NWH - NRW Holdings

[PointBlank]

So the price is now up to $1.15 - roughly 7% up yesterday and 7.5% so far today. Do you think this is a result of the $32million win for BHP 2 days ago or perhaps because it's getting closer to dividend date. The real question will be can it hold its price (or grow) until div or will it slip?

 

[skc]

So the price is now up to $1.15 - roughly 7% up yesterday and 7.5% so far today. Do you think this is a result of the $32million win for BHP 2 days ago or perhaps because it's getting closer to dividend date. The real question will be can it hold its price (or grow) until div or will it slip?

NWH has revenue of $1.3B last year so a $32m contract is but a rounding error.

The whole sector has a bit of life recently. I suspect coming into reporting season may be some of the short positions are being unwinded...

 

[notting]

NWH has revenue of $1.3B last year so a $32m contract is but a rounding error.

The whole sector has a bit of life recently. I suspect coming into reporting season may be some of the short positions are being unwinded...

Yeah and we're about 2 months out from dividends and China figures where better than expected and AU$ is down making us a bit more competitive and IO prices haven't gone to $70 as prophesied by the Fu#K Witts at Goldman Sachs whilst calling buys on BHP and RIO and even gold seems to have found a base here and is better against the Ausi as is IO.

 

[galumay]

Yup, i think they were way oversold, all of the factors in the posts above have probably contributed to the share price moving back up towards the IV.

I bought these a little early, nearly square again now and I had no concerns as they dropped down about 20% below what I paid, the fundamentals are good and even allowing for the likely downturn in earnings they still show solid prospects in the medium to long term.

Happy to be a holder of NWH.

 

[jazza679]

Anybody know why this dropped nearly 15 cents today? I'm not aware of any announcements that could have caused this or is it just investors cashing out profits from gains made last and early this week. It just seems like a large fall for no reason from what I can see.

 

[Fifty101]

I'm keen to know too. I did notice that a number of mining services companies all dropped today:

BKN - down 6.38%
MND - down 5.04%
FWD - down 6.08%
NWH - down 13.18%

Odd, considering RIO and BHP were fairly stable.

????????

 

[Ves]

They're probably all down due to the Ausenco (AAX) earnings downgrade announcement this morning.

 

[skc]

Anybody know why this dropped nearly 15 cents today? I'm not aware of any announcements that could have caused this or is it just investors cashing out profits from gains made last and early this week. It just seems like a large fall for no reason from what I can see.

Catepillar earnings were below estimates last night and citing weakness everywhere, and this morning AAX came up with a pretty significant profit downgrade, barely 2.5 months after their AGM. With reporting season just around the corner it may be the start of a fresh wave of downgrades by the sector.

 

[Ves]

Catepillar earnings were below estimates last night and citing weakness everywhere, and this morning AAX came up with a pretty significant profit downgrade, barely 2.5 months after their AGM. With reporting season just around the corner it may be the start of a fresh wave of downgrades by the sector.

Thanks - forgot about them from last night. Explains why SVW also went down 5-6%.

 

[galumay]

They're probably all down due to the Ausenco (AAX) earnings downgrade announcement this morning.

Thats how I read it too, still happy to hold NWH as I think they are one of the better situated mining services companies and have been oversold IMO.

 

[odds-on]

In April this year I took a position in NWH @ $1.425. This means I now have my underwater swimming badge . NWH released their Annual Report on 22/08/2013. Before reading the report I took a step back to assist my decision making process and thought about the following :

• I have never worked for an earthmoving company
• I do not know anybody who works for NWH
• I do not know anybody who works in the industry
• I do not live in Australia
• I am not a qualified accountant
• My career has been spent working with (and for) cyclical/engineer/contractor type businesses.

All up, I am not going to be able to provide an valuable insight into the business, the only thing I do know is that with these types of businesses (cyclical/engineering/contractor) any attempt at precision is foolish – in my personal experience, agile management is the key to success. I therefore have decided not to put any weight on neither my business insights nor the management propaganda and instead weight my decision on the following:

• Bankruptcy looks unlikely in the next 6 months
• They are paying a dividend
• Above average ROE/ROCE (compared to all listed businesses)
• Cash of $131 million
• Order book of $1billion
• $3.96 billion in active tenders

My investment decision is to HOLD until next company guidance/HY report or a better opportunity… I have actually thought about the opportunity cost of this position to date, there have been two situations where I have been tempted to switch horses; the NCM write-downs and the recent MMS trading halt, both of which I would have been profitable if I had made my move – oh, how I cry.

If pushed to put a price on NWH, the five year snapshot on Page 52 of the Annual Report is worth looking at for 5 minutes before even attempting to put numbers into a spreadsheet to calculate the “Intrinsic Value” using some formula, it would be a waste of time, so finger in the air estimate, $1.80-$2.40 seems about right to me .

Any thoughts?

Cheers

 

[galumay]

Oddson, I think you are correct to hold. With the benefit of hindsight you could have bought in at a better price - me too, to a lesser extent, I took a position at $1.14. But I agree with your assessment and would add that while the peak of the boom may have passed, the mining industry remains very strong and there will be plenty of work for companies like NWH going forward.

