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robbo
29-08-2006, 11:36 AM
Austin Engineering (ANG)

Will Write quickly on this one: AUSTIN ENGINEERING (ANG) -- 10.35 EST (Australia) as this Austin Engineering (ANG) .....

.....imo is one of the best opportunites (alongside Dulhunty Power, DUL and ISS, and ite) -- on Australian bourse, imo :)...

By this I mean in terms of current just released Key Performance Indicators; and Future High Growth Prospects; imo, in terms of being both a very, very High potential[:p]--

And, imo, potential to be a very quick Growth Stock and being massibvely Undervalued.

Results for (ANG) are just out now.:)

Will re print these excellent (ANG) results shortly. :)

Kindest Regards,

Robbo :)
DISCLAIMER
Views expressed in this email and/or internet correspondences, are my tentative thoughts and opinions only. These views are not to be read as being, or forming…. any form of a recommendation; of any sort whatsoever. Rather, they just simply personal opinions, and are NOT financial advice. Furthermore, these views are unwarranted and ought not to be read, as other than personal opinion and speculations, and are not warranted in any way whatsoever, either expressed or implied, for their accuracy, veracity, or likely predictive outcome. Furthermore, these comments are highly subjective and prejudiced by the writers own opinions and outlook. Therefore these views may be prone to errors, as they have not been checked by a third party, and are possibly incomplete and/or inaccurate. The opinions expressed here; are strictly on a “Without Prejudice” basis only. These personal subjective thoughts herein expressed, are only one view among many, and at best; are only the author’s whimsical thoughts, impressions, and intuitions. Obviously, as with all opinions, they are open to discussion and refutation, as well as consideration of other interpretations and review. For any investment decision, always do your own separate investigations and research, and always seek your own qualified and authorized third party independent financial advice.

Kindest Regards,

Robbo :)

----------------------- ends ---------------------------------------

ohmyme
29-08-2006, 11:55 AM
Totally agree Robbo. Although ANG reported a 30% increase in net profits from ordinary activities, they reported a >+250% increase in net profit with help from the sale and leaseback of properties they owned.

If you extrapolate what they have achieved in the second half to get such a strong normal result ie net profit of $1.6million, ANG is tracking well in excess of $4million net for the full year moving forward, from ordinary activities.

In addition their latest acquisition, also include some land. Which means there is scope for ANG to sell and leaseback that propery as well. I would much prefer ANG to have their capital tied up in their operations and not in deadweight property (although property has been a good investment of late).

RCR is the obvious candidate to benchmark ANG against. RCR trades on historical earnings of 15. So I would suspect that forward/historical earnings for ANG of around 10 is a good first price target. This means a market cap of $40million or at least another easy +100% return. If they were to trade in line with RCR, then there is even more scope.

cheers

robbo
30-08-2006, 02:14 PM
Austin Engineering (ANG)

Hi there ohyme,:)

Austin Engineering (ANG) is, imo, one of the TRUE value opportunities, (with ite, DUL, ISS, AEC, MMS, CDD, IMD, CCP,IPN, GBT, TOX, etc etc....

Good news to seee Austin Eng. (ANG) breaking into at least now... a bit of a comfortable nice slow trot.....

And nice to note; that (ANG) is now on the Move..... with trajectory nicely traversing.... Up & in therefore, in the Right upwards Direction .

Although, imo of course, this commencemnt for (ANG) IS: only at the start of the start....

Overall (ANG) is Up about 15-18 % from the 40-41 cents mark only one (1) weeks ago!


Do, imo, See north of .90c for -- Austin Engineering. (ANG). :)

Good One ohyme.:)

Anyway ohyme, Just some “food & crownies for thought -- from, .... The Pub. ”

Kindest Regards,

Robbo :)

DISCLAIMER
Views expressed in this email and/or internet correspondences, are my tentative thoughts and opinions only. These views are not to be read as being, or forming…. any form of a recommendation; of any sort whatsoever. Rather, they just simply personal opinions, and are NOT financial advice. Furthermore, these views are unwarranted and ought not to be read, as other than personal opinion and speculations, and are not warranted in any way whatsoever, either expressed or implied, for their accuracy, veracity, or likely predictive outcome. Furthermore, these comments are highly subjective and prejudiced by the writers own opinions and outlook. Therefore these views may be prone to errors, as they have not been checked by a third party, and are possibly incomplete and/or inaccurate. The opinions expressed here; are strictly on a “Without Prejudice” basis only. These personal subjective thoughts herein expressed, are only one view among many, and at best; are only the author’s whimsical thoughts, impressions, and intuitions. Obviously, as with all opinions, they are open to discussion and refutation, as well as consideration of other interpretations and review. For any investment decision, always do your own separate investigations and research, and always seek your own qualified and authorized third party independent financial advice.

Kindest Regards,

Robbo :)

robbo
06-09-2006, 12:06 PM
Austin Engineering (ANG)

My own view, is that this share, Austin Engineering (ANG), will see north of 85 cents by end of October, and be over 65 cents by the next approx, 2-3 weeks.

>>> ..... Here then, are the plain facts why.


The Return on Investors Equity (ROE) for Austin Engineering (ANG) has increased a whopping, 225%, and is now ...
>>>>.... a very high (ROE) of: 62.4%.[:p]

For a company, ie: Austin Engineering (ANG)--- with a Low Market Cap of only a mere 19 Millions and a low PE of ONLY 4.4 and a PEG of .02, this is almost un heard of rare value, imo.:)

Now compare this Growth Company’s (Austin Engineering (ANG) -- current PROFIT MARGIN ... >>> Which as an engineering company’s Profit Margin on comparo, with other peer ASX lsitedd Engineering companies; like RCR Tomlinson (RCR) (which, imo, is an excellent co. in its own right), Downer EDI (DOW) , Monadelphous (MND) , Leighton (LEI) etc etc…

Austin Engineering (ANG) Profit Margins.... are, approx Double the Profit Margin, that of its peers…at 11.8% . [^]


Austin Engineering (ANG) pre tax profit increased by 280%

The Return on Equity (ROE) increased 225%. [:p]


The earnings per share growth, for, Austin Engineering (ANG) increased by 240% and over the last two (2)-- consecutive years on average increased by a compounding 136% re: Austin Engineering (ANG)'s, increased Reported Earnings, which for Austin Engineering (ANG) is, now at earnings per share of eps 10.52 cents per share (cps) ….

It , imo, simply is hard to find any other earnings based stock with these excellent Financial Successful Results; …[^]:)

AND with Austin Engineering (ANG); at such a under valued Low PE and high earnings record now fully booked and it has huge upside still.

Finally from a free Strong Cash Flow indicator point of view, look at Austin Engineering's (ANG) Fully Franked Dividends announced.

Yep,a strong and high, 4.5% Dividends, based on the current (ANG) share price !! and yep, it IS, (Fully Franked).. :)

Imo, this extremem value, on offer in the form of: Austin Engineering (ANG)....will not last very long....;):)


Kindest Regards,

Robbo :)

DISCLAIMER
Views expressed in this email and/or internet correspondences, are my tentative thoughts and opinions only. These views are not to be read as being, or forming…. any form of a recommendation; of any sort whatsoever. Rather, they just simply personal opinions, and are NOT financial advice. Furthermore, these views are unwarranted and ought not to be read, as other than personal opinion and speculations, and are not warranted in any way whatsoever, either expressed or implied, for their accuracy, veracity, or likely predictive outcome. Furthermore, these comments are highly subjective and prejudiced by the writers own opinions and outlook. Therefore these views may be prone to errors, as they have not been checked by a third party, and are possibly incomplete and/or inaccurate. The opinions expressed here; are strictly on a “Without Prejudice” basis only. These personal subjective thoughts herein expressed, are only one view among many, and at best; are only the author’s whimsical thoughts, impressions, and intuitions. Obviously, as with all opinions, they are open to discussion and refutation, as well as consideration of other interpretations and review. For any investment decision, always do your own separate investigations and research, and always seek your own qualified and authorized third party independent financial advice.


Kindest Regards,

Robbo :)

----------------------- ends ---------------------------------------

ohmyme
06-09-2006, 01:53 PM
As you know Robbo I am very bullish on this one. I think your price targets are very conservative. I wont be selling any shares for less than a $1.00.

cheers

David Hardman
06-09-2006, 02:51 PM
Robbo

Does look the goods. Lets just hope the mining boom continues.

Hardman got set this morning.

Cheers

robbo
07-09-2006, 12:02 PM
Austin Engineering (ANG)

Interesting to observe that some brokers or ...who-ever -- [?]are artifically stacking the Sell Side depth to get their funds and other mates in at or below # 50 cents.....

To an extent, they are , imo, trying to transfer wealth from the mums and dads ..... to the funds & instos........

This frankly; is the bit I do not like,[}:)] as the smaller guys, imo are going to miss the very high significant gains... by selling so so short....

More interesting to see some investors--- "falling for it".

This is very unfortunate imo....

All (ANG) investors need to do; is just spend a moment looking at the (ANG) financials. Very hard --imo-- (impossible ?? ;)[?]:))-- to find another sub $ 21 mill market cap stock with these sorts of consistent profits, sales revenue growth, return on equity growth, and earnings growth, and Profit Margins almsot double industry sector average ....

However, fortunately imo, these brokers..... imo, Will not be able to do this (artificaly supprseeing the share price) for long however, imo, as the Results and immediate growth potential for Austin Engineering (ANG) speak volumes on its own cold hard rational intrinsic merits/facts.

Expect the next break for (ANG) into 55c to 57c plus--++ -- any day now actually...

Kindest Regards,

Robbo :)


DISCLAIMER
Views expressed in this email and/or internet correspondences, are my tentative thoughts and opinions only. These views are not to be read as being, or forming…. any form of a recommendation; of any sort whatsoever. Rather, they just simply personal opinions, and are NOT financial advice. Furthermore, these views are unwarranted and ought not to be read, as other than personal opinion and speculations, and are not warranted in any way whatsoever, either expressed or implied, for their accuracy, veracity, or likely predictive outcome. Furthermore, these comments are highly subjective and prejudiced by the writers own opinions and outlook. Therefore these views may be prone to errors, as they have not been checked by a third party, and are possibly incomplete and/or inaccurate. The opinions expressed here; are strictly on a “Without Prejudice” basis only. These personal subjective thoughts herein expressed, are only one view among many, and at best; are only the author’s whimsical thoughts, impressions, and intuitions. Obviously, as with all opinions, they are open to discussion and refutation, as well as consideration of other interpretations and review. For any investment decision, always do your own separate investigations and research, and always seek your own qualified and authorized third party independent financial advice.


Kindest Regards,

Robbo :)

----------------------- ends ---------------------------------------

mark100
07-09-2006, 12:52 PM
Bell Potter rate this one highly. They estimate its trading on a FY06 PE of 6 and have a 73c price target

edison
08-09-2006, 07:44 AM
Wise-Owl also had this as spec buy in July and last week rated as Add as well with 12 months price target of 75c.

robbo
08-09-2006, 11:38 AM
Austin Engineering (ANG)

Nice to hear about wiseowl and Bell Potters ....

But, more importantly Mark100 & edison;;)

What do You guys ....conservatively --(based only on the current (ANG) financial Results, let alone forward earnings)-- calculate Value -- Austin Engineering (ANG)-- to be worth right now...?? [?] [?]

Kindest Regards,

Robbo :)

ohmyme
08-09-2006, 02:08 PM
Interesting question Robbo. Based on historical operating earnings, you could argue that ANG is still a bargain at the moment. $1.6million net, on say a PE of 15 gives a market cap of $24million, add in their cash which is around $5million, gives $29million, currently ANG is $21million so we still have 38% to go, or a share price of 75c.

However we all know markets look forward. Conservatively use PE of 10, my forecast points to an operating net of $5million (extrapolated from the second half of earnings). This leaves a market cap of $50million, or a $1.30 share price.

Hmmmm ANG is getting re-rated as we speak, long way to go though.

cheers.

tommy
08-09-2006, 03:36 PM
What da,

Up 9% today! Yay[:p]

robbo
08-09-2006, 04:59 PM
Austin Engineering (ANG)

Hi Tommy,

When I last had a peek, (ANG) was 14.3% Up....:)[8D]

Trust your wrapping up those cold crownies; to send to .... you know where.... As we speak Tommy... ;)

Regards,

Robbo:)

tommy
08-09-2006, 05:10 PM
Hi robbo,

Yup, I owe you more than a few crownies mate[8D]

Thanks for opening this thread, but ANG is still grossly undervalued so let's celebrate in a few months time when this puppy reaches $1[:p]

stephen
08-09-2006, 05:48 PM
It's hard to do a DCF that isn't stupidly high (eg try a discount rate of 15% and virtually no growth and you still end up north of $1).

So, what can go wrong in the engineering business?

mark100
08-09-2006, 06:12 PM
stephen,

Engineering contractors are low margin businesses and a cost blow-out on a single job can wipe out a year of profits (ie DOW). So in my view, mis-pricing of fixed contact jobs is the biggest risk for a player like ANG. This can be made worse by a shortage of skilled workers etc. Because of this, I don't expect a company of ANG's size to trade on a high PE.

On the plus side, ANG is exposed to the non-residential construction and mining sectors and the outlook for these is still robust.

Mark

David Hardman
08-09-2006, 06:23 PM
quote:Originally posted by stephen

It's hard to do a DCF that isn't stupidly high (eg try a discount rate of 15% and virtually no growth and you still end up north of $1).

So, what can go wrong in the engineering business?


Wage pressures could hurt ANG. They employ over 280 staff in markets/regions that have major skill shortages.

robbo
09-09-2006, 03:16 PM
Austin Engineering (ANG)

... ... Hi Mark,

Good points, and thanks for expressing your thoughts; & reflections re Engineering "profit margins"; future earnings security & therefore reflections for the likely (ANG) PE rating for Austin Engineering (ANG).

Looking through the following Engineering Companies it is indeed interesting to see side by side; the enginering firms on the ASX, vis a vis their: EBIT "Profit Margins" front....

(1) Downer EDI (DOW) -- 3.9 %

(2) Leighton (LEI) - 4.37%

(3) RCR Tomlison (RCR) -- 6.71%

(4) Monodelphous (MND) -- 7.7%

(5) Worley Engineering (WOR) -- 8.1%

(6) Cardno (CDD) -- 9.7%

... >> .. And of course then there is:

(7) Austin Engineering's(ANG) EBIT profit margin: which is: 11.79 %

... And so; why is this, especially given (ANG's) low market cap, and expectation as they get scale (ANG) will actually increase evn more thier operating and EBITA Profit Margins ....

The answer, imo, primarilly lies in the fact that Austin Engineering does NOT rely solely on Competitive One Off low Margin tenders...

There are numerous reasons for this, and some of those reasons; lie in the proprietary technologies inherrent within the ANG intrinsic business itself....(example: Austin’s unique advanced welding technology...-- Austin’s Chairman Mr Peter Fitch said that:

“Winning this important overseas project against international competition indicates the ....>>> high level acceptance of our robotic welding technology ....<<<< and an endorsement of our unique competitive capabilities on a world stage.

As a recent announcment on the ASX also commented:

"It also puts us: (Austin Engineering (ANG)--) in a strong position to tender successfully for future opportunities to supply international smelter projects”.-- at superior profit margins..... ) ...."

And so Mark, exactly What sort of bottom line EBITA profit margins be on these Omanian (Middle East) projects be for ..... Austin Engineering (ANG)??


Austin's share of the total revenue from the Sohar (Middle East in Oman -- )-- contract is expected to be in the order of US$5.5 million and have a before tax net Profit Margins of: >> 15%.


Austin Engineering (ANG) Profit Margins are significantly above other engineering firms.... also due to ..... Innovation, Licenced new technological applications; and somee capex on Research and Development.

This is evidenced by what is clearly contained in the Media Releases and the published Annual Reports....


From the (ANG) Yearly ASX published Preliminary Report.

"Research and development is a key objective in the company’s strategy and during the year the company continued to invest in this area with a total of $0.43m spent.

The company is now seeing tangible results from this investment in the form of increased margins and the sort of contract which Austin Engineering wins."

Mark, part of Austin s strategy; is not to be only reliant mainly on "one off " low margin tender contracts, but instead to develop multi- pronged revenue streams .... and to only take on contracts at about the 15% mark... well above the Industry average.....

Mr Fitch, CEO of: Austin Engineering (ANG) said,

‘I am pleased that the overall corporate strategy that we advised to shareholders at the last AGM is on track.

We have delivered on a major part of that strategy, namely a contract to supply an international smelter project using our advanced welding technology.

As the CEO also says in the Report:

This (the type of Business Model)-- is unique and addressesses specifically the Revenue and Profit Margin issue.

[b][i]" Austin

mark100
09-09-2006, 04:07 PM
Hi Robbo,

On my numbers ANG's EBIT margin for FY06 was 5.54% and in FY05 it was 5.2% which puts it more in line with other listed contractors. I used these numbers:
FY06 Revenue: 48.7m EBIT:$2.7m
FY05 Revenue: 38.3m EBIT: $2m

I think you may be including the one off profit before tax of $3.9m due to the sale and lease back of a property.

Also I wouldn't compare ANG against the likes of WOR and CDD. In my words, CDD and WOR are 'consultants'. They are office based businesses that do the engineering designs and project manage engineering designs. Much less exposed to cost blow-outs.

ANG and the others are 'contractors' that actually go out and source the blue collar workers, buy the raw materials and build what has been designed.

Nevertheless, ANG is still very cheap.

cheers
Mark

ohmyme
09-09-2006, 06:52 PM
Mark ANG is a story of 2 halves.

The first half:
Revenue: 23.6m
EBIT: -500k

The second half:
Revenue: 25.2m
EBIT: 2.8 million (Total year was 2.3 have to add the 500k loss)
This is an 11% EBIT margin.

I think ANG can maintain this moving forward.

cheers

mark100
09-09-2006, 07:38 PM
Hi ohmyme,

Yes I'm aware of the first half loss but we can't just cherry pick the best half and assume that will be repeated indefinitely. The first half loss illustrates what can happen when you have cost overuns.

I see in the Bell Potter report they are forecasting an EBIT margin of 7.6% for FY07.

