MND - Monadelphous Group

[Valued]

Re: MND - Monadelphous

I decided to buy into MND today, for better or for worse I have considered it trading at slightly under fair value or approximately fair value given 2014 and 2015 projections. If 2014 brings another year like 2013 then I think everyone invested is going to be quite happy. If it brings around projections, it will still be ok. I will re-assess my position if it hits around $18.50 but I am guessing that it's far more likely that I will either be forced to stick with it for the long haul due to price fluctuations between present price and the re-assessment point (like a soft version of a stop loss) or that the price will rise. I don't suspect we are going to see any kind of downtrend but anything is possible.

I would have liked a better of margin of safety. Too bad I didn't buy in at 17.50!

I might still buy into FGE depending what happens at the end of this month with their potential loan covenant breach. I just don't understand how their loan agreement with ANZ works so I will see if anything happens.

 

[McCoy Pauley]

Re: MND - Monadelphous

I have to say I'm somewhat bemused and surprised about the positive reaction in the share price to what amounts to less than 10% of the FY13 revenue. However, given that MND updated the market that it had $1.4 billion of revenue from new contracts and contract renewals as at 1 July 2013, the extra $235 million it will earn from Rio for Cape Lambert is somewhat significant.

 

[Valued]

Re: MND - Monadelphous

I have to say I'm somewhat bemused and surprised about the positive reaction in the share price to what amounts to less than 10% of the FY13 revenue. However, given that MND updated the market that it had $1.4 billion of revenue from new contracts and contract renewals as at 1 July 2013, the extra $235 million it will earn from Rio for Cape Lambert is somewhat significant.

I only invested because I considered we are trading at fair value even based off 2014 projections and that there is, what Buffet calls, a "cheery consensus". Everyone wants to buy, not many people want to sell unless they bought much lower, and the consensus is that this is a good company. Buffet once said you pay a premium for a cheery consensus. I take a cheery consensus when I can pay a fair price. The big part of this was the fact that a fair value stock was trending higher on the back of very positive news about the future prospects of the company. It did only amount to 236m but you also have to frame it in the fact that MND again turned over amazing ROE and record profits and when you combine that with more positive news, the market can't help itself. If they are going to do another 50% ROE year then it should be very good for investors but it will be good even if they meet the 2014 projections of 145 eps.

I bought in for 20.59 and broke even today. We will see what the next few weeks/months hold.

 

[piggybank]

MND - Monadelphous Group Limited

2013 AGM Presentation and Updated Outlook - http://stocknessmonster.com/news-item?S=MND&E=ASX&N=658148

 

[piggybank]

 

[McCoy Pauley]

Been a volatile ride over the last six months, and the volatility has increased over the last 6 weeks. I'm not a technical trader/analyst, but it looks like there could be a double bottom here, and if you stretch the chart back to July, possibly a triple bottom.

I hold, so DYOR.

 

[tinhat]

Relative to the sector in general, the MLD half year results are impressive and have pleased the market. This company continues to impress for being well managed. Overheads down, revenues holding up. Good dividend yield. The concern however, is that this company makes 75% of its revenue from engineering construction and only 25% from maintenance services. On T/A it looks a buy and it has a good dividend yield but I'm not convinced that it can maintain revenues and margins long term.

 

[skc]

Relative to the sector in general, the MND half year results are impressive and have pleased the market. This company continues to impress for being well managed. Overheads down, revenues holding up. Good dividend yield. The concern however, is that this company makes 75% of its revenue from engineering construction and only 25% from maintenance services. On T/A it looks a buy and it has a good dividend yield but I'm not convinced that it can maintain revenues and margins long term.

Definitely a clean and strong result... market was bracing for some sort of nasty miss so the shorts were scrambling to cover this morning.

They are guiding to full year revenue down 10%. Considering that H1 revenue was about the same as pcp ($1.28B), H2 is going to be 20% lower ($1.07B vs $1.33B pcp).

Share price wise it may have a little bit more momentum for a few sessions but I think the market will soon return to second guessing MND's guidance until the next reporting period.

Definitely the tallest Dwarf... but who like Dwarves at all? (Unless you are Tauriel from the Hobbit).

 

[tinhat]

Oops. MND. :

 

[Julia]

On T/A it looks a buy and it has a good dividend yield but I'm not convinced that it can maintain revenues and margins long term.

Can you say why you believe it's a buy on T/A?

 

[Valued]

Can you say why you believe it's a buy on T/A?

I am guessing since he thinks we are at the bottom of the trading range that it's a good buy. Perhaps, but it's not a high probability setup. There has been a long downtrend and its at best a trading range with lowering supply points (pattern traders would consider this to be a descending triangle in the making) or the start of a new downtrend. There are better opportunities imo. At any rate, trading trading ranges before a breakout occurs is a difficult task. Trading them for the move up to the supply line imo is inferior to swing trading in an established trend. That's where opportunity cost comes into play.

