sense for any fundamental reason?

Could there be a connection to the BHP report?

I certainly didn't understand it.

Rick

[Not holding MND or BHP]

Yes the BHP announcement knocked ~3% off every mining services company. MND basically said to the market that they never heard of the end of the mining boom... but the market decided that they'd listen to the BHP chief instead.

The mood for the sector (was it just me) has really changed in the last couple of days from buy the result to sell the pop imho.

 

[craft]

Re: MND - Monadelphous

Yes the BHP announcement knocked ~3% off every mining services company. MND basically said to the market that they never heard of the end of the mining boom... but the market decided that they'd listen to the BHP chief instead.

The mood for the sector (was it just me) has really changed in the last couple of days from buy the result to sell the pop imho.

Bit of a tug of war going on between those looking at the recent returns and those forecasting a reversion to the mean. We sure aren’t looking at cyclical low profitability in the actual results but BHP’s announcement gives weight to the mean reversion argument.

My Buy cyclical companies when profitability is low.

 

[skc]

Re: MND - Monadelphous

Bit of a tug of war going on between those looking at the recent returns and those forecasting a reversion to the mean. We sure aren’t looking at cyclical low profitability in the actual results but BHP’s announcement gives weight to the mean reversion argument.

My Buy cyclical companies when profitability is low.

Or do a Roger method - take most recent ROE at peak of cycle and extrpolate to infinity and beyond.

 

[craft]

Re: MND - Monadelphous

Or do a Roger method - take most recent ROE at peak of cycle and extrpolate to infinity and beyond.

You know, that guy really used to annoy me and how he was leading so many people astray – but I have realised that my excess return comes from exploiting market inefficiencies (a nice way of saying other people’s mistakes/ignorance) So no soap box today.

 

[McLovin]

Re: MND - Monadelphous

You know, that guy really used to annoy me

Really? I would have never guessed.

 

[McCoy Pauley]

Re: MND - Monadelphous

I bought some MND yesterday (unfortunately not at the lows of the day). MND's CEO seems positive about the flow of work for the next 12 months, and they did announce some contract wins a couple of months ago which suggested that their pipeline of work will be full for a while.

MND has had a track record of good company management so I'm prepared to risk the money on this play.

 

[fanger]

Re: MND - Monadelphous

Starting to look expensive at $26-$27 although I'm not complaining I got in around $19.50
Lets hope for a excellent report.

 

[McCoy Pauley]

Re: MND - Monadelphous

Seemed like a decent contract win announced this morning, but share price down just under 1% for the day.

I'm interested to see that MND has introduced a DRP.

 

[tinhat]

Re: MND - Monadelphous

Seemed like a decent contract win announced this morning, but share price down just under 1% for the day.

I'm interested to see that MND has introduced a DRP.

I hate DRP. They are a way of sequestering the dividend back from shareholders. As a shareholder you have a choice to receive a cash dividend but in doing so you dilute your ownership in the company or forgo the dividend in order to retain your stake in the company.

 

[McCoy Pauley]

Re: MND - Monadelphous

I thought the results announced this morning looked quite strong, but the market has disagreed, marking the price down 7% so far today. The executive management team did suggest a period of consolidation for next financial year, so I guess the premium is coming out of the stock price because the managers are implying that the company could be in for a period of low growth.

 

[Knobby22]

Re: MND - Monadelphous

Nice dividend rise and I always like to see long term maintenance contracts.

The result was strong but the price implies strong growth in the future. Not that easy.

 

[fanger]

Re: MND - Monadelphous

I thought the results were excellent but punished again today down another 10%. I don't know what the market was expecting in the results.

 

[Country Lad]

Re: MND - Monadelphous

I thought the results were excellent but punished again today down another 10%. I don't know what the market was expecting in the results.

The market is forward looking by about 12 months. Today's prices generally reflect what may happen in 12 months or a bit longer, that is why prices move with any company's forecasts and outlook.

From MND's report:

Whilst the opportunities for construction beyond this financial year remain solid based on the volume of approved projects, project delays and a slowdown in near-term new major project approvals are likely to reduce the pipeline of opportunities in the medium-term.
Looking beyond the current financial year, after two consecutive years of extraordinary growth of more than 30 per cent, 2013/14 is currently anticipated to be a period of consolidation in which the achievement of any revenue growth will be challenging.

​

This be a good lesson in how the market reacts.

Cheers
Country Lad

 

[Huskar]

Re: MND - Monadelphous

Pretty incredible stat in the AFR today. MND was the best performer on the ASX over the last 10 years, up 2740.24% and 4920% including dividends. That's ~50% compounded per annum for 10 years.

Anyone been holding that long?

Happy days

 

[McCoy Pauley]

Re: MND - Monadelphous

If only.

I have, however, recently added to my position on the current weakness.

 

[Julia]

Re: MND - Monadelphous

Pretty incredible stat in the AFR today. MND was the best performer on the ASX over the last 10 years, up 2740.24% and 4920% including dividends. That's ~50% compounded per annum for 10 years.

Anyone been holding that long?

Happy days

If only.

I have, however, recently added to my position on the current weakness.

So you're buying more on the basis of past performance? Are you taking any account of the decided weakness in the sector, both now and projected into the future? It would seem not.

 

[McCoy Pauley]

Re: MND - Monadelphous

So you're buying more on the basis of past performance? Are you taking any account of the decided weakness in the sector, both now and projected into the future? It would seem not.

You're making an assumption about my investment criteria and decision making, and you know what they say about making assumptions.

 

[Julia]

Re: MND - Monadelphous

You're making an assumption about my investment criteria and decision making, and you know what they say about making assumptions.

Please feel free to correct my impression by explaining why you bought more.