If they can maintain an 11% margin the FY07 result will be a ripper!

cheers

ohmyme
10-09-2006, 08:11 AM
I think you will find that ANG's strategy of focusing on higher margin business through their welding technology, and their latest acquisition are reflected in the second half. Its not just a case of cherry picking the best half. Anyways time will tell. Like you said if they acn achieve higher margins and grow revenue, then ANG is a super bargain.

I know that you know this industry well Mark, so I wont be writing off your statements, and understand the risks. Thanks for your feedback. I hope you managed to grab some. A lof your picks have been doing very well lately.

mark100
10-09-2006, 12:24 PM
ohmyme,

I have some thanks to your tip as you know! And I'm also very optimistic about their prospects.

cheers

robbo
11-09-2006, 08:56 PM
Austin Engineering (ANG)

Lovely, Lovely opportunity.... for the Big Fish to buy scarce Austin Engineering shares from the silly small fish today....;):)

Unfortunately .... for Some of the irrational (imo) smaller fish that is, ..... the few available Austin Eng. (ANG) Bargain scarce (Austin Engineering Shares) stocks still on offer that were until today; previously owned by the smaller (ANG) shareholders (fish)--

( do Remember guys, : Their are Only a limited scarce, tightly Held onto, >>> 39.8 Million (ANG) shares only on issue <<< ie (ANG) at these prices will Be super scarce presently imo ....

... >>> ... Why so Robbo?

Because they Have the Rare Special Seven qualities, so Envied by all Value Hunting Investors

As a oh so rare Combination .... of:

Providing massive Under Value Safety, And massive Out Performance "proven in the bag now"-- And a great future with a full Order Book And Fuly Franked $$$ Dividendds paidi now to Share Holders.

(i) They (ANG) are for now, a really super Low ...Market Cap--so High Capital Gain is very Realistic--like 3-5 times what you paid inside 10 months and maybe even sooner...

(ii) They (ANG) pay Fully Franked healthy Dividends now which prvoes the health of the Balance sheet and thier free cash flow to funds and to the Broader Market generally.

(iii) They (ANG) are still ... massively Under Valued ....on any Financial mathematical Measure --PE is now still under 6 and PEG is Under 0.02% !!

(iv) They (ANG) have global alliances and global manufacturing engineeering tie in with the scope and reach of thier operations

(v) They have the runs on the board having beeen In EBITYA prfoit and consistnetly growing for Five (f) consecutive Reporting Periods. Earnings/Profits ahve increased significantly each and every time Compounding.

(vi) They have a Unique Niche in Engineering & Manufacturing and not juat as a Contractor !!

(vii) They have licenced Technology which given them a Uniq Selling Proposition and pricing Power and provides a Knowledge Capital and Licence providing a Bareier to Entry, in the High Demand Global markets, and multi national Customers they serve and in which they operate. .


So for these reasons and many more Austin Enginering(ANG)..... is ..... and will, imo, be a very tightly held ---- precious bargain Growth stock .... imo --as what is still avaiable of Austin Enginering (ANG) stock, that is still left on the share Register; will not be, imo, the situation for very long.... !! [:p]:)

-- And sadly.... some of these "sells"..... of (ANG) Austin stock today; were.... imo ....literally--- "snatched"-- from the smaller holders;..... and gulped down very quickly today ....by the Bigger Players !! [:p]

And we can see; that is exactly what happened !!

----(which imo, was very sad for the small fish).

... Here is the evidence of this fact below:

ie: at 10.40 am about $24.5 K was was sold from one irrationally scared small fish to one relaxed bigger fish, at 12 noon approx 28K was sold from one irrationally scared small fish to one relaxed bigger fish.....

And..... at the End of today (4.10pm) ; the brokers had cynically persuaded imo, .... [}:)]-- thier vulnerable irrational scared small fish (clients) --- to go & off load ....their scarce precious under valued Austin Engineering (ANG) Shares .....to just one relaxed Bigger hungry fish -- who contentedly -- like a big Groper; Gulped down a nice bag of $92,000 dollars worth of (ANG) .... right on the close ....[}:)] ;)

So I hope, and Do trust..... that you gals and guys; were not "sold" on the idea to foolishly.... imo.... do this --(sell your scarce under valued Austin Enginnering stocks)-- by your broker !!

This share (ANG) , imo, is ..

Snagage
11-09-2006, 10:50 PM
This thread got me excited enough to read through the past two annual reports and do the figures for myself.

I personally think the company has alot of potential with mining engineering exposure and what appears to be a technological advantage in automated welding. However, you guys need to be careful with some of the figures thrown around here. Without the once-off profit from the sale and leaseback of property, the FY06 NPAT is $1.62mil. That's a diluted EPS of around 3.9c and assuming the price is 55c, a P/E of around 14 and diluted EPS growth for the year of 28.5%. Austin made no secret of this and provided adjusted profit figures in the media release that followed the results.

With the exception of those posted by mick100, I fear most of the figures and comments posted here are based on EBIT and NPAT figures inclusive of the once-off profit. Anything calculations to do with margins, ROE, P/E, PEG would have been blown out of proportions. Appears to be a nice little company, but definitely not the bargain of the century. A little caution is needed here I think...

ohmyme
11-09-2006, 11:08 PM
Snag, I am well aware of the difference between EBIT and NPAT. In my last post I highlighted the fact that they generated $2.8million EBIT in the second half alone, to generate that $1.6million NPAT for the full year. The first half ran at a loss based on some poor project execution / contractor price management.

Also keep in mind that their latest projects have been stated at 15% margin, and their latest acquisition was bought on healthy margins as well.

Moving forward ANG is going to be producing some very healthy margins and increased revenue growth from the last financial year. Also their latest acquisition included more land purchases. So there is scope for them to sell and leaseback the property this financial year as well.

cheers

ohmyme
11-09-2006, 11:18 PM
For eg:
Their latest acquisition Kaldura Industries:
Revenue 04/05:$4.7million
EBIT:$1.26million
EBIT margin: 27%

They have flagged that they are going to ramp up this business. Do you think that revenues wont grow moving forward? Even if the margins are squeezed a bit.

In addition:
The Sohar Aluminium smelter contract was won and announced the following:
Revenue of $US5.5million over 2 years and a corresponding 15%NPBT margin. They have stated that the profits will be spread over 07 and 08 evenly. That equates to $550k profit before tax straight on the bottom line for each year. Add in the $1.2million EBIT from the Kaldura, plus all their existing businesses. Not hard to see where my forecast of +$5million NPAT (they have close to zero debt) and yes I have assumed 30% tax rate. Even if they only achieve $4million they are a bargain.

cheers

Snagage
11-09-2006, 11:35 PM
Hi ohmyme

Agreed Kaldura Industries looks good as does the Sohar Aluminium deal. I wasn't trying to say that the company won't improve or that your figures were unachievable (looking back through the posts I can see that you haven't contributed to the hyperbole). I was just trying to point out some "bad" numbers used in this thread so hopefully people don't jump in with the wrong expectations (such as expecting a 100%+ NPAT growth year on top of the FY06 headline figures).

I agree that it looks to be a good company and best of luck in holding.

robbo
12-09-2006, 05:36 PM
Austin (ANG)

Ahhh ......... 'Tis time again, for a Crownie or three....[:p]

Today, nearly $400K traded .....hmmmm what does this signify...??

.... me-thinks, 'tis.... >> yet another day .... and yet... another story of .....AUSTIN Engineering (ANG) (see my last post) -- successfully transferring stock-holder wealth; .... from the minorities ....to the Larger Players....;):)
.... ..... ------------------------- ...........

"It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately to people or it doesn't take at all.

It's like an inoculation.

If it doesn't grab a person right away, I find that you can talk to him for years and show him records, and it doesn't make any difference.

They just don't seem able to grasp the concept, simple as it is.

A fellow like Rick Guerin, who had no formal education in business, understands immediately the value approach to investing and he's applying it five minutes later. I've never seen anyone who became a gradual convert over a ten-year period to this approach. It doesn't seem to be a matter of IQ or academic training. It's instant recognition, or it is nothing."

Quoted directly from: Warren Buffett ....(from his annual report/ speech ....at the 2005 Berkshire Hathaway Annnual Meeting).

Kindest Regards,

Robbo :)

David Hardman
13-09-2006, 01:40 PM
quote:Originally posted by davidrob
.... me-thinks, 'tis.... >> yet another day .... and yet... another story of .....AUSTIN Engineering (ANG) (see my last post) -- successfully transferring stock-holder wealth; .... from the minorities ....to the Larger Players....;):)


Robbo

There has been a fairly active "large player" happy to drop 100k parcels into the market over the last few days. Case in point - Two 100K orders placed at 52 (and executed) and 54 this morning. For a small stock like ANG these are fairly large orders.

Our 100k buyer at 50 is now off the boards as well.

Not sure how you are working out which way the wealth is being transferred.

Are you suggesting that the larger players/instos are artificially keeping the price down so they can fill their boots at lower prices?

robbo
13-09-2006, 04:56 PM
Austin (ANG)

Yep definitely, imo Dave.

Very evident when you look at the totatilities of Cross Trades and also the ratio of trades on 12/9, 11/9, 9/9 and 7/9.

Expect a big Road Show with three sponsoring Brokers in October is what I hear...but the specialist micro cap Funds want to: "get set" first...
and waht you dewcribe is defintely a bit of deliverate churn to scare down the punters...

Bottom Line.

The excellent financial growth Results, imo, for Austin (ANG) plus + the now 3 Buisneses in One going Forward......tell their own Obvious Growth Story...

imo Austin Eng. (ANG) is a Classic fund driven Candidate for significant re rate when the time is right...and ripe for the inside track.... to be already ensconsced...actually they are a but pissed they were not set at low-mid 40's...but my thoughts this is a re rate to about 52-- 55 millions Cap (share price about $1.20-$1.30?? range)-- in first instance/stage..... over the next 4 weeks to 9 weeks time frame...

Kindest Regards,

Robbo :)


DISCLAIMER
Views expressed in this email and/or internet correspondences, are my tentative thoughts and opinions only. These views are not to be read as being, or forming…. any form of a recommendation; of any sort whatsoever. Rather, they just simply personal opinions, and are NOT financial advice. Furthermore, these views are unwarranted and ought not to be read, as other than personal opinion and speculations, and are not warranted in any way whatsoever, either expressed or implied, for their accuracy, veracity, or likely predictive outcome. Furthermore, these comments are highly subjective and prejudiced by the writers own opinions and outlook. Therefore these views may be prone to errors, as they have not been checked by a third party, and are possibly incomplete and/or inaccurate. The opinions expressed here; are strictly on a “Without Prejudice” basis only. These personal subjective thoughts herein expressed, are only one view among many, and at best; are only the author’s whimsical thoughts, impressions, and intuitions. Obviously, as with all opinions, they are open to discussion and refutation, as well as consideration of other interpretations and review. For any investment decision, always do your own separate investigations and research, and always seek your own qualified and authorized third party independent financial advice.


Kindest Regards,

Robbo

----------------------- ends ---------------------------------------

wayman51
19-09-2006, 03:34 PM
Greetings all !!!
This is my very first post on ShareTrader! ..... so just a question regarding SP of ANG .... A big jump after initial posts on this thread, then a fall back to around 51c. Was the jump just initial enthusiasm followed by a cold shock of reality, and how significant is the rise and fall of the price of crude oil on a stock of this nature?
If anyone can be bothered ..... just a quick comment would be helpful. Thanks very much in advance (if any.

robbo
19-09-2006, 04:36 PM
Austin (ANG)

Welcome Aboard!

Zero influence on Oil Price....

Market Volatility is caused by skittish Share Traders.

Nothing More. Nothing Less.

Market Re Rates are caused by "Market Making" larger funds.

Bottom Line.???

Be Patient and relax.

Regards,

Robbo:)

wayman51
19-09-2006, 08:18 PM
Greetings Robbo,
Thanks for your prompt reply ! I have much appreciated your very clear and highly informative posts both here and elsewhere that I've read to date. You are extremely generous in sharing your obvious expertise with others, especially rank newbies, such as myself. I'm still only dabbling in the market ... "big toe in the ocean" type approach, so to speak ... again, many thanks

WASL
19-09-2006, 08:53 PM
Hi Robbo & Welcome Wayman (there cannot be 50 other surely??).

I agree with Robbo on ANG. Notice the players are careful not to let the market get (or stay fro long) below ~$50-51.

I have a few and am hanging on. Do not forget the $0.02 dividend which is still pre-ex.

StockDoctor rates them as "Stong" i.e. "low financial risk"

Cheers and Good luck as Always


WASL

wayman51
19-09-2006, 09:02 PM
Greetings to you WASL ... thanks for your welcome ! Just between you and me, '51' relates to my age. )I'm always telling my kids that I'm 21 with 30 years experience (lol).
Thanks for your comments .. I'll check out StockDoctor ... not familiar with it yet. Will hang onto my few of ANG.
Kind regards

WASL
19-09-2006, 09:51 PM
On that basis I'd be WASL61

senor guacamole
20-09-2006, 07:58 PM
Ola People,
I am really excited about this company...Ive been looking for value companies but pickings are pretty lean usually..so was glad to discover this thread and the indepth analysis. when i researched i liked it yet more so got in today at 50.5c.
it really has been sticking around that point...but im hoping to ride this rocket up a fair bit more and the dividend in the next few days is the icing on the cake.
warning 'green' question coming up.
This 2c divedend is fully franked in Aus right....
How much of that will i get to keep being based in NZ? the whole 2c or do i get doubletaxed?

ohmyme
26-09-2006, 06:27 PM
Excellent read in the annual report today. Patience in this one will be very well rewarded. Their international contracts kick in this year, and management are very confident of increased profits and revenues this year. I have been surprised by the extent of this sell off, however it did go ex dividend the other day. Its never pretty watching all your paper profits disappear however way you look at it the numbers dont lie, and a forward PE on operating profit of around 5 (by my calcs that is), anycombined with any wiff of good news or any decent buying and the share price will hopefully return to its highs.

Nothing has changed with this one, except the price as far as I can tell.

cheers

Mothman
30-09-2006, 02:48 PM
I have taken a holding in ANG when I was alerted to this company by this thread. I had a look at the annual report and like what I see.

I am pleased to see it has rebounded on some decent volume on Friday of 520k shares.

I have been invested in resource compnaies for the last 2 years and have had some good gains and I realise these guys need to invest in machinery also, this is where Austin comes in. Hoping for 65-75c by the end of the year.

contrarianinvestor
04-10-2006, 11:10 AM
Robbo on 11/09/2006 you wrote:
"Well loook at the massively low PE ....just for a start....(ANG) has a PE of only 5.3"

From 29/08/2006 press release:
"EBIT was $2.83 million and is an increase of 38% over the 2005 figure and the operational NPAT (excluding profit from the sale of land) was approximately $1.62 million, an increase of 36% over the previous year." - [u]This gives PE of 13</u>.

My personal view:

I hope for earnings above 2M for 2007 which will be a very satisfactory result. This will give P/E of 10 on 21M market cap. This is good value although I think that your analysis is far too optimistic. (Are you trying to pump the share price with hype?)

At this point in time, any price above 60c is becoming speculative. Is is dangerous to extrapolate past results into the future. No person can predict the future. (Many people think they can though.)

robbo
06-10-2006, 03:59 PM
Austin Engineering (ANG)

Subject: Director buys (ANG) shares --again--On Market-- and response to Contrarian's last post.......

Hi Contrarian--

Couple of points, contrarian, re. your views and points about whether humans can ever seek to successfully, predict the future.

As Investors, that is what we do, and our, raison d etre-- -- ie: As Investors, we try to use the available evidence to extrapolate --the future--....--that is WHAT (hopefully--we attempt to rationally)-- Actually DO... [?]:)

The Central question is, imo, Contrarian,

-- Will the Company in Question--in this Case Austin Engineering-- Grow Revenues and consequently profits-- and at what rate...and how quickly--will it be slow or will it be exponential ... ??--

And is the answer to this question, currently correctly reflected in the (ANG) share price and Valuation currently assumed ... 'in and by'-- the Quoted current (ANG) Market Price that is reflected in the Stock Price. ...?? [?]

Obviously, my own answer is currently: "No, it is not"..

To have that answer, I have to have a "probablistic view on the future" -- Based ON sound Analysis and Research and also; Some form of Logical Hypothesis .... which is hopefully evidence based together with utilizing clear and logical pre-suppositions .....

Also Contrarian, I ought to have reasonably-- factored in and --"discounted" --- these pre-supposions (against which the hypothesis has at its Foundation and actually rests)-- Against some sort of:-- rational "Risk Tolerance" model..... and/or discounted for the future.... implied risk model ....

In this case Contrarian, this hypothesis was formulated for: My view & Assessment on Austin Engineering. (ANG) ... :)

What is interesting, imo, Contrarian, is that the ACTUAL pseudonym you chose for this Share Chat site; is:-- "Contrary Investor" ---- which in itself, implies some predictive-- "contrary view - point" -- about the future..... :)

Where I agree with you Contrarian; is on this Short Term point:

ie: Can I confidnetly and consistently; predict what will happen today or tomorrow; .....to an accurate extent ..... apropos a share prices.... direction --in the immediate 24 hour future... ??

Answer: "No, I definitely cannot ".

And again, Can I really confidently predict it categorically on a week to week basis.... ?

Again, not with any real assurance and certainty.....

However; Contrarian, When we start talking about;say, a period over 3 weeks to a month ...... then we can make an, "educated guess". ?? [?]

My answer is, In some situations, with the right amount of predictive evidence--and in certain circumstances: "Yes".

What this Sharetrader / Share Investor ..... Site, has, Contrarian, as its: real:-- “Reason for Existence” -- is Predicating and Predicting the future” in all of its various permutations .... and likelihoods... ….

I guess another way Contrarian; of --- “arguing the toss” -- Contrarian, about whether humans….... can ever…. ... Successfully predict the future with any form of higher degree of Probability – is that age old epistemological debate; within the Philosophy of Logic and Mathematics Community, about:-- Whether.....everything is just a random/Chance Cosmically divined unforseeable occurence.... which is entirely “random” and “chance” --- on one side of the philosophical argument.....