 

[tinhat]

Can you say why you believe it's a buy on T/A?

Obviously the stock is in downtrend, but as the posters above me mentioned, a potential double bottom has formed. The share price has bounced off the lower bollinger band on the daily and weekly charts but the gap up to yesterday's open might be of concern to some T/A. I should have chosen my words better and said that the stock might be a technical buy. I don't own and don't have any plans to invest in MND.

 

[Julia]

There are better opportunities imo. At any rate, trading trading ranges before a breakout occurs is a difficult task. Trading them for the move up to the supply line imo is inferior to swing trading in an established trend. That's where opportunity cost comes into play.

+1.

Obviously the stock is in downtrend, but as the posters above me mentioned, a potential double bottom has formed. The share price has bounced off the lower bollinger band on the daily and weekly charts but the gap up to yesterday's open might be of concern to some T/A. I should have chosen my words better and said that the stock might be a technical buy. I don't own and don't have any plans to invest in MND.

OK.
I had MND from about mid 05 to mid 07. Wouldn't look at it unless there's a clear uptrend again.

 

[Ves]

Trading halt.... significant contract won according to the company statement.

Any chance it could be Roy Hill? That'd go a long way to filling the revenue gap for the next couple of years.... and they probably have more bargaining power / capability than FGE and may get a better margin.

 

[McCoy Pauley]

Trading halt.... significant contract won according to the company statement.

Any chance it could be Roy Hill? That'd go a long way to filling the revenue gap for the next couple of years.... and they probably have more bargaining power / capability than FGE and may get a better margin.

Been appointed a subcontractor to JKC Australia Pty Ltd (a joint venture between JGC Corporation of Japan, Chiyoda Corporation, and Kellogg Brown & Root Pty Ltd) on the Icthsys Project Onshore LNG Facilities in Darwin. Contract value is approximately $680 million and should go from now until mid-2016.

Presumably MND has done its sums on the agreement and it won't be too squeezed in undertaking the work.

Positive reaction this morning - up almost 5%.

 

[piggybank]

Monadelphous Awarded $680M Contract on Ichthys LNG Project - http://stocknessmonster.com/news-item?S=MND&E=ASX&N=668480

The stock closed @ $17.66 (up 6.5% on the day) with volume nearly 880,000.

​

 

[SilverRanger]

Obviously the stock is in downtrend, but as the posters above me mentioned, a potential double bottom has formed. The share price has bounced off the lower bollinger band on the daily and weekly charts but the gap up to yesterday's open might be of concern to some T/A. I should have chosen my words better and said that the stock might be a technical buy. I don't own and don't have any plans to invest in MND.

That sure is a double bottom now, can't see any obvious resistance after 17.3 is broken, perhaps 17.8 for the descending triangle?

 

[Sharkman]

That sure is a double bottom now, can't see any obvious resistance after 17.3 is broken, perhaps 17.8 for the descending triangle?

i'm out at 18.23 today

on the basis that it tested the 200 day EMA in early sept, late oct and late dec, and has yet to conclusively break above it, on the latter two occasions it pretty much rallied straight to the 200 day EMA then immediately reversed. it's gotten to around the 200 day EMA today, so i opted to take the money and run. if it drops back down to the 15'ish level again, i'll probably look to re-enter at that point

 

[piggybank]

On the basis that it tested the 200 day EMA in early sept, late oct and late dec, and has yet to conclusively break above it, on the latter two occasions it pretty much rallied straight to the 200 day EMA then immediately reversed. it's gotten to around the 200 day EMA today, so i opted to take the money and run. if it drops back down to the 15'ish level again, i'll probably look to re-enter at that point

​

 

[notting]

Yeah, getting a bit happy looking forward to that dividend.
May put a short on it at the close on the night before it goes ex if it keeps running up.
MND is one of if not, the best in the sector.
This is what LYC, another good company in the sector, wrote to us today -

Lycopodium’s services when compared to the preceding two years. Reiterating our prior advice, the
reduction in demand is attributable to the following factors:
•
Lower commodity prices across a wider range of commodities including gold.
•
Major mining companies belt tightening across all
facets of their business, a focus on opitimising
existing assets and limiting capital expenditure.
•
Junior mining companies finding it difficult to raise equity for studies and projects.
•
The manufacturing sector continuing its decline in Australia. This is also coupled with continuing
austerity measures.
•
Increasing competition between services providers,
increasing appetite for risk, as well as lower
margin expectation

Not a pretty picture!