I reckon they were hugely oversold earlier this year and expect a slow and steady rise in share price over the medium term, we will also get a healthy dividend stream in the meantime. Happy to be a holder and back in the black, don't think it will be too long before you see some positive territory!

 

[Country Lad]

My investment decision is to HOLD until next company guidance/HY report or a better opportunity… I have actually thought about the opportunity cost of this position to date, there have been two situations where I have been tempted to switch horses; the NCM write-downs and the recent MMS trading halt, both of which I would have been profitable if I had made my move – oh, how I cry......................Any thoughts?

odds-on, this one is interesting from a technical viewpoint. We have been talking in other threads about two chart patterns, double bottoms, which has been successful for other charts and flags. This one has both.

I bought these on the break last Thurs so here is another view.

Cheers
Country Lad

 

[Country Lad]

P&F looks nice as well.

Cheers
Country Lad

 

[Pioupiou]

. . . If pushed to put a price on NWH, the five year snapshot on Page 52 of the Annual Report is worth looking at for 5 minutes before even attempting to put numbers into a spreadsheet to calculate the “Intrinsic Value” using some formula, it would be a waste of time, so finger in the air estimate, $1.80-$2.40 seems about right to me .

Any thoughts?

Cheers

I think you are right Oddson, and I have always thought NWH was worth something north of $2.00. The mid-point of your range is $2.10. I paid on average $1.34, so I am currently in the red, but hopeful as a long-term, dividend-liking investor. Positive themes are:

* NWH has a pile of cash.
* Its debt relates to hire purchase - not as toxic as corporate debt.
* It is more into civil work than mining services, although mining companies generate much of the civil work.
* NWH has a substantial presence in the Pilbara, and due to low costs, tonnages are expanding, plus some brownfield iron ore mines have been tagged for development.
* State royalties are tonnage based, and the WA Government has a Royalties-for-regions policy, which should translate into civil works from which NWH may get business.

 

[tinhat]

I think you are right Oddson, and I have always thought NWH was worth something north of $2.00. The mid-point of your range is $2.10. I paid on average $1.34, so I am currently in the red, but hopeful as a long-term, dividend-liking investor. Positive themes are:

* NWH has a pile of cash.
* Its debt relates to hire purchase - not as toxic as corporate debt.
* It is more into civil work than mining services, although mining companies generate much of the civil work.
* NWH has a substantial presence in the Pilbara, and due to low costs, tonnages are expanding, plus some brownfield iron ore mines have been tagged for development.
* State royalties are tonnage based, and the WA Government has a Royalties-for-regions policy, which should translate into civil works from which NWH may get business.

Up-blast! You're back in the money today Pioupiou. $1.49 as I type with lots of demand pushing up the price. I bought my current holding at $1. Makes the accounting easy . But I'm only back in the black recently too having got stopped out in July from an earlier holding bought at $1.20.

 

[Pioupiou]

Up-blast! You're back in the money today Pioupiou. $1.49 as I type with lots of demand pushing up the price. I bought my current holding at $1. Makes the accounting easy . But I'm only back in the black recently too having got stopped out in July from an earlier holding bought at $1.20.

Yip, the cockles of my heart were much warmed when I looked at my portfolio's performance at about noon today.

I am an investor type - I tend to buy on fundamentals, especially a company's ability to pay sustainable dividends, and I often hold for a long time. Being a high-conviction investor, I do not use stops. To force myself to take enough interest in a stock and investigate it, I like to hurl serious money at a play. Serious for me is $30K or more. I have 100,000 NWH at an average of $1.344, so that is an above average punt based on high conviction and a dividend yield on my price that allows me to wait a long time for a correction - years if necessary.

The main purpose of looking for dividend is to reduce the number of stocks that my trawl throws up as a short list, so I never set the dividend-yield filter high. This knocks out the Ponzi stocks whose main reason for being is to pay those in the inner circle fat wages funded by shareholder subscriptions. Secondly, a good dividend yield allows me to hold a share for a long time if I think Mr Market has got it wrong. A high sustainable dividend yield may simply be the corollary of a low SP, so if I am right in my decision to buy, I get a good yield, plus a capital gain down the track.

Since I have adopted the above investing policy, I seem to have done better than in earlier times, but this could also simply spring from timing. One has to be aware of the hoary "Post hoc, ergo propter hoc" fallacy.

 

[PinguPingu]

Looks to be at a crossroads with the short term up trend from July just hanging in vs the long term down trend from early '12.

 

[Sergio]

how about now?

i see resistance has become support?


i might be wrong though......

 

[odds-on]

The continued (and justified) negative sentiment in the mining service sector will mostly likely continue and maintain a negative pressure on the SP of NWH. The recent company announcements have not changed my view on NWH and I intend to continuing holding until earning guidance/financial report. The temptation is to start using the negative sentiment to incrementally average down into NWH whilst being realistic about market valuations that NWH will achieve in the next 6 months or so (an earning announcement/financial report will be very damaging in the current market)

Has anybody got any experience in these type of medium term averaging down situations? I am sitting on some cash and there are no other opportunities that take my fancy.

I got it wrong with ASL, fingers crossed I get it right with NWH