Or; on the other hand; that what the Bayesian School would say and the Actuary Profession’s and the Actuarial Scientist and /Statistician ..... Who works for a Global Hedge Fund or a Large Insure

ohmyme
06-10-2006, 05:29 PM
Some juicy stuff there Robbo as usual. I actually believe Robbo that your forecasts for ANG timeline are very conservative. I actually think that the price of ANG will be north of $1.00 this side of the calendar year 06. That means within 3 months. The logic behind my reasoning is as follows:

1. ANG will provide a profit forecast before the end of the year, I am guestimating around early December late November, maybe even mid December.
2. The forecast will confirm that based on a purely operating profit basis (ie no one-off abnormals) that they will be tracking in line with the second half of last financial year, and the probability of a result in excess of the second half of last financial year is greater than even. My reasoning behind this logic is based on some facts:
Fact A) The oversease Sohar JV Aluminium contract will be kicking in this half with operating margins of 15% and estimated EBIT of $500kUSD.
Fact B) A full half of their latest Kaldura industries acquisition will be booked, which has high margins again.
Fact C) In the financial report ANG reported a forward order book for their run of the mill business well into the next calendar year.
Fact D) Although commodities have come off the boil, investment and commitment to upgrades in the resource sector are not slowing down, when BHP and RIO committ to these major production upgrades a short term blip in the commodity prices isnt going to stop them doing the work. There are large capital expenditure committments throughout the entire sector which will provide plenty of work for the pick and shovel makers for many years yet, regardless of what commodity prices do in the short term.

With all these facts and plenty of other evidence I believe that ANG will provide a forecast to the market in the order of $2million NPAT+/- 30% for the first half. I would then expect a re-rating in the share price from its measly market cap of $20million to a market cap of $40million. This would place ANG on a forward estimated PE ratio of 10. This is still very good value. Other players in the sector trade closer to 15. So there is heaps of discount built into the valuation.

If it takes ANG 9 months to double from here I will be very disappointed. I will review my holding based on the forecasts for the first half. I think the market may not re-rate ANG because of the 1st half of last financial year being a shocker. I believe that management have learnt their lesson and will not have a repeat shocker 1st half.

The final catalyst for a re-rate is acquisition potential. Management have flagged very clearly in the report that they are on the hunt for more acquisitions, and that they have plenty of cash to do so. All the evidence for me points to a re-rate inside of 3 months. In addition there is scope for them to sell and leasback their latest mackay purchase.

cheers.

contrarianinvestor
07-10-2006, 10:24 AM
Robbo. Lets stop philosophising about future predictions. I agree with making “educated guesses" though.



quote: Some folk like me actually stating a Share Price Target. Some do not. You Contrarian are obviously in the latter camp
I never said that I don’t like you stating a price target. I said that I think your analysis is far too optimistic. I like to see other people’s viewpoint. Don’t come to conclusions so fast.



quote: Yep, I do see Contrarian, that today—one of the (ANG) directors has a view on the future of (ANG) –and has announced another $35K of on market Share Purchases in the company
I don’t see any on-market share purchase announcement on 6 October 2006. I can see Eugene Fung exercised 128,000 stock options for $38,4000 at 30c per share. He has 122,000 options left which is exercisable at 30c before 20 December 2007. You have a long way to go if you confuse exercising stock options with an on-market purchase.



quote: 2 weeks either side --- of 12 months from today. – ANG will have hit 90 cents or greater …. is My Time Line Prediction.
I hope you’re right. If they show less than $2 Million NPAT and something goes wrong with the Sohar project then I’ll probably sell at 90c (which by the way I bought 20 days before you started this thread). If they show spectacular results (2M+ NPAT) with strong orders and the Sohar project goes along nicely then I’ll be happy to hold on tight at $1 and beyond.

ohmyme
07-10-2006, 01:21 PM
Do some searches on the net mate, the Sohar project is tracking ahead of schedule.

cheers.

contrarianinvestor
07-10-2006, 05:35 PM
This project should add approximately US$290,000 to 2007 and 2008 profits respectively. That is not much. I am however excited about further opportunities that is may lead to. I am also eagerly waiting to see what they plan to do with the pile of cash.

To put things in perspective: This is a US$2.4 billion project. Austin’s share is expected to be US$11.1 million. That is less than 0.5%. It is a bit premature to assume that if the client Sohar Aluminium Company is ahead of schedule it will flow into superior profits for Austin.

robbo
07-10-2006, 09:32 PM
Hi Contrarianinvestor,

Oops -- You are absolutely correct, about the (ANG) Director simply Exercising their Options .....

Point taken .... [:I]

You are absolutely correct, and I had completely missed that on the Directors Interest Form..... :)

Must say, however Contrarian, : That the adoption.... by your good self..... of such a seemingly ‘Superior Tone’ with remarks like; --

“ You have a long way to go…” – [?][?] ..... errrr ..... I think I can do without comments like that, my good friend .... [V][V]

I mean Contrarian; “We [b]all have a long way to go -- and none more than me” – and all of us – Dare I say, even..... including your good self Contrarian; -- Are only ever granted something short ….. of a full understanding …… [?];)


Another point Contrarian; I also found your edict to:

(1) "Let's stop philosophizing about making future predictions" --- and --

(2) "Don't come to conclusions so fast"--- rather patronizing and supercilious in tone -- ....

As you are the one Contrarian; who opened the "No One Can Predict the Future Debate", by asserting stridently, the Philosophical Strong Position; "that none of us can ever deign to begin to Predict the Future ".....

Alll I was doing, in reply, was simply putting a 'counter argument' Contrarian, and backing it up with some examples of various Schools of Thought and various eminent Thinkers, that have stood the Test of Time; that attempt to do just that..... !! -- :)

Another thing about your post to myself Contrarian:

re your again rather dismissive: " Don’t come to conclusions so fast."--I can do without the "attitude" please...;)[V]

Sure.

Please Disagree with me. That is good.

Yep, I am OFTEN wrong.

Repeat, I do make mistakes.

I am as fallible as the next person.

Sometimes I make: "some whopper boo boos !!--"

My views are not without fault and I can stand corrected.

And when I have this pointed out; I will thank for doing so !! -- This is all part of the wonderful "learning process"..... [^][^] :)[8D]

But to.... from a great & superior moral tone and height; attempt to, "Lecture Me with an air of superiority", hmmmmm..... well ... maybe.... Contrarian; then.... that is not --imo-- really so cool ......[V][V]

When you stop & think about it ..... How can you know Contrarian-, -- What was the “speediness/speedy nature ” of my drawing to a conclusion.... or what indeed, was the quantum of the investigation or Research/Analysis – on which I have drawn my stated (ANG) conclusions -- ?[?]

And if those conclsions do not, "at the end of the day"-- bear scrutiny -- then let us discuss that in a friendly manner, and both benefit from the experience....

We may both progress our understanding. We may simply,respectfully..... "agree to disagree....."

Instead, at present, you are only 'assuming and guessing', to come out with such a bald claim ....

You simply have no objective or empirical basis, Contrarian-Investor, to make that sort of assertion, and rather 'airy' & dismissive remark....

Please instead, if you feel that way,then... 'fair enough'.

But then -- please, Back it up, or alternatively at the least Contrarian; please, put an alternative proposition ....... in reply-- And again please, some facts and logical argument would be really nice ....

Example: All you really need to do Contrarian -- is to say to me in reply -- something like:

...." Robbo: I personally cannot really see how you can say: " xxxxxxxxx " --- And frankly would like to reserve & suspend my own assessment and judgment about the medium term ANG prospects.....

My reasons are such a

contrarianinvestor
08-10-2006, 08:47 AM
quote:
Must say, however Contrarian, : That the adoption.... by your good self..... of such a seemingly ‘Superior Tone’ with remarks like; --
“ You have a long way to go…” – ..... errrr ..... I think I can do without comments like that, my good friend


Please don't take it personally. This is a public forum. You have a choice whether you want to read these comments or not.


quote:What other shares; do you currently like
There is a separate topic on ITL Limited (http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=23478)

ohmyme
08-10-2006, 06:20 PM
Mr contra I still think your profit targets are very low for this financial year.

My base case valuation for ANG is $30million, or 75c per share, at 51c this represents a 50% return on your investment.

Basis for base case valuation equals a forecast full year net profit result of $3million. Basis for this forecast result:

1. Last year ANG booked $1.6million NPAT from operating activities. This did include 3 months from the Kaldura acquisition. So lets strip out $200k from the result to account for this. This means last financial year ANG booked $1.4million NPAT.
2. The Sohar 50/50 JV aluminium contract kicks in this financial year to the tune of ~$400k NPAT (www.asx.com.au). So far it looks like this project is running ahead of schedule therefore I see no reason why these profits will not be booked on time.
3. Kaldura reported EBIT result of $1.26million for the last financial year (www.asx.com.au). This equals $1million net (rounded up a little bit).

So in total we have a base case result, assuming no growth, no synergies from last year to the tune of $2.8millionNPAT. This result would easily support a market cap valuation of $30million. I actually see a lot of upside to this result based on the following commentary from management:
- Kaldura: Increased capacity at Kaldura by 60% scheduled for second half 2007 financial year.
- Oman Joint Venture: “Further tenders on this project have been received by the company and there are good prospects for further work on this project”
- General: “Increase the revenue from existing range of products”
- Booming sector.
- Etc etc etc

The risk to this valuation is the obvious one of increased wage costs and input costs. Management have taken strategic steps to mitigate this risk through the implementation of robotic welding technology. This means that the same work can be done with less unskilled workers. All this information is available in the financial report. I still stand by my $1.00+ price target and a market cap closer to $50million for ANG, as well as increased dividends.

Cheers.

contrarianinvestor
09-10-2006, 09:42 AM
ohmyme, your analysis sounds quite convincing. I like it. I'm probably coy about having too high expectations due a few bad experiences in the past with other companies.

ohmyme
11-10-2006, 11:08 AM
Another interesting exercise is to peer group ANG against other companies in the same industry and at similar stages of growth/profit. You could argue that KOV was at a very similar stage last year, and it operates in the same sector. From memory (my data is at home), KOV produced a pre-tax profit around $4.5million and proceeded to command a market cap of between $30 and $38million. ANG should produce a similar operating result this year, and one could possibly argue will eventually command a similar market cap (currently only $20million). There is plenty of scope for a re-rate here (if they deliver that is).

cheers.

robbo
11-10-2006, 06:24 PM
Austin Eng. (ANG)

(ANG) Quietly continues to move back up the charts.... :)[^]

Regards,

Robbo :)

Bobbyvee
11-10-2006, 11:21 PM
Robbo,
the big difference now is that the sell side is much thinner. There no longer seems to be an attempt to hold the price down.
Cheers
Bobbyvee

robbo
20-10-2006, 12:09 PM
Austin Eng (ANG)--- ASX Announcement.

Austin Engineering -- (ANG)- wins New significant $5 Milion Dollar Contract.[:p]

This-- appointment as the winner of the Tender for the:

--'100 Tonne Dump Truck Manufacturer' --

with/for-- 'a global OEM'--is a very healthy New Deal , imo -- for Austin Engineering...(ANG)

Kindest Regards,

Robbo :)

Mothman
20-10-2006, 02:27 PM
You little Beauty ! Up 10% today :)

robbo
20-10-2006, 05:20 PM
Hi Mothman,

Yes the ticker up grade is I guess ...sorta...nice.....

But the actual Austin Engineering Business -- as a Business-- is, imo even nicer.... & even more comforting...:)

My view, is that those who are still in ANG come this next Feb/March; will have made north of 140% ++ have recevied 2 fuly franked dividend cheques; on their investment; from when this thread was begun -- about 6 - 7 or so... weeks ago...

What I quoted; from the Eureka (EKA) thread (in my last post) also, imo applies, to Austin Engineering (ANG)... Mothman !!

Kindest Regards,

Robbo :)

robbo
23-10-2006, 12:37 PM
Austin Engineering (ANG)

'How's Tricks,when ANG is now ....

travelling well... on Route 66......... at 'sixty six'....[:p][8D]

ANG -- up another 12.5% today-- to 66 cents...;)

Kindest Regards,

Robbo :)

edison
23-10-2006, 01:22 PM
Oh well someone is capping it at less than 65cents with 80000 sell order .

Anyway I will see if I can topup today :)

robbo
23-10-2006, 01:34 PM
Austin Engineering (ANG) .

Ohhhh well Edison .... indeed !! [8D]-;)

You are indeed; such- ;)-a Hard Man to please, Edison-- [:I] !!

In less than 2 months-- since this thread on Austin Engineering--(ANG) was :) started-- you have seen the (ANG) share price rise by 57.5% -- and, furthermore, (ANG) investors are also now ....entitled to, and looking forwad shortly -- a fully franked cheque in their mail box-- for an annualized-- 4.87% dividned cheque on their original (ANG) buy in price -- fully franked !! [:p]:)

So a total of around a # 61+% return on your (ANG) investment ...Edison-- ;) 7-8 weeks or so ....:)

... Enjoy ...

Kindest Regards,

Robbo :)
------------------------------------------------------------------


quote:Originally posted by edison

Oh well someone is capping it at less than 65cents with 80000 sell order .

Anyway I will see if I can topup today :)

edison
23-10-2006, 02:03 PM
Oh robbo of course I am pleased with such returns! It is more of a comment on the current market depth than anything else! I actually bought it when it was 53 cents before the ex-dividend date so I am very pleased. Thanks again for such insightful tip.

I guess we can see it as an opportunity to top up before the next leg up.

edison
30-10-2006, 11:35 AM
Suprised no one noticed ANG has reached 73 cents! ...... Robbo u must be putting too much concentration on ITE and ISS .....

robbo
30-10-2006, 12:25 PM
Austin Eng (ANG)

fair's fair Edison.....!!

only posted largish post on (ANG) -- last week--on 23/10/06-- !!

err and yep, that is 92% from the buy in at 38 cents --or at the least 72% increase plus nearly 5% fully franked annualized dividends-- for a safe, imo, Margin of Safety-- Intrinsic Value Business Operation -- with growing healthy profits/earnings/low pe--and a Return on Investor's Capital of 62% (R.O.E.)-- ++ .... on this Investment Grade stock... in only 2 months--since this ANG thread began...[:p]:)

Edison,the primary reason I did not go so hard on encouraging consideration of INvestment in the this stock--(ANG)--although I was rather detailed, direct and straighforward if you trawl back through the posts on this (ANG) thread-- ....

..... Is that some of the other sharetrader subscribers.... thought I was ramping it -- (ANG)-- ... which I was not...

Edison, perhaps, An intereting exercize is to read what some subscribers..... such as 'contrarian investor' ....were saying only 6 or so weeks ago about my posts on this (ANG) thread....

For just ONE example this is contrarian investor on this thread on 4/10/06--

Robbo, ..."I think that your analysis is far too optimistic. (Are you trying to pump the share price with hype?)

At this point in time, any price above 60c is becoming speculative. Is is dangerous to extrapolate past results into the future. No person can predict the future. (Many people think they can though.)
[/quote]..."

Edison...

the above quote, by Contrarian investor, saying I am trying to 'hype the ANG share price" -- waht you are saying is dangertous-- and that.... 60 cents......is about as high as (ANG) ought to go....

....is... I might humbly submit and add, .... totally unedited and not embellished....... No, Not one single iota....of editing.... from the ContrarianInvestor post of 4/10/06....

Edison, There were, many more,---- 'let's now take cheap pot shots' like this... and equally unresearched .... 'pour scorn on Robbo's stock tips" -- 'posts' like this one-- on the (ANG) and other threads !!

Edison, is this some form of 'tall poppy syndrome...??--"

The data and facts, Edison, are that (ANG) is still on a historical PE of only 7....AND is still in my view --at mid 70's still very undervalued....

The reality is, imo..... Edison, is that I saw intrinsic value in the proprietary and Trademarked Comp Advantage giving-- Unique more effective ....Welding Technologies... ..(among other things)-- which I went to great lengths.... to TRY to explain to everyone....! [:I][:I];)...

Finally Edison, let me say this quite sincerely"

These days; with the high amount of grateful emails I now get.... from Sharetrader.com (ASX Division)-- (btw Edison, I prefer the term, 'share-investor'-- and certainly NOT sharetrader[}:)];)--)....saying things like,

Robbo coz we invested in the three or four.... 'xyz shares'--- that you told us .....might be worth us now looking into ....and worthy immeidately now.... of consideration.....our financial situation has been considerably changed over the last 5, 7, 9 or 15 months or whatever......" --now I get to spend more time with the children, or now I do not have to worry about the mortage as it is nearly paid off..." etc etc etc.... from Single Mums and dads, and students, and retirees, everyday lovely folks, etc etc etc....-- who are trying to provide for thier families ----etc etc etc....

Since I started getting these 'styles of emails'--- which really frankly suprised me enormously -- I actually do these days, take my 'responsibility'--- very earnestly-- re my own research-- when I introduce a new share-- much more seriously than I used to -- say three years ago-- and if the stock is a spec-

mark100
30-10-2006, 12:37 PM
Robbo I sense your having a go at me because I questioned the margins you were assuming for ANG. Nothing wrong with a bit of robust discussion. And I still maintain that you were including the effect of a one-off property sale in your historical margin.

Anyway, as I disclosed in my post on 10 Sept, I am a shareholder in ANG and have been since 51c.

robbo
30-10-2006, 12:51 PM
ANG

No I actually... Love robust discussion Mark.... truly I do...

Just was 'having a go' at the other poster ...who directly at the time.... was not robust discussing, but instead accused me of hyping and ramping the stock-- which is why my previous post today; just gone--in reponse to Edison's post, -- actually included the direct quotations from ze....'same said poster' -- who was most definitely ..... NOT..... you... Mark !! )....

...Actually Mark, I find your views, very well 'thought through', logical and highly intelligent.....:) even if .... sometimes....their premise is not where we share common ground-- and consequently, might diverge in view-point upon!! ;):)--...

Which Mark, is okay and is terrific...:)- and what these style of forums are for ....anyway !!)...

BTW Mark, we should do a coffee v. soon, one day -- if U would like--[?]---and have a chat ....about the:-- 'hisotical versus forward intrinsic valuation models'-- think that would be great...

Kindest Regards,

Robbo :)

stephen
30-10-2006, 01:09 PM
mark100, you absolutely have to take rob up on his offer for coffee, and then report back. I want to know if he looks like the big red guy from Cow and Chicken :)

(Just kidding Robbo. I'm sure you wear trousers at all times...)

robbo
30-10-2006, 02:31 PM
austin (ANG)

Stephen, Please let me be Deadly Serious for a moment ......

