MND - Monadelphous Group

[notting]

I meant LYL not LYC!!

 

[pinkboy]

MND broke it's double bottom today, close circa 4 year low. I occasionally do work for these guys here in Mackay and they all seem on edge and are not as busy as usual. That's just my take on them localized, I'm sure their other big projects are keeping them going.

pinkboy

 

[Sharkman]

yeah danger signs here IMHO too. i sold out a few months ago and was looking for a re-entry at around the 15 level if it had tested 14.70'ish and support had held, but it just blasted right thru it today. and FGE is still fresh in everyone's minds. not saying it's going to become another FGE, but a bit (actually a lot) iffy on getting back in now...

 

[McCoy Pauley]

Down 3% in a market that fell about 1% today.

The share price chart looks very poor and I'm deep into the red, but I'm continuing to hold as it's one the best-managed engineering companies on the Australian market. I'm participating in the DRP, but I'm not at this stage prepared to buy more shares (mostly due to the fact that I don't have much cash to invest at present).

I haven't overlaid the iron ore price chart over the MND share price chart, but I suspect that the renewed weakness in the share price as coincided with the fall in the iron ore price. Although MND has spent some time diversifying away from supporting iron ore miners into the energy sector, it seems the market still perceives MND as a supplier to iron ore miners and is marking MND down accordingly.

 

[skc]

I haven't overlaid the iron ore price chart over the MND share price chart, but I suspect that the renewed weakness in the share price as coincided with the fall in the iron ore price. Although MND has spent some time diversifying away from supporting iron ore miners into the energy sector, it seems the market still perceives MND as a supplier to iron ore miners and is marking MND down accordingly.

From their full year presentation, iron ore was 35% of their revenue. Iron ore has plunged recently but coal hasn't been having much fun for even longer, and that's 16.8% of their revenue.

If you read the report by any of it's peers, everyone is trying to diversify into oil and gas. The oil and gas industry is currently propped up by the last stage of the LNG building spree and the related CSG areas. Be prepared for much lower revenue and profits when that segment comes off the boil.

 

[galumay]

From their full year presentation, iron ore was 35% of their revenue. Iron ore has plunged recently but coal hasn't been having much fun for even longer, and that's 16.8% of their revenue.

If you read the report by any of it's peers, everyone is trying to diversify into oil and gas. The oil and gas industry is currently propped up by the last stage of the LNG building spree and the related CSG areas. Be prepared for much lower revenue and profits when that segment comes off the boil.

Whilst I agree with all of the above, I still bought some MND for my SMSF this week, at $14 the revenue and profits can fall a long way and that price still represents reasonable value.

I took a very conservative view of future earnings, but having worked in the industry for the last 20 years I know how much of the sort of work that MND does, still needs to be done. I genuinly think that there is a lot of upside in the whole mining services sector and I think the market has greatly over reacted. Time will tell if my contrarian instincts are correct!

 

[Julia]

Down 3% in a market that fell about 1% today.

The share price chart looks very poor and I'm deep into the red, but I'm continuing to hold

Just curious, and of course you don't have to answer, but how far would it have to fall before you'd get out?

Btw, several financial stocks fell substantially over the 1% today

 

[Wysiwyg]

From a technical view and knowing the future outlook is for slower growth I have gone to the Bulkowski well for a price target on the Descending Triangle formation. Thomas states that you deduct the formation high at the start from the formation low at the start, multiply this by the sample success rate hitting target and deduct that from the breakout price. So the calc. is

A $20.82 - B $15.20 = $5.62
$5.62 * sample success rate 0.54 = $3.03
Deduct $3.03 from breakout price $14.49 = $11.46

C = $11.46 target price

Today's low was $11.40 and close price was $11.49

From a personal perspective, simply recording these observations.

 

[Julia]

Down another 2.6% today. I'd forgotten all about this thread but note McCoy Pauley in September said

Down 3% in a market that fell about 1% today.

The share price chart looks very poor and I'm deep into the red, but I'm continuing to hold

I wonder if he's still holding?

 

[McCoy Pauley]

Down another 2.6% today. I'd forgotten all about this thread but note McCoy Pauley in September said


I wonder if he's still holding?

Yep, still holding. The industry is S-T-ruggling, of that there is no question, but management don't appear to be disclosing any adverse issues which would make me change my mind at this stage about holding shares in MND, as I rate MND the best operator in the industry. I'm participating in the DRP so add to my holdings every six months but otherwise not adding to my holding.

MND seems to be doing a reasonable job at diversifying into the oil & gas sector, but it would be nice if their contract wins were a little higher than $90 million from time to time!

Pure speculation but the slide in the iron ore price of late and the general perception that MND is primarily an engineering services company to the iron ore sector is working against sentiment in MND.