None of us at The Pub, wear trousers, we are all politically totally incorrect-- and Uncle Maxie was condemned to hell fire-- [}:)][}:)]....by me-- "The Red One" and Cow/Super-Cow's ....arch evil.... nemesis....--for failing to cut down from his obligatory 4 pack a day of Benson & Hedges Super Milds..... [8D]

- I mean after all Stephen, let's fact it...-- ...my true secret sole mission in life .....as an ambivalent; metro-sexual-- sinister & other-worldy 'Red One'......-- is to seduce all you 'big teat pre-pubescent bovines' and sundry other farm yard buzzards--and 'chickens' [:o)]... into my devlish various plots and evil schemes .... [}:)][}:)][}:)]-- ;),

Regards,(from the farm)--

Red Robbo-bum-crack:D:D

corky
05-11-2006, 09:11 PM
Good to see ANG are keeping a rein on costs by using a cut price registry - the dividend notice doesn't even tell you what share it relates to!

Corky

edison
05-11-2006, 10:01 PM
Yes the dividend cheque does not tell u the share. I could not figure out what stock the cheque is related to for a while ......

contrarianinvestor
17-11-2006, 01:04 PM
quote:Originally posted by KW

...up 10% today :-)

I recommend you stop watching daily share price movements and study the business instead. I don't see any significant changes in ANG's business since the share price was on 35c.

"If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."- Warren Buffet, 1997 Chairman's Letter to Shareholders

senor guacamole
17-11-2006, 01:08 PM
cold, clinical, very valid point contrarian...
i was pretty happy about it too, must stop watching the ticker.repeat 100x.

David Hardman
17-11-2006, 01:50 PM
Looks like the comments in the chairmans AGM speech has got people interested.

Last year ANG profit before tax was 2.3m. We can probably expect at least $6m based on the comments made below.

"In terms of current year guidance, based on the first four months of trading we are expecting a first half result in the range of $3.25 to 3.75 million profit before tax. With the current work-loading stretching out til the financial year end we are also expecting a strong second half."

mark100
17-11-2006, 01:55 PM
If we assume the 2nd half is similar to the first, we can expect a Full Year NPAT of around $4.55m - $5.25m (EPS 11c - 12.7c)

At 83c the stock appears to still offer good value, potentially trading on a FY07 PE of around 6.5 - 7.5.

WASL
20-11-2006, 10:31 PM
Austin Engineering

I admit to selling my ANG holding today at $0.85 (at a 68% profit in &lt; 2 months). Pressure of the book profit got too much. Will buy back in at $0.75 or less - I expect them to drift to this level prior to the next major contract win.

Good luck as always


WASL

WASL
20-11-2006, 10:37 PM
Robbo,

Have Heart Robbo,

For heavens sake just ignore the yapping dogs that are trying to nip your heels. I read with interest your postings and predictions - don't always agree but it's great to get another view on all that is going on.

Keep it up & do not worry about the puppies.

Best regards


WASL

ohmyme
30-11-2006, 02:49 PM
Good work selling out guys, and great advice Contrarian on ANG being worth less than 60c. Who started this thread again?

OneUp
30-11-2006, 03:38 PM
I think it would be a real loss if Robbo decides to stop posting.

I think robust debate is very healthy. But some of the sharper criticisms of Robbo have come from posters who just copy and paste articles, or post charts, with no fundamental analysis or insights to speak of.

Mothman
30-11-2006, 07:22 PM
Robbo is a legend. He alerted me to ANG, I did my own research, bought in at 54c - have sold and made a packet!!

Keen to buy back in at lower levels, I don't think its gonna happen though :)

stephen
01-12-2006, 11:35 AM
Did I just see $1.04? Dear lord.

David Hardman
01-12-2006, 01:27 PM
Yup.

Got in at 50cents. Enjoying the ride.

Even at these levels they are trading on a fwd PE of around 8.2

We may still see some more upside yet [:0]

Thanks Robbo!

montw
01-12-2006, 05:10 PM
Even the woman's weekly is plugging austin

http://bulletin.ninemsn.com.au/article.aspx?id=166494

Rainesy
03-12-2006, 11:07 PM
Hello All,

This is my first post on ShareTrader but I have been reading for a number of months now. I Have always enyoyed everyone's posts which are both interesting and informative.

I bought ANG shares at 50c and I am currently enjoying the north movement to $1.05 and beyond. Would like to say a BIG thank you to Robbo for getting me onto this one becuase I've made a pretty penny from it.

Regards
Rainesy

roddy
05-12-2006, 03:34 PM
Hi Rainsey
great to hear you are making a buck and welcome to sharetrader

cheers
roddy

Sauce
06-12-2006, 12:16 PM
KW; ANG i would not be too worried about the steep rise in the share price, it was severely undervalued before.

Past mistakes have taught me that its better to try and ignore the share prices daily movements and analyse the company. There are many clues in ANG's annual report about the incredibly strong position this company is in.

Undoubtedly the share price will eventually stop rising and correct itself a bit, but for goodness sake don't try and predict this and sell your holding.

Keep your eye on the *company* and make sure it continues to head in the right direction. The shareprice will follow.

Regards,

Sauce [}:)]

senor guacamole
11-12-2006, 08:53 PM
personal attacks are exactly what robbo got so het up in the first place danlupi..and he up and left.
in my opinion contrarian at least had an argument to put forward, albeit stated a little snidely...still dont really understand robbos caper, he must be the sensitve type.
cant say the same for you though...

FarmerGeorge
31-01-2007, 09:17 AM
Hope no one jumped off this one too early it's been a pretty sweet ride so far.

FarmerGeorge
26-02-2007, 05:37 PM
Yikes the minute I open my mouth she comes crashing back to earth! I'm valuing this one (optimistically i admit) at 12cps and a P/E of 12 what are everyones thoughts?

Zephyrus
27-02-2007, 04:22 PM
Report just out.

EBIT of 3.3 mill & NPAT of 2.3 mill.

robbo
27-02-2007, 05:48 PM
ang

yep, report's out......[:p]:D:D

easy decisions....!!

To Do list.

---zoooom....straght back to the Pub's hammock......open another cold crisp crownie....and....wait, hold....and enjoy....:)

regards,

robbo:)

FarmerGeorge
27-02-2007, 07:09 PM
Very nice result - maybe 12 cps for the year isn't as optimistic as I thought!

contrarianinvestor
27-02-2007, 10:28 PM
Why the negative operating cash flow? It will be nice to see a cash flow reconciliation because I can't reconsile it easily to what I see in the balance sheet. Inventories are slightly up. However it still does not explain the big difference between operating cash flow and reported earnings. Do I miss something?

FarmerGeorge
10-03-2007, 12:59 PM
Contrarian, I don't know of your background and I might be telling you what you already know so I apologise if you already accounted for this: It is very common for a business to have a difference in cash flow compared to revenue. Revenue is accounted for when it is earned so if you sell something on credit you can count it as revenue despite not having the cash from the sale. That way profits go up but cash does not. The same rule holds for expenses.
The cash balance at HY end matches the cash line at the balance sheet so there doesn't seem to be anything amiss there. The big cash outflow in acquiring Kaldura can be found on the balance sheet no worries.
That said, if you have any specific concerns feel free to air them: I have a sizable chunk of my funds in Austin so if I've missed anything I'm definitely open to hearing about it! ;) I'm still relatively new to shares so any advice is appreciated.

contrarianinvestor
11-03-2007, 10:22 AM
FarmerGeorge

Thank you for your insight. I'm actually an Engineering/IT professional although I've done postgraduate studies in accounting - a little bit of knowledge is a dangerous thing!

Your post made me think - so I attempted a quick reconciliation myself. Most of these figures are guesses based on the balance sheet difference between FY2006 and HY2007. My reconciliation approximately shows that operating cash flows are expected to be negative for this period.

xman
12-03-2007, 12:22 AM
hi contrarianinvestor,

We have the similiar background. However, I don't understand your calculation. "prepayment and other debtors" should be "+", why you put it under "-"?

contrarianinvestor
14-03-2007, 10:01 AM
quote:Originally posted by xman

hi contrarianinvestor,

We have the similiar background. However, I don't understand your calculation. "prepayment and other debtors" should be "+", why you put it under "-"?



It looks like I made a mistake by not looking at the Notes in the financial statements. Looking at note 9 in the 2006 annual report and Note 3 in the 2007 HY report, cash flow should be positive as a result of no prepayments and no other debtors anymore.

FarmerGeorge
02-04-2007, 12:57 PM
Any views on the latest acquisition? I am not familiar with the business but it seems to fit well with their current situation and needs. It was acquired at a multiple of under 4 which is also nice. I'm feeling quite positive on this one but does anyone want to put forward a case that this is just a 'diworseifiation'?

contrarianinvestor
02-04-2007, 02:06 PM
quote:Originally posted by FarmerGeorge

Any views on the latest acquisition? I am not familiar with the business but it seems to fit well with their current situation and needs. It was acquired at a multiple of under 4 which is also nice. I'm feeling quite positive on this one but does anyone want to put forward a case that this is just a 'diworseifiation'?

I don't understand the market's reaction today. There is simply not enough information to say whether this purchase will add value to ANG shares. With good management skills and a bit of luck this may an excellent strategic fit to the business in which they can expand into new markets. I don't think this is diworsification. If they bought a business manufacturing computer memory chips I would have started to worry.

EBIT multiple of 3.2 means jack **** to me. There is no balance sheet and cash flow information. They don't say how much they are paying for inventory and work in progress. Revenue are $10.9 Million and Audited EBIT was 2.9 Million. This EBIT margin of 26% seems very high. Are these margins sustainable in this industry?

FarmerGeorge
02-04-2007, 02:54 PM
Thanks contrarian I assumed you would play devils advocate here. Interesting points raised, much appreciated.

robbo
03-04-2007, 01:51 PM
quote:Originally posted by davidrob

ang

yep, report's out......[:p]:D:D

easy decisions....!!

To Do list.
---zoooom....straght back to the Pub's hammock......open another cold crisp crownie....and....wait, hold....and enjoy....:)

Kindest Regards,

robbo:)

------------------------------------------------------------------------------------
----------------------------------------------------------------------

Hi there all Austin Engineering (ANG) watchers....

Yep, to reiterate my previous view :--vis a vis-- the Sort of Analysis that a rigorous ANG ...C++... -- Quantum Physics and Triangulation of What exactly .... the Alternate Algorithmic probabilities of the infinite permutation & combinations vortexes in a systemic Analysis of the best Investment Strategy..... re. Austin Engineering (ANG)....would reveal....

In summary; it would still appear thus; ( as Einstein himself) would no doubt also, have postulated ......on 29/8/06 ... :


[quote]Originally posted by davidrob

ang

Yep, report's out......[:p]:D:D

Easy Easy Decisions....!!

The Currrent .....pressing .... "Things To Do List".

---Zoooom....straight back to the Pub's hammock......open another Cold Crisp Crownie....and....Wait, Hold .... and Enjoy....:)

Kindest Regards,

Robbo:)

--------------------------------------------------------------------

FarmerGeorge
03-04-2007, 04:06 PM
Robbo, an interesting list of things do: might I suggest also popping down to the mailbox in a couple weeks to pick up the dividend cheque? I note you have been reasonably bullish on ANG for quite a long time, any thoughts on the recent acquistiion? Although I'm familiar with quantum physics perhaps you could give an explanation at some level less complex than string theory? ;)

robbo
23-04-2007, 04:06 PM
Austin engineering...(ANG)

Still one of favorite High Value, growth small micro-caps--And nice to see steaming ahead at 6.3% Up-- which is still in easy 3.5 bagger territory....

got a few emails along lines of best pound for pound bargain between BSA and ANG--hard to split em...but one would ahve to say that the Market could make BSA a total market darling like EMI any time soon--imo--for a whole host of systemic Demand Driven/Media Driven reasons...

But both ANG -- ANG-- and also BSA--for different reasons-- are imo still undervalued by a long long way-- and are still short term and medium term High Opportunity/Low Risk--imo-- winners.

Kindest Regards,

Robbo:)

robbo
24-04-2007, 01:10 PM
Austin Engineering--

ANG-- imo the Funds are Also-- very attracted to non Metal--plays like Austin Engineering--with Dividend, Earnings History and Strong Revenue Growth Characteristics.....--which are also --ALSO-- like Metal plays .... directly leveraged to Mining Boom....without the metal price volatility.

In other words--they arguably want --subconsciously-- to elect-- the next tiny... prospective MND contender....(MND is now a market cap of $1.2 Billions !!)....!

***Remember ANG is still about 52-55 millions Market Cap-- for funds to mark this as a $100 Market Cap contender--would be a rather easy case to make.....

-On fundamentals-- apart from maybe CMV and ZGL-- maybe ESS--but ANG numbers are significantly stronger--side by side-- and so...imo-- it is hard ...to find many other 50-65 million range caps that would be contenders ...on this sort of Benchmark... imo....

The Bottom Line...?

Money has got to go somewhere--as it seeks to somewhat allocate rationally---laugh !!--

Watch the SUPPORT and volumes at this $1.40-$1.45 level--and watch for the move to $2.00 --over next 4-6 weeks --of course on my Personal Assessment.

Kindest Regards,

Robbo

trader-jim
29-05-2007, 04:14 PM
Nice ann today, lots of small parcels changing hands,nearly 300 trades at average size of less than 500. Is this people transferring a few to eah member of the family (including the cat and dog) so they are all elligable for the spp.

Forcast for next year works out at around 16 cps (allowing for tax and full takeup of spp) so on present PE that takes the sp to around 215. I think I'll take up the spp.

Bobbyvee
25-06-2007, 07:52 PM
This chat area has been quiet for while. Am sure there are still many investors still supporting this good lead from Robbo. His prediction of $2 has not quite come about yet however there is good volume building now. ANG are in the key growth sector and one must expect some very attractive growth figures in the uocoming reporting season. I exppect ANG to report in late August.

Are you about Robbo. I am sure you are still holding ANG.

Cheers

BobbyVee

Huang Chung
25-06-2007, 08:22 PM
Yes Bobbyvee, healthy volume and a rising share price on a down day was duely noted...

Looks like someone started buying up late last week....wonder if there is anything more to this??

FarmerGeorge
26-06-2007, 09:27 AM
Still holding as well, and applied for the full allotment in the SPP, no reply yet though. I'd decided to spend up large if ANG hit 1.50 but it never happened, a bit disappointing but happy with my lot.

FarmerGeorge
15-08-2007, 12:13 PM
Austin was punished down below 1.50 today but has bounced back. Still down for day and, I believe, represents quite a bargain. Suggest perhaps a look at balance sheet (particularly debt levels), last few announcements, and the way they have been managed over the past year or two. As a long term holder I suppose I'm biased but I certainly see a good opportunity at these levels.

Huang Chung
15-08-2007, 02:25 PM
KW, I would have thought this wouldn't be too big an issue for ANG, as their business is more about the provision and servicing of mining consumables, such as buckets, as opposed to the big money plant & infrastructure projects that MND, for example, is more exposed to.

OneUp
15-08-2007, 03:09 PM
Its been socked along with MND and IMD, both of which I've sold out of. I'm still holding ANG due to (a) capital gains tax exposure, and (b) its low P/E.

My theory is that the smart money is reacting to the falling metals prices, high industry costs, and falling profitability of both miners and the services companies - and is leaving the sector.

Return on investment for mining companies has never been so high.

Compare the marginal cost of mining copper versus the spot price or any base metal. You will find the profit margins are staggering.

No evidence of a slow down in exploration expenditure or capital investment in the sector.

Costs are soaring for miners because there is a bottle neck for companies trying to get their projects off the ground.

Miners' fortunes will be dictated by spot prices. No evidence that profitability is falling for mining service companies. Lots of backed up capital investment coming onstream in FY08. For capital spending in the mining sector to seize up would require metals prices to fall 40-50% from current levels.

FarmerGeorge
23-08-2007, 03:11 PM
Worthwhile reading latest couple of announcements, seem to have had a positive market impact.

stephen
23-08-2007, 03:37 PM
I'm still hanging on and quite happy at this point.

FarmerGeorge
01-10-2007, 03:45 PM
Perth expansion, or at least capacity expansion is a postive note from Austin and the market seems to like. Perhaps a bit overdone up to 2.10 but no complaints here - now my first 'four bagger' and giving ten percent dividends based on the original investment. Hope there are still a few other holders out there on the forum, Austin have been a good performer and consistently done what they've said they would do.

Bobbyvee
01-10-2007, 08:16 PM
Well just to make sure we all stay balanced - I don't here anyone blaming Robbo for promoting/ramping ANG from 40 cents. Then again you don't need anyone to blame when things go well do you. By the way where is Robbo?

FarmerGeorge
19-10-2007, 10:18 PM
Wasn't watching that, but it was a funny, lumpy sort of a day volume wise with gaps up and down and all over the place. Has had a huge run up lately though so wouldn't be surprised if some profits got pulled out at these levels.

OneUp
21-10-2007, 05:34 PM
Return on investment for mining companies has never been so high.

Compare the marginal cost of mining copper versus the spot price or any base metal. You will find the profit margins are staggering.

No evidence of a slow down in exploration expenditure or capital investment in the sector.

Costs are soaring for miners because there is a bottle neck for companies trying to get their projects off the ground.

Miners' fortunes will be dictated by spot prices. No evidence that profitability is falling for mining service companies. Lots of backed up capital investment coming onstream in FY08. For capital spending in the mining sector to seize up would require metals prices to fall 40-50% from current levels.

KW did you ever get back in to the mining services cos?

FarmerGeorge
26-11-2007, 01:29 PM
Presentations last week are further indication of continued growth, forecast first half 08 EBIT of $6m is very encouraging and with not many shares issued there is potential for the high side of 25c-30c full year EBIT. If you ascribe just a P/E of 10 Austin still doesn't look overvalued, even with todays gap upwards. If you want to argue for a P/E closer to the market, there could still be serious legs in this one. I have to confess to selling down a few when first the sp broke $2.40 but now I'm holding tight.
Also quite like management who tell you what they're going to do, shut up and do it, then come back in six months and tell us how they've done it.

mark100
26-11-2007, 06:19 PM
Farmer George,

What do mean by 25-30c EBIT?

If they do say $8m EBIT for the second half that would give $14m EBIT for the full year. Less around half a million of interest expense and then less 30% tax gives an estimated NPAT of $9.5m.

There are 46.7m shares on issue which would give EPS of around 20.2cps. Which puts ANG on a FY08 PE of around 12.5 based on todays closing price.

cheers

FarmerGeorge
26-11-2007, 07:53 PM
Erm, I think you can see what I meant but sorry and thanks for pointing that out. I was using the EBIT per share to plug into the P/E. So if you go on the high side and say 14m that equates to around 30cents per share. Of course what they actually get would have to have the 'IT' taken out, my bad!

FarmerGeorge
28-11-2007, 01:18 PM
Seemingly unbelievably ANG hit $2.80 today but I think has since backed off. Maybe someone else forgot to take out tax from their earnings forecast! ;)
The catalyst may have been the recent intersuisse report combined with presentation? Another real driver is that there are so few shares on issue and thus even fewer potential sellers than might otherwise be the case.
Intersuisse report outlines positive five year forecasts and also indicates potential for further takeover growth.

FarmerGeorge
03-12-2007, 11:43 AM
Anyone with any info on the reasons behind this? Large gaps upwards over the past few weeks. Sold down a few at 2.93-5 as seemed overdone but now looking at potential takeover activity?

stephen
03-12-2007, 02:14 PM
Anyone with any info on the reasons behind this? Large gaps upwards over the past few weeks. Sold down a few at 2.93-5 as seemed overdone but now looking at potential takeover activity?

They have bought one of their American suppliers and will be entering the North American market:

http://stocknessmonster.com/news-history?S=ANG&E=ASX&Year=2007

Clearly a bit of leaking the past few days.

FarmerGeorge
03-12-2007, 02:53 PM
Yikes, pretty big jump there. You're probably right about the leaking, perhaps I should hang out in a few more interesting board rooms! Obviously the market seems to like this acquisition, although there has been such a big run up recently I wonder if this will go any further?

FarmerGeorge
04-12-2007, 12:02 PM
It seems like ANG has jumped by 5-20 cents almost every day for the past two weeks or more now, and has already breached $3.40 today. This makes ANG close to an 8-bagger for me (althought admittedly I don't hold as many now as I did initially) and probably more for anyone who read davidrob's posts when he started this thread.
Anyone still holding on with a view of current value? Or do we just hold on for the ride?

David Hardman
04-12-2007, 01:24 PM
It seems like ANG has jumped by 5-20 cents almost every day for the past two weeks or more now, and has already breached $3.40 today. This makes ANG close to an 8-bagger for me (althought admittedly I don't hold as many now as I did initially) and probably more for anyone who read davidrob's posts when he started this thread.
Anyone still holding on with a view of current value? Or do we just hold on for the ride?

Nearly doubled my money when sold out around $1 some time back!

Thought i was smart at the time!

I'll file this missed opportunity next to selling JBHifi at $4 about 12 months ago!.. Now over $16

Huang Chung
04-12-2007, 08:05 PM
Wish I'd held on for the ride. Definitely one of Robbo's better picks.

stephen
05-12-2007, 09:32 AM
I still have 5000. More through good luck than good management, it has to be said.

It's just about a six-bagger for me.

thereslifeafter87
06-12-2007, 09:09 PM
Does anyone have links to an of the research they mentioned in their recent market release re the ASX price query?

Bell Potter, Veritas, and someone else....

FarmerGeorge
07-12-2007, 09:58 AM
I haven't read the release but try googling "Intersuisse Austin ANG Research" should give something.

Fodder7
11-12-2007, 11:22 AM
ANG has hit 3.75 this morning, I keep expecting it to pull back but has gone forward every day since before the recent announcement.

I've held this stock since 0.49 in Sep 06 and have not pushed the sell button yet, but i'm getting close as the margin of safety seems to be evaporating.

What are people's views, can ANG live up to the expectations current prices demand? Is there something we don't know?

trader-jim
11-12-2007, 11:59 AM
I wouldn't push the button just yet.

Before the US purchase the forecast was for in excess of $10M EBIT (was $6M for first half) The US company has an expected EBIT of A$7M so maybe an NPAT of A$11.5M which is 25cps.

So at 3.75 this is a PE of 15

This is without any synergies factored in and maybe setting up Westech with their robotic welding system

FarmerGeorge
11-12-2007, 02:14 PM
trader jim highlights out an excellent point, for me one of the real drivers of every rally has been the distinct lack of stock on the market, the two consequences are that any increase in earnings tends to have a large effect on the P/E and anyone wanting to put in a significant amount of cash will drive the price up. I've sold down plenty of these since my first entry but still hold a few.

stephen
11-12-2007, 02:26 PM
I bought at 0.55, and took up the rights issue at $2.60.

Recently I sold half my holding at 3.2-something.

I confess I'm holding the remainder now mostly in a spirit of hopeful bewilderment.

FarmerGeorge
19-12-2007, 03:30 PM
Suddenly down to pre-acquisition announcement. Large thumping drops the past few days. Can anyone provide some reasons not to buy at this level?

soulman
19-12-2007, 03:49 PM
It's just a case of going up too fast, too soon. I might be interested when it get closer to $2.60.

ohmyme
21-12-2007, 04:48 AM
yeee of little faith. ANG is not an expensive share. That last aquisition was genius. The fact that they have managed to add scale to their business at such a level without issuing any shares, suggests that these guys are really looking after us shareholders. ANG is one of those rare beasts that will grow into multi hundred million company and eventually command much higher prices. Yes its going to be volatile, but lets see where we are at in 6 or 12 months. ANG has not made one mistake yet. I think the love affair with this company has only just begun.. But as we all know, price and time will dictate who is right. The biggest mistake i ever made with this company was selling it. If I had kept all my original shares all bought at below 40c I would be well into retire mode now.

cheers

Fodder7
19-02-2008, 01:11 AM
A good result from Austin Eng today for the half year. Revenue up 47% and NPAT up 100%. The result only includes 1 month of contribution from Westech which should be a strong driver in the results for the full year.

One point that worried me a bit was comments like 'order book extending into 08-09' in the accompanying presentation. 08-09 is only a few months away so it's not like they have a huge amount of work locked in. I guess it's the type of business that could flip quickly if customers stop buying truck bodies.

Still, the PE ratio has come down considerably due to the recent SP falls and earnings upgrades.

FarmerGeorge
19-02-2008, 04:42 AM
I still hold ANG and this announcement seems to be more of the same from them: growth through expansion and acquisitions. I didn't see them mention any more acqusitions this announcement, just growth through growing current business.
Fodder, I think you are right in that if orders dry up Austin could see this growth reverse pretty quickly. My position is that this is the same for any company and that Austin are well run, maintain margins and have done well at integrating acquisitions. My concern is not that sales dry up but whether Austin can grow the top and bottom lines organically. That will be the challange over the next year. Still hold, like the dividend, can't see any better places to put my money right now.

Fodder7
30-05-2008, 10:41 AM
A couple recent ann. from ANG give strong hints for this years results. It seems they have picked up $51m in contracts in just the last couple of months which is big for a company which only did $57m in revenue in 06-07.

It also seems likely that they will double last years NPAT placing them on a PER around 5.

Good buying IMHO (disc. I hold)

trader-jim
30-05-2008, 02:34 PM
A couple recent ann. from ANG give strong hints for this years results. It seems they have picked up $51m in contracts in just the last couple of months which is big for a company which only did $57m in revenue in 06-07.

It also seems likely that they will double last years NPAT placing them on a PER around 5.

Good buying IMHO (disc. I hold)

Add to the recent announcement, the licensing deal announced in March which gave them royalties of about $2.5m a year (if the second deal was concluded) and some income from Westech, I'd say that double last year will be a minimum.

Disc. Holding tight

FarmerGeorge
30-05-2008, 04:23 PM
I was just thinking last week it's about time to hear something more out of ANG. They don't spruik themselves too much, just keep telling you what their doing and get on with doing it. Then every few months they tell us they've taken someone over, or increased the dividend, or expanded capacity, or have a full order book for the next 18 months or... you get the picture.

Footsie
30-05-2008, 08:33 PM
im close to pulling the trigger on these guys

Sauce
17-07-2008, 06:04 PM
Wow

FY 08 looks like its going to be an absolute ripper based on the earnings guidance released today. 130 - 135% increase in EBIT.

That must put the EPS at approx 27cps (last years 11.7cps). Second half was a lot stronger than the first half, and it looks like they have the forward orders to continue that strength well into 09.

Upbeat commentary on all areas of their business. Increased production capacity.

Current PE of approx 8.07 (based on closing price of $2.18)

Surely this company is severely undervalued - current market conditions notwithstanding.

Regards,

Sauce

Sauce
17-07-2008, 06:23 PM
The average PE ratio during 04 and 05 was 17 and 12.5 respectively.

A re-rating to a PE of 15x would give a current valuation of $4.05 per share.

Regards,

Sauce

thereslifeafter87
17-07-2008, 09:25 PM
The average PE ratio during 04 and 05 was 17 and 12.5 respectively.

A re-rating to a PE of 15x would give a current valuation of $4.05 per share.

Regards,

Sauce


This company is doing well from the current boom, but a lot of the E in the PE will disappear in say 5 or 6 years time as people stop needing to buy new dumptrucks.

I think probably 11 or 12x based on their growth prospects over the next few years is probably reasonable. So there is upside from here.

Sauce
20-07-2008, 05:44 PM
Hi Thereslifeafter87.

Austin's businesses are more diverse than just dump truck bodies! Don't forget about the industrial blasting and coating, product design, ongoing repair & maintenance, aluminum smelter part assembly, machining & line boring, plus all the other products they manufacture alongside dump truck bodies - from shovels & track frames through to water tanks and fuel modules.

I take your point though. They are certainly riding the mining boom. Doesn't the saying go that the people who got richest during the early gold rush were the people supplying the shovels?

It does seem that of the recently announced large $$ orders (revenue which has yet to be recieved!) are mostly for the Westech dumptruck bodies. But these new orders will be "on top" of existing revenue sources, not "instead of".

Looking at the figures it seems the purchase of Westech was an absolutely amazing deal for ANG. And from a fundamental perspective the IP provides the barrier to entry, the efficient product design provides the competitive advantage and the licensing provides recurring revenue that requires almost no expense, and finally the revenue from their own sales and production.

Securing somewhere in the region of $30m+ of future orders for Westech products in the last few months seems very significant - The forecast for the entire year was only 36m when they purchased it.

At risk of sounding like I have fallen in love with this stock, I think they are doing a great job of diversifying their interests - not just product/service wise but (importantly) geographically as well.

I am interested in your opinion - What do you think the catalyst for the mining industry to reverse its fortunes would be? a bursting of a commodity bubble or china imploding on itself or something along those lines?

And if this happens do you think companies servicing the industry would be hit as hard as the miners themselves? I guess everyone hurts when an industry faces a downturn but surely people will always need to extract resources from the ground.

Thanks for your thoughts on a fair multiple. The more research I do the more I get the feeling that people have, and will continue to underestimate the future growth of this company - i just hope my reasoning is sound and void of emotion :)

Either way it looks cheap on historical financials and positioned for high growth in the medium term.

Cheers

Sauce

Huang Chung
25-07-2008, 09:15 PM
Wow

FY 08 looks like its going to be an absolute ripper based on the earnings guidance released today. 130 - 135% increase in EBIT.

That must put the EPS at approx 27cps (last years 11.7cps). Second half was a lot stronger than the first half, and it looks like they have the forward orders to continue that strength well into 09.

Upbeat commentary on all areas of their business. Increased production capacity.

Current PE of approx 8.07 (based on closing price of $2.18)

Surely this company is severely undervalued - current market conditions notwithstanding.

Regards,

Sauce

I followed your lead sauce, and bought back in.

A great little stock in a great sector.

Well worth a look for those wanting to get exposure to the mining sector, without the direct exposure to commodity prices.

Huang Chung
25-07-2008, 09:40 PM
AA....one too many bourbons me thinks :rolleyes:.......you posted a chart for Strike Oil!

When you sober up, a chart for ANG and NMS (Neptune Marine) would be greatly appreciated.

Sleep well.

Huang Chung
25-07-2008, 09:51 PM
Looks to be at a pretty critical price point AA....would you agree?

Also, is that a classic double top formation at $3.80??

shasta
25-07-2008, 09:55 PM
Looks to be at a pretty critical price point AA....would you agree?

Also, is that a classic double top formation at $3.80??

Looks like a nice bounce off a previous support level HC :D

Huang Chung
25-07-2008, 09:55 PM
Do you want the NMS chart here or on the NMS thread?

AA

NMS thread please AA.

Huang Chung
25-07-2008, 09:57 PM
G'day Shasta....yeah, it does seem to want to hold above $2.00. Now that I'm back in, I hope it does!

shasta
25-07-2008, 10:02 PM
G'day Shasta....yeah, it does seem to want to hold above $2.00. Now that I'm back in, I hope it does!

That chart is a TA dream, a stock that behaves itself!

Huang Chung
25-07-2008, 10:06 PM
That chart is a TA dream, a stock that behaves itself!

If you say so Shasta.....not something I know a great deal about, but always happy to learn.;)

shasta
25-07-2008, 10:08 PM
If you say so Shasta.....not something I know a great deal about, but always happy to learn.;)

Im learning myself, always had the FA skills (being an accountant & all), but learning to use TA as confirmation

Sauce
26-07-2008, 10:42 AM
I followed your lead sauce, and bought back in.

A great little stock in a great sector.

Well worth a look for those wanting to get exposure to the mining sector, without the direct exposure to commodity prices.


Hi HC,

I hope it turns out to be an excellent decision for you. I have been holding since 52c and recently topped up awhile ago at $2.56 and more recently at $2.05.

I think Thereslifeafter87 is right, the biggest risk is a downturn in commodities and the mining sector. I just can't foresee a catalyst for this in the short term, but I guess it will have to happen eventually, and probably without warning. In the meantime I think they will continue to increase EPS and the share price should follow.

- The the current divergence of huge earnings growth and a falling share price seems like a screaming opportunity.

Regards,

Sauce

Sauce
26-07-2008, 11:04 AM
I see Aspect Huntley's had a valuation of $3.25 and a BUY recommendation on ANG back in February this year.

At the time, they were forecasting FY08 eps of 19.7 and a FY09 eps of 26.9.

Now that ANG have beaten their FY08 forecast by 37% and achieved their FY09 forecast an entire year early it will be interesting to see what valuation they put on the shares.

Regards,

Sauce

Huang Chung
26-07-2008, 02:43 PM
I think Thereslifeafter87 is right, the biggest risk is a downturn in commodities and the mining sector. I just can't foresee a catalyst for this in the short term, but I guess it will have to happen eventually, and probably without warning. In the meantime I think they will continue to increase EPS and the share price should follow.

- The the current divergence of huge earnings growth and a falling share price seems like a screaming opportunity.


Regards,

Sauce

A good thing about Austin is that a good part of their business is in the mining 'consumables' area (shovel buckets etc), rather than infrastructure type engineering, such as coal plants, railways etc, or even the provision of big end earthmoving equipment. Therefore, even if the rate of new development slows, existing mines will still need to keep repairing and replacing wear items, even if their expansion plans get put on hold.

thereslifeafter87
28-07-2008, 09:29 PM
ANG is well placed, and it is definitely in a better business than say FGE or RCR.

At the end of the day though, you need mines to be expanding to get growth unless you are capturing market share from competitors. Without any real competitive advantage (dump truck bodies and excavator buckets are commodity products), the only way you take market share from competitors is on price. This depresses margins, returns, and net profits.

The reason ANG is doing so well at the moment is there is an excess of demand over supply for its products. This has allowed it to earn excess returns.

The demand supply imbalance will only last for as long as it take for new supply to come online - which can't be more than a couple of years surely?

The resource boom will turn into a bust soon - you only have to look at the amount of iron ore supply coming online over the next few years. Even China can't use that much steel every year - once you've built 50 dams one year, you're probably not going to build 60 the next year, more like 20 or maybe 10 (not the best example but you get my drift).

When this happens, the resource companies will really struggle, but so will the mining service companies.

For the meantime though, I'm happy in ANG as I see them improving profits significantly for the next couple of years.

Huang Chung
28-07-2008, 09:49 PM
ANG is well placed, and it is definitely in a better business than say FGE or RCR.

At the end of the day though, you need mines to be expanding to get growth unless you are capturing market share from competitors. Without any real competitive advantage (dump truck bodies and excavator buckets are commodity products), the only way you take market share from competitors is on price. This depresses margins, returns, and net profits.

The reason ANG is doing so well at the moment is there is an excess of demand over supply for its products. This has allowed it to earn excess returns.

The demand supply imbalance will only last for as long as it take for new supply to come online - which can't be more than a couple of years surely?

The resource boom will turn into a bust soon - you only have to look at the amount of iron ore supply coming online over the next few years. Even China can't use that much steel every year - once you've built 50 dams one year, you're probably not going to build 60 the next year, more like 20 or maybe 10 (not the best example but you get my drift).

When this happens, the resource companies will really struggle, but so will the mining service companies.

For the meantime though, I'm happy in ANG as I see them improving profits significantly for the next couple of years.

In the mean time, ANG will undoubtedly continue to pick up complimentary businesses on low multiples. Margins may eventually come back, but I feel that supplying commodity/consumable type products is a definite 'plus', compared to companies that focus on resource infrastructure. ANG also have some competitive advantages through their automated welding processes used in some applications.

I also get the impression that things like excavator buckets are not truely commodity type products, some will be better than others....a bit like the way the European or Japanese tyres for earthmoving equipment tends to be favoured over the Chinese products (although mines will take whatever they can get their hands on at the moment!)

Sauce
29-07-2008, 11:29 AM
ANG is well placed, and it is definitely in a better business than say FGE or RCR.

At the end of the day though, you need mines to be expanding to get growth unless you are capturing market share from competitors. Without any real competitive advantage (dump truck bodies and excavator buckets are commodity products), the only way you take market share from competitors is on price. This depresses margins, returns, and net profits.

The reason ANG is doing so well at the moment is there is an excess of demand over supply for its products. This has allowed it to earn excess returns.

The demand supply imbalance will only last for as long as it take for new supply to come online - which can't be more than a couple of years surely?