 

[Klogg]

Yep, still holding. The industry is S-T-ruggling, of that there is no question, but management don't appear to be disclosing any adverse issues which would make me change my mind at this stage about holding shares in MND, as I rate MND the best operator in the industry. I'm participating in the DRP so add to my holdings every six months but otherwise not adding to my holding.

MND seems to be doing a reasonable job at diversifying into the oil & gas sector, but it would be nice if their contract wins were a little higher than $90 million from time to time!

Pure speculation but the slide in the iron ore price of late and the general perception that MND is primarily an engineering services company to the iron ore sector is working against sentiment in MND.

The entire sector has been trashed out of fear of falling commodity prices. There's some value to be had, but McLovin's comments around the industry not being anywhere near the bottom concerns me. I'd rather sit it out than go contrary to his view.

BYL is probably most attractive at the moment, given the order book they have. Although their cap raising was a train-wreck.

@McCoy Pauley - are you aware of the order book amounts beyond FY15 for MND?

 

[McCoy Pauley]

The entire sector has been trashed out of fear of falling commodity prices. There's some value to be had, but McLovin's comments around the industry not being anywhere near the bottom concerns me. I'd rather sit it out than go contrary to his view.

BYL is probably most attractive at the moment, given the order book they have. Although their cap raising was a train-wreck.

@McCoy Pauley - are you aware of the order book amounts beyond FY15 for MND?

At one point I probably was, but I've been distracted by the pressures of life and I can't get the figures off the top of my head.

 

[fanger]

From a technical view and knowing the future outlook is for slower growth I have gone to the Bulkowski well for a price target on the Descending Triangle formation. Thomas states that you deduct the formation high at the start from the formation low at the start, multiply this by the sample success rate hitting target and deduct that from the breakout price. So the calc. is

A $20.82 - B $15.20 = $5.62
$5.62 * sample success rate 0.54 = $3.03
Deduct $3.03 from breakout price $14.49 = $11.46

C = $11.46 target price

Today's low was $11.40 and close price was $11.49

From a personal perspective, simply recording these observations.

View attachment 60218

Technically now this has broken down again where is it heading now?

 

[Wysiwyg]

Technically now this has broken down again where is it heading now?

Don't know and never do! Technically it has collapsed which I took advantage of today @ $10.43 for 400 shares, again at a technical level. To add confidence, by day end the price had extended back up to form a hammer candle. This means that there could be a short-medium term trend change as supply is exhausted. The U.S. markets can correct at anytime and our market may retreat further so the pressure to close out a position may return. React to market conditions/price action and use what you know (or think you know).

 

[Wysiwyg]

Definitely finding support again today. Completed the holding with 600 shares @ $10.62 for 1000 shares at an average price of $10.58 after brokerage. Chart shows another smaller hammer candle and although both bearish of type, they do show the bullish turnarounds with above average volumes. Not a common practice to buy in such a strong downward momentum and things could be very different.

 

[piggybank]

Today Deutsche Bank upgraded Monadelphous to a ‘hold’ on valuation grounds and has a target price of $11.43 a share on the mining services group.

 

[Miner]

Today Deutsche Bank upgraded Monadelphous to a ‘hold’ on valuation grounds and has a target price of $11.43 a share on the mining services group.

Hmm
How many times we saw Deutsche Bank valuation was right.
Currently with mining down turn all mining services are in bad shape so is MND. Their venture into Oil and Gas when oil also dived to $80 is challenging its own capability.
Watching MND and do not want to take knee jerk reaction to buy it now. However I have been many times wrong.

 

[Wysiwyg]

Not a common practice to buy in such a strong downward momentum and things could be very different.

Things are different and the overall market has weighed upon MND which I escaped at break even after brokerage. Overwhelming resistance. Must stop playing the buy low, sell lower game.

 

[Julia]

Things are different and the overall market has weighed upon MND

There are still stocks that are going up in the present market, or at the very least, not showing the determined and pronounced downtrend of MND. It has been trading below the EMA since July.

I'm just curious, and certainly there's no obligation for you or anyone else to respond, but is there a point at which the losses will be unacceptable, or is it a case of "too late now to sell"? Or "I believe in this stock, am emotionally invested in it, so will find any point that will allow me to rationalise holding."

 

[Wysiwyg]

There are still stocks that are going up in the present market, or at the very least, not showing the determined and pronounced downtrend of MND.

Am holding up trenders at the moment.

I'm just curious, and certainly there's no obligation for you or anyone else to respond, but is there a point at which the losses will be unacceptable, or is it a case of "too late now to sell"? Or "I believe in this stock, am emotionally invested in it, so will find any point that will allow me to rationalise holding."

Have not made any losses on MND and my approach is to cut these down trenders if they slip further, there is stubborn resistance and/or Index movement is negative. No emotional attachment.