The resource boom will turn into a bust soon - you only have to look at the amount of iron ore supply coming online over the next few years. Even China can't use that much steel every year - once you've built 50 dams one year, you're probably not going to build 60 the next year, more like 20 or maybe 10 (not the best example but you get my drift).

When this happens, the resource companies will really struggle, but so will the mining service companies.

For the meantime though, I'm happy in ANG as I see them improving profits significantly for the next couple of years.

Thanks for your reply.

I am not sure I totally agree with you on this one. Products designed for businesses that rely on operational efficiencies to increase productivity are always going to be subject to ongoing advances in techonology. Mining is the perfect example.

ANG made a large deal of the fact the purchase of Westech included the Intellectual Property for their special truck body design which ANG believed would be very popular with Australian miners due to the added value the product provided over competitors through the efficiencies of the design (presumably more capacity and or quicker loading/delivery).

They have since confirmed this assumption with 76 truck bodies ordered totalling $30m - presumably mostly from Australia since in their presentation to the 'go west' conference they inferred this was due to the successful takeup of the product range in Australia.

ANG are very clear in their presentations and annual reports that adding value through product innovation is part of their overall strategy. They also invest a lot of funds and resources in research and development which I believe is further testament to my argument.

I think it is easy to consider things like dumptruck bodies as boring industrial type products that are void of technological advances. The fact is that the mining industry is changing rapidly and as the economics change so do the techniques and products employed.

ANG can (and do) further compete through their own operational efficiencies (as HC has pointed out) such as advanced welding techniques, better systems and quicker production and delivery.

Creative Destructionism is alive and well in the mining services industry.... if you want to get philisophical about it :)

I believe ANG can (and will) capture market share without competing on price alone and that mine expansion is not absolutely critical to their success (but clearly helps immensely). Thats what I feel from my research so far. My perspective might be totally wrong!

Good to get your sobering perspective on the mining boom. Your comments make sense, china cannot increase its output forever, and that will effect all players including ANG.

My position is that their geographical and product/service diversification, operational efficiencies, research and development and their solid management will ensure they absolutely milk the current boom and position themselves better than most for a downturn but will be effected by it nonetheless when it comes.

Regards,

Sauce

Sauce
29-07-2008, 11:35 AM
All this thinking about ANG has reminded me they were tendering for a new JV in the middle east among other things (in addition to the Oman smelter work) and were expecting to make an anouncement regarding this.

It has been sometime with no word - perhaps they missed out.

Sauce
29-07-2008, 11:38 AM
In the mean time, ANG will undoubtedly continue to pick up complimentary businesses on low multiples.

Even though their US denominated debt is cheap, I would prefer they pay some of this down before going on another spending spree.

thereslifeafter87
31-07-2008, 11:53 AM
In the mean time, ANG will undoubtedly continue to pick up complimentary businesses on low multiples. Margins may eventually come back, but I feel that supplying commodity/consumable type products is a definite 'plus', compared to companies that focus on resource infrastructure. ANG also have some competitive advantages through their automated welding processes used in some applications.

I also get the impression that things like excavator buckets are not truely commodity type products, some will be better than others....a bit like the way the European or Japanese tyres for earthmoving equipment tends to be favoured over the Chinese products (although mines will take whatever they can get their hands on at the moment!)

Acquisitions may not occur due to ANG being unable to raise capital on good terms in the current market. Also, balance sheet capacity is constrained by debt taken on board to fund the Westech acquisition.

You could be right about that, but I think at the end of the day, differences will not be large.

thereslifeafter87
31-07-2008, 11:55 AM
Thanks for your reply.

I am not sure I totally agree with you on this one. Products designed for businesses that rely on operational efficiencies to increase productivity are always going to be subject to ongoing advances in techonology. Mining is the perfect example.

ANG made a large deal of the fact the purchase of Westech included the Intellectual Property for their special truck body design which ANG believed would be very popular with Australian miners due to the added value the product provided over competitors through the efficiencies of the design (presumably more capacity and or quicker loading/delivery).

They have since confirmed this assumption with 76 truck bodies ordered totalling $30m - presumably mostly from Australia since in their presentation to the 'go west' conference they inferred this was due to the successful takeup of the product range in Australia.

ANG are very clear in their presentations and annual reports that adding value through product innovation is part of their overall strategy. They also invest a lot of funds and resources in research and development which I believe is further testament to my argument.

I think it is easy to consider things like dumptruck bodies as boring industrial type products that are void of technological advances. The fact is that the mining industry is changing rapidly and as the economics change so do the techniques and products employed.

ANG can (and do) further compete through their own operational efficiencies (as HC has pointed out) such as advanced welding techniques, better systems and quicker production and delivery.

Creative Destructionism is alive and well in the mining services industry.... if you want to get philisophical about it :)

I believe ANG can (and will) capture market share without competing on price alone and that mine expansion is not absolutely critical to their success (but clearly helps immensely). Thats what I feel from my research so far. My perspective might be totally wrong!

Good to get your sobering perspective on the mining boom. Your comments make sense, china cannot increase its output forever, and that will effect all players including ANG.

My position is that their geographical and product/service diversification, operational efficiencies, research and development and their solid management will ensure they absolutely milk the current boom and position themselves better than most for a downturn but will be effected by it nonetheless when it comes.

Regards,

Sauce
The mining boom can still turn into bust even if China keeps increasing its output at the current rate simply because eventually supply will catch up with, and probably overshoot demand.

Fodder7
01-09-2008, 11:19 AM
Austin Engineering is showing some strength over the last few weeks rising from $2 to a current price of over $2.90 in morning trade today.

Is something in the wind or is the market finally waking up to it's low price?

Sauce
01-09-2008, 04:12 PM
Austin Engineering is showing some strength over the last few weeks rising from $2 to a current price of over $2.90 in morning trade today.

Is something in the wind or is the market finally waking up to it's low price?

Hi Fodder

I think it is getting re-rated because it is too cheap.

I notice in the most recent announcement they mention forward orders stretching into 2010 , when previously they only mentioned having forward orders into 2009.

The company has said several times now that they are forecasting growth across all their businesses. I think this is finally sinking in. Perhaps more brokers starting to cover them now - I don't know..

I am very glad I loaded up the truck at 2.05. No wishing I had gone harder with the benefit of hindsight this time!

Regards,

Sauce

FarmerGeorge
01-09-2008, 04:28 PM
Once again ANG come out and tell us they did what they said they would do: acquire businesses, growth revenue and NPAT and build order book into the future. Love it. Still a ways to go to the $4 mark they hit last time the market got enthusiastic about them.

soulman
24-10-2008, 07:58 PM
Now BKN is a holder of ANG, I think ANG is in play here. Then again, if you look at BKN share price, they are being smashed just as hard as other engineering group.

ANG volume today signified BKN has picked up some more shares today to move to about 9% holding. This is still all speculation and confirmation next week is needed.

Now BKN looks a great buy.

soulman
27-10-2008, 05:52 PM
Confirmation of BKN now having 10% of ANG. I guess I can feel a little comfort in ANG even though I am way underwater.

Plus buying TSE at $4 on Thursday last week don't seem that good anymore. I see BKN getting the boot today as well.

kura
27-10-2008, 07:13 PM
Confirmation of BKN now having 10% of ANG. I guess I can feel a little comfort in ANG even though I am way underwater.

Plus buying TSE at $4 on Thursday last week don't seem that good anymore. I see BKN getting the boot today as well.

In that case I can recommend MGR to you, Why ? simply beacuse I purchaesd today BKN, TSE & MGR. You are simply missing MGR from your buying ! and if that custard keeps flowing, then gee, misery loves company !

Huang Chung
27-10-2008, 07:20 PM
Confirmation of BKN now having 10% of ANG. I guess I can feel a little comfort in ANG even though I am way underwater.



BKN must be loving this.

Becoming a substantial shareholder in ANG and then upping their stake only a couple of weeks later. In a normal market, punters would be all over ANG, positioning themselves for a takeover. In this crazy market, no one cares.

soulman
28-10-2008, 07:42 PM
Yep, engineering firm getting the boot again. AAX, WOR, TSE, BKN, MND, ANG, UGL, CDD, LYL and probably more.

Kura, looks like your purchase yesterday was a bit off. I have been consistently making those purchase to see it fall the next few days and weeks. The lessons we learn here is that we should stayed out but I still make that mistake time and time again. Painful as the market keeps falling and whatever you bought in the last month to last week would be lower than the current price.

Gut feeling say BKN today just increased their stake in ANG to 14% due to the volume traded today in ANG.

Sauce
01-12-2008, 07:15 PM
Austin's share price has been severely punished lately, presumably due to concerns about Asia's growth slowing and demand for natural resources drying up. Or perhaps more general market malaise.

At the companies AGM the directors (who have an excellent track record or under-promising and over delivering and generally managing market expectations well) have stated unequivocally that they see no sign of any slowdown in any of their businesses.

Their guidance for HY earnings this financial year shows an increase of approx 20% over last financial years second half (which I think is a better comparison than the corresponding period, 1st half last financial year, due to full input from old/new capacity).

Assuming that rate of revenue growth is sustainable for the second half (by all accounts management seem very confident of sustained revenue growth going forward) then we could be looking at EBIT for FY 09 of approx 26.4m vs 17.05m for FY 08. An increase of 54%. This should equate to EPS of approx 36cps, and a PE of just 3.6 at current levels.

even with the recently expanded workshop facilities it appears they could further increase revenue growth if it were not for capacity restraints.

They also used the AGM presentation to announce they have been in talks with a south african company and they are terminating their current licensing agreement over there (I am confused as to why they would cancel the licensing agreement before the purchase of facilities to begin manufacture themselves was a done deal, which is what they seemed to imply?) This seems like very significant news, and the company is clearly very excited about the demand for their products in South Africa. Potential is just potential of course but their track record of growth through acquisition and ability to cross sell their wares to new markets is excellent.

I am interested in others perceptions of the AGM presentation and future prospects for ANG... ? I know there are a lot of undervalued companies out there right now, but this does seem like an exceptional growth story unfolding. Does anyone disagree or believe this engineering company is headed for the rocks due to worldwide recession, lower demand etc etc...?


Disc. Buying




Highlights from AGM presentation:

High level of productive activity for current financial year FY 2008/09 with no signs of it abating

Workload base for FY 2009/10 beginning to fill up

Continuing high level of tendering and enquiry activity

A number of large and significant projects actively being pursued which, if successful in securing, would result in solid base workload levels for FY 2009/10 to FY 2010/11

Forecast underlying operational EBIT of $11.5m to $12.5m for the first half of FY 2008/09 (six months to December 2008), representing an increase of 64% to 79% over the corresponding period to December 2007

Forecasting continued strong level of activity in the second half of current financial year FY 2008/09 with further increases in all key financial measures



Following recent meetings with the major mining companies the presence of Austin’s product range would be extremely well received and accepted in South America

Discussions have commenced with an established and recognised South American manufacturing company with a view to a potential acquisition of the company

Manufacture of Westech and JEC products directly in South America (existing licence arrangement in the process of being terminated)Existing competition across South America lacks strategy, geographical presence and product range -a market growth opportunity exists for Austin

Austin business model would be easy to replicate in South America and would be successful

Potential for South American revenue streams to be greater that Australian revenue streams within two years

Sauce
01-12-2008, 07:22 PM
Chairman's Address to Shareholders at 2008 AGM

Brisbane, 28 November 2008: Austin Engineering Limited (ASX Trading code: ANG) is pleased to announce the
Chairman's address to shareholders as presented at the Company's 2008 Annual General Meeting held today.



Austin Engineering Ltd Chairman's Address

Good morning ladies and gentlemen. I would like to welcome you to the fifth annual general meeting of Austin
Engineering Ltd.

It is my pleasant responsibility to report a fifth year of continuous revenue and profit growth with total revenue for
2008 increasing by 85% over 2007 to $106.34 million and net profit after tax up by 132% to $11.54 million. In line
with this profit increase the Board was able to raise the total annual dividend from 4 cents to 7.5 cents per share,
fully franked, also a substantial increase.

Austin, like virtually all other quoted companies, and despite our substantial increases in revenue and profit, has
fallen victim to the worldwide stock market crash and our share price is currently trading at around one third of its
price of a year ago. Based on our recent share price and brokers and analysts forecasts on our FY2008/09
results, we have been trading at a P/E ratio of between 2.5 to 4.5, which is considerably less than the average in
recent years. Whilst other companies in our industry sector are also trading at P/E multiples much lower than
historical averages, Austin's ratio is lower than the average of the industry sector within which we operate.
Austin's current share price does not reflect our value and the strong performance we have delivered. We trust
that when stability returns to the world's stock markets we will see a steady rise in the value of our shares to more
appropriately reflect the value of the company going forward.

Since our last AGM we have made one further major acquisition, Westech Technology Services Inc. ("Westech")
of Casper, Wyoming in the USA, one of the worlds leading designers and builders of lightweight truck bodies for
off highway trucks. Westech bodies allow the mining operators to carry more payload per trip on their trucks thus
improving the productivity and hence profitability of their truck fleets. This acquisition, whilst it has given us
access to leading edge technology for dump truck bodies for our Australian customers, has had the added benefit
of opening up other world markets for our JEC product range through Westech and their sales networks in areas
of the world we do not service from Australia.

In Australia, the Westech expertise has lead to substantial growth in truck body orders for the Group as we now
have the capability to both service our traditional Original Equipment Manufacturers (OEMs) using their
proprietary designs and in addition offer the OEMs and their customers the Westech range of lightweight bodies.
This has ensured that the Austin facilities in Perth and Brisbane have full forward order books for the balance of
this financial year and in fact have orders extending out to 2010. It has also required that we lease further facilities
in Perth to satisfy our West coast customers' delivery requirements and utilise a substantial percentage of our
expanded Mackay facilities to support our East coast customers.

For Austin, despite the turmoil in the stock markets, we are still very much in "business as usual" mode and in fact
are in negotiations for orders, both in Australia and offshore which, if successful, will keep our Australian facilities
at full capacity well into the next financial year.

The same is true for Westech who are becoming more involved in the major mining markets of South America,
namely Brazil and Chile, whilst maintaining a steady work load in their Casper facility for its American and
Canadian customers. Furthermore after mounting a very successful exhibit at MINEXPO, the 4 yearly show in Las
Vegas at which all the worlds leading mining machinery companies show their latest products, Westech has
suitors from other major mining areas of the world who are interested in marketing their designs and product.

I would now like to comment more generally on the way forward for Austin.

As you are aware Austin has grown rapidly in the last 5 years, in part organically from its original Brisbane base,
but more dramatically from its strategic acquisitions of JEC, Kaldura Industries, Austbore and more recently
Westech.

(Cont'd)

Chairman's Address to Shareholders at 2008 AGM
(Cont'd)

We expect to make further acquisitions in the future as opportunities arise which meet our strategic plans and
earnings targets. The successful acquisition of Westech has opened our horizons to possible further offshore
acquisitions should the opportunity arise. This would probably require the addition of a further non- executive
director with international trading experience, hence the request to increase the funding for directors fees which
we are putting to shareholders at this meeting.

In 2009 we will for the first time be recording the full year revenue and profit from Westech and we expect to see
the start of profit flows from the first $9m contracts we received this (calendar) year with our JV partner in Oman.
Based on these additional revenue and profit streams together with the full workload in our Australian facilities we
expect EBIT to be between $11.5m and $12.5m for the six months to 31 December 2008, an increase of 64% to
79% over $7m EBIT for the corresponding period last year. In line with my earlier comments regarding our current
forward order position, we expect to achieve a good second half.

As is our usual practice we will be providing full year guidance at the time of the release of our half year results.
Suffice it to say, however, that we expect to be able to increase our dividend year on year for 2009.

The success of your company is in no small measure a result of the efforts of the excellent management and staff
in the Austin Group and on your behalf I would like once again to thank them for their efforts and wish them well
in their endeavours this year.

I now hand over to Michael Buckland to make his presentation covering the highlights of the last year.

Thank you.

Zephyrus
03-12-2008, 03:08 PM
South America, not South Africa, Sauce.

As far as the presentation goes, yes it was very positive, but things could change very quickly I guess.

Sauce
03-12-2008, 06:38 PM
...........<Cough>


err yes. South America :)

Thanks for your opinion Zephyrus, much appreciated. I am sure things could change quickly, only time will tell. For me, I am content to go on guidance from the company without any other information to go on. These guys have clearly done their research and spoken to their customers - what more can you go on. Panicking about events yet to happen is self fulfilling.

Regards,

Sauce.

Sauce
04-12-2008, 03:29 PM
A friend emailed me a very bearish report on Australian equities - I think this excerpt pretty much sums up the paradigm shift that has caused companies like ANG's shareprice to take a smackdown.



Australian Market Outlook:

Coys on road shows to US investors tell them that they are not feeling any significant effects from the slowdown / recessions and that their businesses will be fine.

NY institutions believe Aust corporates have “their heads in the sand”.

The issue is: Commodity prices have bust – iron ore, copper, uranium Volumes have / will collapse.

Stockpiles and oversupply. With no demand out of US (no intention to buy new cars – US car makers expected to fold, unemployment anticipated to exceed 10%) – steel mills in China and Japan cutting production significantly, reducing demand for raw materials – iron ore, coal etc.

The resources boom that Australia (and Brazil) has benefited from for the last 10 years is over.

This coupled with the extremely high consumer debt Will lead to a “perfect storm”

Based on this – all things Australian are being sold and accordingly the currency has collapsed.

Overseas investors repatriating dollars to US (the most liquid market in the world – liquidity has dried up in other markets around the world).

While the US is bad – believe that it will be worse for Australia and Brazil (the worlds other big Iron Ore producer).

On a USD basis Australia and Brazil are the two worst performing markets around the world in 2008.

So in summary US investors extremely bearish on Australia.

Zephyrus
05-12-2008, 10:55 PM
...........<Cough>


err yes. South America :)

Thanks for your opinion Zephyrus, much appreciated. I am sure things could change quickly, only time will tell. For me, I am content to go on guidance from the company without any other information to go on. These guys have clearly done their research and spoken to their customers - what more can you go on. Panicking about events yet to happen is self fulfilling.

Regards,

Sauce.

I'm just being very cautious at the moment sauce. There have been quite a few contracts put on hold or cancelled in the mining sector already so anything can happen. ANG is a very good business but I just don't see how they can totally avoid the affects of this crisis. Luckily they don't have a lot of debt & are a niche player so hopefully they'll still do well. Whether they can continue growing in this climate is up for debate though. On the share price side of things, it's all about supply & demand. Good news can be forgotten very quickly when the market sentiment is negative, so I don't think it's necessary to rush in. They fell down to 90 cents recently & I don't see any reason why it couldn't happen again. When people are throwing in the towel, anything goes. I'll definitely be a buyer if it does reach there again though.

Huang Chung
07-12-2008, 01:02 PM
Has anyone looked to see if the debt they took on for the Westech acquisition was in USD (presumably), and if so, have they protected themselves from the slide in the $A compared to the USD?

Just this sort of scenario has helped put Oz Minerals on the ropes.

soulman
08-12-2008, 07:30 PM
Has anyone looked to see if the debt they took on for the Westech acquisition was in USD (presumably), and if so, have they protected themselves from the slide in the $A compared to the USD?

Just this sort of scenario has helped put Oz Minerals on the ropes.

HC, the presentation said that the US$19 mil used to purchase Westech are in US dollar and the interest rate at 3.8%. No mention of the hedging but aren't Westech revenue in USD so they can pay the debt via Westech business?

Sauce
17-08-2009, 03:19 PM
Great result! EPS up 27% at 31.56cps
Considering the world economy malfunction.

>>>>>>>>
Assuming that rate of revenue growth is sustainable for the second half (by all accounts management seem very confident of sustained revenue growth going forward) then we could be looking at EBIT for FY 09 of approx 26.4m vs 17.05m for FY 08. An increase of 54%. This should equate to EPS of approx 36cps, and a PE of just 3.6 at current levels.
>>>>>>>>

I was a bit optimistic with my predicitons. Growth did slow in second half, but still a great result. Luckily management are more prudent when managing earnings expectations than I am :)

Whats much more interesting is the South American acquisition. All the followers of this company who read all the anouncements and presentations carefully will know the company expects this to be huge. And with their track record of integrating and leveraging businesses like Westech, and managements habit of underpromising and overdelivering, this acquisition looks like a huge opportunity for Austin and its shareholders.

From their media release:

"Chile offers significant growth opportunities for the company and it is expected that South America operations will become a notable feature of the Company's overall business activities in the future"

Based on their past conservatism it will be interesting to see what "notable feature" actually ends up being :)

There seems no barrier to reproducing the huge success of the introduction of the Westech truck body designs into Australia, in South America, with the JEC products also.

PE on historical earnings is now 7.4 - still very cheap considering the growth still to come from this company IMO.

Anyone else out there interested in this company? I am suprised there has not been more discussion on this forum with all the action recently.

Regards,
Sauce

Sauce
20-10-2009, 10:01 AM
Thoguht i would copy/past this here to stay on topic Colin.

Quote:
Originally Posted by COLIN View Post
Sauce: Assuming you still hold your ANG (I am) you will no doubt be pleased with yesterday's action - up 13% on a down day, but for no obvious reason. Perhaps others, like me, have been perusing their Annual Report - just out - and have got excited by those "big rig" pictures. The 5-year comparative graphs certainly look impressive - exponential growth.

Meantime RCR seems to have run out of steam, after that magnificent spurt a few weeks ago. Looks like the market has come round to agreeing with you.



Hi Colin,
Thanks for your post. Very glad to hear you are holding ANG. I wrote a long post last night on the ANG thread about my thoughts on future prospects, only to be unable to connect to the sharetrader site when I hit the post button, and lost my whole post so I gave up!

Yes I am still very overweight in ANG, in fact I decided a cheeky top up was in order, and stole 15000 shares at $2.09 and $2.10 on the recent dip. Still very much cheap cheap - even with latest rise, its well sub 10 PE - with imminent growth potential from Conymet with subsequent sales of JEC/Westech products in SA adding to Conymet's current revenue sources.

I will have to find the quote and post it here, but management have stated publicly that they believe South America could provide more revenue for their company within two years than their Australian operations do. They stated this during the middle of the financial crisis, and while they were conducting very thorough feasibility. This is not an insignificant comment from A team who have a reputation for good conservative approach to managing the markets expectations.

They now have the vehicle they needed, they know they have the demand through many discussions with their existing and potential customers, who are supporting their SA expansion. And they certainly have the track record and experience.

I am very confident that there will be considerable EPS growth in the next two years. With heavy hitters like Thorney and BKN on the share register, thats another vote of confidence.

Next step of information flow will be November AGM - the company should be providing profit guidance and progress report on expansion.

The biggest risk is still delayed/stalled projects and contracting capital expenditure by the mining companies. However it seems that as each day goes by this risk is subsiding. Time will tell!

Non-holders should not let the recent price rise put them off. Worth every cent up to $3. I will revive ANG thread when I get some time, must be some other holders out there!

Yes, I must admit to enjoying the truck and digger porn also.

Regards,
Sauce

Sauce
20-10-2009, 10:04 AM
Ok, here it is - managements comments regarding potential revenue from South America - from last years AGM (literally almost at the worst of the financial crisis!) note the last line:


Following recent meetings with the major mining companies the presence of Austin’s product range would be extremely well received and accepted in South America

Discussions have commenced with an established and recognised South American manufacturing company with a view to a potential acquisition of the company

Manufacture of Westech and JEC products directly in South America (existing licence arrangement in the process of being terminated)Existing competition across South America lacks strategy, geographical presence and product range -a market growth opportunity exists for Austin

Austin business model would be easy to replicate in South America and would be successful

Potential for South American revenue streams to be greater that Australian revenue streams within two years

Sauce
20-10-2009, 10:09 AM
And they have also commented that margins are higher in South America (for instance conymet margins are 34%!!) And, they can further improve the margins of Conymet through their automated welding processes, which conymet does not have currently and they have announced plans to introduce.

So, South American revenue + higher margins = EPS growth = Share price growth = too cheap currently at PE <10 for high growth company:)

COLIN
20-10-2009, 10:19 PM
And they have also commented that margins are higher in South America (for instance conymet margins are 34%!!) And, they can further improve the margins of Conymet through their automated welding processes, which conymet does not have currently and they have announced plans to introduce.

So, South American revenue + higher margins = EPS growth = Share price growth = too cheap currently at PE <10 for high growth company:)

Sauce: Thanks for all that - most encouraging. I can see myself adding to my holding.
In addition to the risks you have mentioned I suppose a little reservation I would have (re the South American expansion and its increasing expected contribution to total revenue) is the geographical/sociological/political risk and the extended management control line that comes with offshore operations, particularly in "non-traditional" parts of the world. Perhaps what has coloured my thinking in this regard lately is that here in NZ we have had our major agri-business (Pyne Gould Wrightson - PGW) attempting to set up large-scale dairy farming in Uruguay (NZS), only to be beset by all manner of problems, with the sp now only about a third of what it was at its peak. However, thats a totally different business - the Board and top management of ANG seem pretty astute characters and I am sure will be right onto deviations from the business plan.

Sauce
20-10-2009, 11:13 PM
That's a good point Colin. I know absolutely nothing at all about doing business in South America. Or South American political situation.

The company has commented a few times that there is attractive financial assistance available from the Chile government for capital investment programs and they expect to take advantage of this during their expansion of the production facilities. Certainly doesn't seem like too much red-tape from authorities.

Only other comment I could make is that many of the customers are companies that Austin already has good working relationships with - and are very large multinational mining companies like BHP Billiton etc,
The company they are buying is already established (over 30 years from memory) and has 70% market share.

And yes, as you point out, following this company closely since 2005 has given me a lot confidence in the management. They have certainly done a lot of research on the South American market.

It certainly seems like business as usual.... Hopefully gangland drug slayings are not common in Antofagasta!!? ;)

Sauce
20-10-2009, 11:27 PM
Colin - At risk of regurgitating way to much old info into this thread - here's a snippet from the company that mentions level of prior research conducted of South American market and the government support:


Using Austin’s existing knowledge of the South American mining and resources market through Westech’s long-term presence in the region, business development activities are already well underway in order to take advantage of the opportunities that exist in the region.

Over the course of the past few years, significant effort has been expended in analysing and understanding the South American market, the nature of mining operations and the requirements of the major miners. In more recent periods, extensive meetings have been held with key customers to explore long-term and expanded business arrangements as a result of Austin establishing a direct manufacturing presence in the region. The capabilities of Austin, together with the operational advantages of its Westech and JEC product ranges, engineering design expertise and international presence, have already been demonstrated successfully to customers. Support for Austin’s presence in the region has already been acknowledged and confirmed by major customers, as evidenced by the award of new contracts.

The potential availability of attractive Chilean government funding to assist with capital expenditure programs will provide Austin with the opportunity to improve and expand the production equipment and facilities that will be acquired as part of the acquisition. Studies are already underway to determine the cost and logistics of constructing a new 2,500m² workshop and associated office space for the La Negra facility in order to expand and improve productive throughput, quality and operational performance.

Sauce
22-10-2009, 09:37 PM
Some more key tidbits from the company regarding Chile operations....



Chile operation has received orders for 26 tray bodies in the first 2 weeks of operation from Chile’s major copper miner

Forward workload very strong for the interim period with a carry-over of 7 tray bodies from

Conymet and the new orders giving the operation over 50% of the budgeted orders for the full year. Further orders are expected over the coming months

Enquiry levels for tray bodies continuing at good levels

Construction of a new workshop in Chile will be fast-tracked to meet demand for the company’s JEC range of products

Antofagasta facility will service Chile, Peru, Columbia and Argentina markets

Chile operation expected to increase work levels over the year after significant enquiries and orders

COLIN
23-10-2009, 10:04 AM
Sauce: Thanks for covering those South American issues - they certainly haven't gone into it blindly. Gives me a lot more confidence in adding to my holding.

Cheers.

Sauce
23-10-2009, 12:43 PM
Hi Colin
I also remember they specifically searched for a new director who had international acquisition/expansion experience, and I believe Paul Reading was subsequently appointed.

I think you can sleep pretty easy adding to your holding at these levels. Although its starting to be re-rated, its still trading at least 20% below its peers. IMD BKN RCR ESSA etc

Completely ignoring the dilution of new share issue vs value added from Conymet acquisition: the historical EPS of 31.5 gives us a current PE of about 8.8. A PE of 11 seems pretty undemanding for a company with such an incredible rate of historical growth, and with so much in the pipeline going forward, and to bring it in line with similar companies. That should support a share price up to around $3.50 on historical numbers.

The share price has mostly recovered from the effects of the global financial crisis. But my hunch is that this is still one of those great value opportunities where the share price will benefit from both a PE rerating (currently underway) and high earnings growth - compounding future returns for current holders. If they come even close to obtaining double their australian revenues from South America over the next few years, AND the market prices them on a PE of 11... well you get the picture!

Of course maybe there might be a good reason why this company trades at a discount to it's peers, that I am not experienced enough to understand, and it will always be this way....Plus there are probably many opporunities out there like this right now.

Cheers

Sauce
11-11-2009, 02:54 PM
Looking forward to the AGM presentation on Friday.
I expect Australian operations will be picking up - North American will be flat - South American expansion to be going well, with strong orders and forward workload for current operations there.
Outlook and EPS guidance will be interesting!

Sauce
13-11-2009, 04:33 PM
Reasonably disappointing forecast for the first half considering the dilution from cap raising. Outlook for South America is still the most exciting prospect... Share price might get knocked around by the short termers.

COLIN
23-11-2009, 09:24 PM
Sauce: Just scanning my portfolio tonight I was recalling an earlier post of yours wherein you expressed puzzlement as to why ANG didn't seem to be enjoying quite the same attention as RCR. It appears that the market is slowly waking up to the situation that you identified, and has been adjusting accordingly, i.e. compare the movement in the relative sp's over the past few weeks. RCR did have a remarkable run (I made 100% before ditching) but it has gone nowhere since.

Sauce
24-11-2009, 02:27 PM
Sauce: Just scanning my portfolio tonight I was recalling an earlier post of yours wherein you expressed puzzlement as to why ANG didn't seem to be enjoying quite the same attention as RCR. It appears that the market is slowly waking up to the situation that you identified, and has been adjusting accordingly, i.e. compare the movement in the relative sp's over the past few weeks. RCR did have a remarkable run (I made 100% before ditching) but it has gone nowhere since.

Thanks Colin. From the recent share-price action it appears clear that the market had been pricing in a decline in earnings (Which is why it was trading on such a low PE) and was suprised on the upside that the company is forecasting roughly flat earnings for HY10 (in fact looks like a slight decline considering dilution from cap raising) and growth FY10.

Personally, I was expecting a bit better. The company was making pretty strong hints that orders were recovering well, and I was expecting this to translate into a better forecast for the first half, boosted by South American operations. Perhaps I was a bit optimistic in hindsight, considering current economic issues.

On the other hand, the company seems to have proven to the market that they are not going to suffer earnings dissapointments and WHEN the mining companies resume their growth plans, Austins own growth path will continue, but in the meantime they can hold their own. This has removed a lot of the risk from the share, hence the increase in PE.

Lets hope there is plenty of evidence of increasing sales at the HY point. I don't doubt that there will be, Austin are the ones speaking to their customers and I feel confident they understand their market well. Until there is more evidence of increasing sales here and abroad I think it may be fairly priced around $3-$3.10 mark - but not long to wait to find out.

Regardining RCR vs ANG - yes, I think ANG is a much better company and I am certainly pleased that the market is starting to agree - especially since I am so overweight in this stock.

My strategy is long term - I think this company will grow into a BKN over time, and as it grows in size, the insto's and funds will get on board, the PE will be re-rated and current shareholders will be well rewarded.

Have you looked at FGE? - another ANG in the making.

Sauce
24-11-2009, 02:49 PM
Also
Note that in the msot recent presentation the company has stated they are conducting serious due dilligence on an Australian firm at the moment.

I expect we will see more aquisition activity this year.
Cheers
Sauce

COLIN
25-11-2009, 10:03 AM
Thanks Colin. From the recent share-price action it appears clear that the market had been pricing in a decline in earnings (Which is why it was trading on such a low PE) and was suprised on the upside that the company is forecasting roughly flat earnings for HY10 (in fact looks like a slight decline considering dilution from cap raising) and growth FY10.

Personally, I was expecting a bit better. The company was making pretty strong hints that orders were recovering well, and I was expecting this to translate into a better forecast for the first half, boosted by South American operations. Perhaps I was a bit optimistic in hindsight, considering current economic issues.

On the other hand, the company seems to have proven to the market that they are not going to suffer earnings dissapointments and WHEN the mining companies resume their growth plans, Austins own growth path will continue, but in the meantime they can hold their own. This has removed a lot of the risk from the share, hence the increase in PE.

Lets hope there is plenty of evidence of increasing sales at the HY point. I don't doubt that there will be, Austin are the ones speaking to their customers and I feel confident they understand their market well. Until there is more evidence of increasing sales here and abroad I think it may be fairly priced around $3-$3.10 mark - but not long to wait to find out.

Regardining RCR vs ANG - yes, I think ANG is a much better company and I am certainly pleased that the market is starting to agree - especially since I am so overweight in this stock.

My strategy is long term - I think this company will grow into a BKN over time, and as it grows in size, the insto's and funds will get on board, the PE will be re-rated and current shareholders will be well rewarded.

Have you looked at FGE? - another ANG in the making.

Thanks, Sauce. I'm relying on you to keep closely abreast of this one!

Re FGE: I did look at it a few weeks ago, but got kind of uncomfortable with their meteoric rise to date - how sustainable is that? Still, their P/E is relatively modest. I will take a further look when I have time.

Cheers.

Sauce
25-11-2009, 11:35 AM
Thanks, Sauce. I'm relying on you to keep closely abreast of this one!

Re FGE: I did look at it a few weeks ago, but got kind of uncomfortable with their meteoric rise to date - how sustainable is that? Still, their P/E is relatively modest. I will take a further look when I have time.

Cheers.

I don't have as good an understanding of their growth strategy as I feel I do with ANG (my laypersons understanding of course - I am no expert!) but fundamentally it looks very good. If you review their profit and revenue increases, the share price rise is well founded. As you say, PE is still undemanding for such a high growth company.

I dont own any but I am keeping a close eye on it. I am going to read through their past annual reports tonight for some bedtime reading.

In the meantime - re-ANG - time to put it in the bottom drawer and peak again at HY. Once the juice really starts flowing from South America there will be huge upside IMO.

Cheers

Sauce
25-11-2009, 11:40 AM
Woops - re potential aquisition in Australia - I mean WITHIN a year, not this year.

Also reflecting on future potential with ANG - they are expecting completion of new production facilities in South America to manurfacture JEC products - this should be within 12 months as well. I really think this company is a no-brainer for growth well into 2012 and beyond.

drillfix
25-11-2009, 12:19 PM
Sauce, this seems good~!

But, what is it with certain companies that start with the letter A in their codes and have excellent charts.

ANG, great chart
ACR, great chart
AQA, great chart
AMX, great chart

Check them out, all fantastic charts.

I could go on but I mean sheez, seems to me that I am alphabetically investing badly..LOL :rolleyes:

Sauce
26-11-2009, 03:48 PM
Sauce, this seems good~!
I could go on but I mean sheez, seems to me that I am alphabetically investing badly..LOL :rolleyes:

I can just imagine the title of the book drillfix. :)

Note re ANG - Mr Buckland purchased a cool 144,000 dollars worth on market today.......

Always a good vote of confidence when the MD is investing his hard earned dollars..... Good things to come IMO.

Sauce
26-11-2009, 08:12 PM
Woops woops all wrong
I missed the Appendix3B - its actually Mr bucklands performance bonus! A wee freebie from us to you Mr Buckland.

COLIN
08-12-2009, 01:23 PM
Thanks, Sauce. I'm relying on you to keep closely abreast of this one!

Re FGE: I did look at it a few weeks ago, but got kind of uncomfortable with their meteoric rise to date - how sustainable is that? Still, their P/E is relatively modest. I will take a further look when I have time.

Cheers.

I did end up buying a modest few FGE and am pleased with their continued progress. Powering along quite nicely, with a lot of buyer interest. Should really add to my holding but, again, I am a little reticent because of their rapid ascent. Still, their fundamentals look good.

I see that there is an earlier thread for FGE so I will place any future comment there.

Sauce
21-12-2009, 07:57 PM
In brief ... Austin Engineering, komatsu
Staff reporters, 16 November 2009

THE BIG pay-off for Austin Engineering’s move into South America will be profits similar to the Australian group’s domestic earnings, according to Argonaut Securities, which noted this week integration of the Chilean operations bought from Conymet “is progressing well”.
The observation was based mainly on presentations by Austin CEO Michael Buckland and chairman Peter Fitch at the company’s annual general meeting, where there was an impressive upbeat tone, Argonaut said.
“The company is seeing a number of positive signs for growth and investment (with the likes of Rio and Vale recently outlining significant capex plans for 2010),” the broker said. “A softer first half of FY10 (as expected) is likely to be replaced with a much stronger second as clients’ capex plans are reinstated.
“We believe the outlook and opportunities in this [Latin America] region are very positive and that over time Austin could well see South America become as big a contributor to group earnings as the existing Australian operations.”
Austin Engineering reported net profit after tax of $A14.8 million for the 2008-09 year (ended June 30) on 69% higher revenue, year on year, of $A179.32 million. The recent purchase of the Conymet steel dump-truck body business (now called Austin Ingenieros Limitada), coming on top of the previous acquisition of a similar business in the USA, Westech, has made Austin the world’s biggest truck dump body producer outside of the big mining equipment manufacturers.
The AGM heard that the company’s Queensland operations began the 2009-10 financial year with a “solid workload well into the 2010 calendar year, mainly servicing the equipment requirements of miners in the Hunter Valley and Bowen Basin”.
“In more recent weeks further orders have been received for dump truck bodies for the Bowen Basin. Of particular note is an order for eight ultra-class bodies for a major OEM which will be the first time that these large bodies will be manufactured and delivered in Australia,” Austin chairman Peter Fitch told the meeting.
“Business conditions in Western Australia are improving with orders now being received for dump truck bodies for manufacture and delivery into the beginning of the 2010 calendar year.”

Queensland trucks
THE ultra-class trucks are Komatsu 960E electric-drive units going into Rio Tinto’s Hail Creek coal mine in the Bowen Basin. Rio is one company said to be still buying large mining trucks on both sides of the country.
Meanwhile, Komatsu has its first giant PC8000 electric/hydraulic face shovel due to arrive in Western Australia – at Griffin Coal’s Collie operations – towards the end of the year on a March 2010 commissioning schedule.

Sauce
21-12-2009, 08:10 PM
Austin sees loads of potential
Richard Roberts, 22 June 2009

AUSTIN Engineering has plans to expand its large mining truck dump body business into Africa and other key global markets, possibly through further acquisitions, after it wraps up a deal to acquire Chile’s “leading manufacturer and supplier of steel dump truck bodies”, understood to be Conymet Ltda.

Austin chief financial officer Colin Anderson was prevented by non-disclosure commitments from commenting on the company to be acquired, however, Conymet is Chile’s largest mining truck dump body maker, it is one of the world’s biggest non-OEM body suppliers, and its main manufacturing plant is in Antofagasta in northern Chile. Its customer base includes the big miners Austin has included in its presentation descriptions of the Chilean company it proposes to buy for $US19.6 million ($A24.8 million).

The Australian Securities Exchange-listed Austin is in the process of raising $A31 million via an institutional placement and share purchase plan with a view to proceeding with the deal in Chile, entering a joint venture with an engineering company in Brazil, and retiring some of its debt. It is completing due diligence on buying 100% of the Chilean company.

“We’re not in a position to divulge who the acquisition target is at this point in time,” Anderson told HighGrade.

Truck dump bodies can constitute 10-15% of the cost of a large dump truck but they are not a component that is easy or cheap to ship around the globe with the other key parts of the truck and so the major original equipment manufacturers (OEMs) sub-contract out production of dump bodies in many parts of the world. The bodies built to OEM specifications are standard units, but smart designs have made specialty dump bodies lighter, still durable, and so able to increase the payload and productivity of expensive mining trucks.

Austin paid $US19 million in late 2007 for US-based Western Technology Services International Inc (Westech), which was then a $US36 million-a-year business. Westech has since been described as having more than 50% of the world “non-OEM” mine truck dump body market and being the major non-OEM dump body supplier. The Wyoming company is one of three big American non-OEM dump body manufacturers, the other two being Illinois-based Philippi-Hagenbuch and Texas-based Trinity Industries.

When Conymet bought the Duratray lightweight truck dump body IP and division of Australia’s Pacific Dunlop in 2001 the Chilean company was described as the world’s third largest dump body manufacturer.

“I couldn’t tell you what the market share [of the leading market players] is,” Anderson said. “Non-OEM body manufacturers such as Westech, DT-HiLoad, Philippi, Trinity ... all occupy their own position in the market. Mining customers have their favourites.

“I wouldn’t be able to tell you the relative positions of the players in the Chilean market.”

Perth-based Argonaut Securities, joint lead manager of Austin’s $A26 million share placement with Southern Cross Equities, said this week in a research note the acquisition in Chile would give Austin “an immediate, established and dominant position in the Chilean market, while the Brazil JV provides cheap entry into the large Brazilian mining market where there is little local competition”.

“Assuming $31 million is raised [including proceeds of the SPP], we expect post acquisition a comfortable gearing (net debt/equity) level of around 19%, well down from the 56% ratio at 31 December,” Argonaut said.

“The move into South America provides [Austin] with very attractive growth opportunities through exposure to major players in a significant mining region.”

In an earlier research report which expanded on Austin’s growth prospects in South America, Argonaut said there was “only one serious market player in Chile and none in Brazil”.

In its ASX announcement, Austin chairman Peter Fitch said the Chile deal was expected to be completed next month.

“Following significant analysis and business feasibility studies, Austin has entered into a non-binding MOU – pending a binding agreement which is in the process of being completed – to acquire the business and assets of the leading manufacturer and supplier of steel dump truck bodies in Chile,” he said. “The Chilean business has a 36-year operating history and dominant market share of approximately 70% in the country. Its client base includes miners and OEMs well-known to Austin, with equipment needs very similar to Austin’s existing product range. Long-term standing supply contracts exist with major regional miners including Codelco, BHPB, Anglo American, Xstrata and Antofagasta Minerals.

“Over the past three years, the business has generated average EBITDA of $US6.2 million at an average operating margin of 32%. For FY2008 (January 1 to December 31), the business generated EBITDA of $US6.4 million at a margin of 34%.”

Anderson told HighGrade Austin, with its manufacturing facilities around Australia and in the US, was producing OEM-spec truck dump bodies and its specialty bodies.

“The OEMs have obviously got their own designs of dump truck bodies but it’s perhaps not the greatest area of specialty for them,” he said. “A lot of what they do concentrates on the running gear associated with the truck, so at the local level they obviously need people to still manufacture dump truck bodies for them, so that’s where we’re more than happy to participate with them.

“But while the OEM bodies are good and they’ve certainly got their supporters, other customers prefer something that’s a bit more tailor made and a bit more suited to the particular needs of their mine site, so that’s where we can apply the Westech specialised designs, which can help them to maximise productivity.

“The market does tend to be a bit fragmented and a bit regionalised. You do need specialised facilities to produce these dump bodies. On an international basis there’s not really one company, probably apart from us, who can pull it all together and give customers a product range that isn’t only dump truck bodies, but also excavator buckets and similar material handling market.

“We’ve had a look at [markets such as Africa and Russia] a couple of times.

“These are obviously targets for us.

“We’ve certainly made good inroads into getting the Westech dump body range into Australia, and we are building an international platform for growth in other markets.”

Sauce
21-12-2009, 08:19 PM
On the rebound
Richard Roberts, 31 August 2009

LOST (somewhere) in the recent announcement by Australia’s Austin Engineering that it had acquired Chile’s biggest steel mine dump truck body supplier was the detail about not acquiring all of the Medel family-owned enterprise. What’s left includes Conymet Duratray, which now intends to more aggressively market its rubber trays in key world markets, including Chile.

What this means for Austin in the wake of its $US19.6 million re-entry into Chile is open to speculation, since some close to the mining equipment supply business say rubber dump trays will always represent a small niche market segment. Conymet itself claims to have sold more rubber bodies than steel bodies in Chile in recent years, while worldwide the sales split has been 50-50 according to the head of the company, Marco Medel.

Austin added the Conymet La Negra plant near Antofagasta to its WesTech business in the US and its Australian mining parts activities. It paid $US19.6 million for the factory, one of five Conymet operations in Chile, and is still negotiating with the Medels to buy more land adjacent to the plant.

Marco Medel, based in Melbourne with Conymet Duratray, told HighGrade the transaction with Austin didn’t include the Conymet name or other mining supply operations in Chile. He couldn’t comment on whether Conymet Duratray was currently for sale.

The five Medel brothers can’t compete with Austin in the steel dump truck body market in Chile for five years.

For Austin chief Michael Buckland it is a case of second time lucky in Chile. Three years ago he engaged a senior Conymet executive to act as his licensee (Cainsa) in Chile. After a promising start, the relationship fell apart and Buckland found himself looking for another way into the big South American market, via the same Chile front door.

Asked why Austin had not tried to buy all of the Conymet dump body business, Buckland told HighGrade from Chile: “Everyone has a view, but the chief reason is that our expertise lay in steel.

“The majority of the market is steel trays with the rubber side being a niche market and has different logistics in-terms of manufacture and support. You will see that at some sites rubber is increasing while at others it is being replaced due to high maintenance costs by the steel trays.

“I have no doubt that a number of Chilean customers have switched to rubber once it came under the control of Conymet, but at the same time the increase in the number of steel trays far exceeds that of the rubber. There will always be a market for Duratray due to conditions in some mines, but it will always remain a minor player in the game.

“I have the belief that a little competition is good for the market and Austin Engineering.”

Duratray may have other ideas about the level of competition provided.

The Duratray suspended rubber dump body was invented by the SKEGA Company of Sweden in the 1970s, with the first installation at a quarry in 1975. It was designed not only to protect the rear dump trays of mining trucks and, being lighter than conventional steel bodies, boost payload capacity, but also reduce loading and discharge noise, and material carry-back. For the next 15 years SKEGA marketed the Duratray primarily to hard-rock mines and quarries in Europe and Australia, and bodies even made their way to North America despite the lack of SKEGA representation in the region.

The technology was sold to Australia’s Pacific Dunlop in the early 1990s and in 2001 Conymet Ltda of Chile bought the Duratray division from Pacific Dunlop. The Chilean company added manufacturing capacity to meet demand from large mines in South America, the Pacific Rim and North America.

Conymet Duratray now claims to have a worldwide population of more than 1000 rubber bodies, and a customer list that includes BHP Billiton, Rio Tinto, Codelco, Anglo American Corp, Vale, Freeport McMoRan Copper & Gold, Grupo Mexico, Barrick Gold and a range of other large miners.

Luis Rojas, general manager of Duratray International, told HighGrade: “In Chile our focus was the TAE steel body [business sold to Austin] and Duratray’s suspended dump bodies, but it was a no brainer for us. Our Duratray success was surpassing our steel market. Our Chilean companies do have other products and services they provide, unlike Australia, but there is no doubt that concentrating full time on our Duratray SDB in Chile now will be a great benefit.

“We are a significant player in the market now – Duratray and the suspended dump body are changing people’s perspective more and more [compared with] the Skega and Dunlop era as they begin to realise issues encountered 10 years ago have been drastically improved.

“After all, a significant amount of engineering improvement has occurred over the last 10 years in design, steel and rubber. Each mine that we go into realises very quickly that the Duratray SDB can work and last longer than a steel body, reducing a significant amount of maintenance and cost. Duratray SDBs are much lighter than our OEM competitors’ steel bodies and have an advantage in payload and last longer. We might not be lighter than ultra light bodies like DT [HiLoad], but our bodies are not throw away and will outlast light throw away bodies by six times their life span.”

The Duratray suspended dump body IP and the remaining Conymet manufacturing facilities stood apart from the Austin deal and would continue as is, Medel said.

“I don’t think the [Medel] brothers are ready to exit the mining business,” said a mining equipment supply sector operative who asked for anonymity.

“My understanding is that when Conymet purchased Duratray from Dunlop in 2001 it sold the steel bodies and rubber bodies in about equal proportions. They might have sold 100 of each per year or something like that. But as the Duratray rubber bodies have become more mature, and as the advantages have become better documented – particularly with reduced maintenance and this issue of having to completely overhaul a steel dump body every 2-3 years – they’ve started to sell more of the Duratray bodies.

“You can imagine just repairing them [steel bodies] on a regular cycle is onerous when you’ve got 100 big trucks in your fleet, which some of those big copper mines in Chile have.”

Austin has become the world’s largest manufacturer and supplier of steel dump truck bodies outside of the major mining equipment manufacturers such as Caterpillar and Komatsu.

Sauce
21-12-2009, 08:34 PM
Riding on the backs of giants
Richard Roberts, 13 July 2009

AUSTRALIAN companies are set to dominate global mine-truck dump body manufacturing activity outside of North America. But how tenuous is their market hold given the competition? HighGrade asked two industry insiders – one a dump-body sales veteran, the other a senior manager with an equipment supplier – for their views.

American earthmoving machinery giant Caterpillar, it’s Japanese rival Komatsu, and other big mining equipment makers Terex, Liebherr and Hitachi, naturally enough want to supply the dump truck trays that make up 10-15% of the initial value of a truck sale to a mine operator or contractor.

Caterpillar, and increasingly the others, have extensive maintenance and repair contracts (MARCs) at mines covering truck fleets and other equipment. Spare parts and services supply, with good margins, make MARCs lucrative and they have become a vital part of the business original equipment manufacturers (OEMs) do in the global mining industry. It’s a business worth tens of billions of dollars a year and parts and services supply makes up more than half of it.

Many small companies operate in this space.

Big and bulky dump truck bodies don’t cover long transport distances well and so most are made and supplied near equipment delivery points. ASX-listed Austin Engineering and Brandrill see supplying dump bodies, including the mine MARC-style business that goes with them, as an attractive niche activity. Other Australian groups such as Queensland-based Swift Engineering and Jaws Buckets & Attachments are pursuing it as a profitable adjunct to equipment parts supply businesses, similar in focus to US-based groups such as Philippi-Hagenbach and Trinity Specialty Products.

Wyoming-based Western Technology Services International (WesTech), bought by Austin Engineering in 2007 for $US19 million, is said to have more than 50% of the world “non-OEM” mine truck dump body market and to be the major non-OEM dump body supplier. Much of its business is derived from making OEM-approved dump bodies for mines, though Austin is increasingly pushing its own designs and service contracts.

It is making its second foray into the big South American market with its proposed deal to buy Chile-based Conymet Ltda from Antofagasta’s Medel family. An earlier attempt to get a foothold in Chile via a Conymet rival turned sour, but the 36-year-old Conymet is the major player in the country and interestingly enough has converted a number of local mines to the rubber suspended dump bodies it acquired through its 2001 purchase of Duratray from Australia’s Pacific Dunlop.

Conymet is also one of the world’s biggest steel dump-truck tray manufacturers and suppliers.

An Australian-based insider in the mining dump-truck body business, who noted the corporate activity in the sector and didn’t want to be named in this report, said the industry remained fragmented despite the consolidation occurring (including Brandrill’s effective takeover of Chile’s DT-HiLoad lightweight body IP).

“The biggest competition remains the OEM – Caterpillar, Komatsu, Terex – who fight tooth and nail to put their own steel bodies on and then they have that fabricated by Austins, or Pacific, or someone else,” said Insider One.

“But they want to put that on with their design, with their maintenance and repair contracts on them, so they can charge them upfront, by the month, by the tonne and by the square metre of steel plate put back in. The business model of the MARC contract is a gold mine.

“You’ve got a $US50 billion a year company such as Cat, which wants to be $60 billion, and we’re just an annoyance along with some of the other third-party dump body suppliers.

“The big mines are looking for comfort, uptime guarantees, high-level warranties, guaranteed availability of spares. The OEMs do manage to muscle into the MARC contract the dump bodies fairly quickly. It makes sense for them, and the mine operator.

“If they’ve got 60 trucks, doing 6000 hours a year ... we reckon dump body maintenance is costing them $10/hour, so there’s, on one mine, nearly $A4 million a year and I would estimate that 40% of that would go into gross profit to the OEM. It’s another $1-2 million just in that mine just on dump body repairs. He’s [the OEM] already there anyway; already got the supervisors, the infrastructure, the accounting systems etc, for the important things that only he can do, because we can’t touch the transmissions or any of that sort of stuff.

“So the issue of him doing the dump bodies is logical and convenient.”

However, the seemingly small openings in the market levered open by the likes of Austin Engineering, Conymet, DT-HiLoad, Duratray, Philippi-Hagenbach and others are giving equipment manufacturers food for thought, according to Insider Two, a manager with the Australian distribution business of a major international OEM.

“I think that, personally, going forward [the OEMs] are all looking at going that way in the long term,” he said.

“What’s happened in the past five years is because there’s been such demand in the market for trucks and equipment generally, the equipment suppliers have probably taken the stance that it was hard enough keeping up with demand for the actual trucks without trying to make a body to suit particular mine requirements.

“That’s probably where the doors have opened up for the Austins and some of these other companies.

“But going forward I tend to agree that if you sell a truck and it’s worth $US4 million, a fair proportion of that is the tray and we’re not capturing that as a sale. So when we put a budget in for a year we put it in for $4 million or whatever it is and you’ve got to take off $400,000 for the tray. Certainly we’re not capturing that cost and doing the mark-up, and managing the build.

“So I think it’s coming, I honestly do, I just don’t know when.

“But the fact that some of these manufacturers, such as Austins, which is looking at lightweight bodies now which gives them more options and variances to the standard, is able to provide a range of choices gives them a strong competitive position. We’d probably still have a standard body and if you wanted something outside the standard you’d have to go back down the road. We won’t make 10 different bodies for 10 different trucks, I don’t think.

“But certainly in this part of the world large companies are looking at almost a throwaway style of body and that’s what we’re seeing, whereas years ago trays were built to last a long time. The money is in the payload, not carrying the steel [tray] around the mine site. So they’re all looking at going to a lightweight body and almost sizing the body to the lightest material on site as well and then payload managing the truck. They used to size it to the heavy material and then obviously they would be playing catch-up on the light overburden stuff.

“So the philosophy I think has almost changed a quantum the other way.

“Again, we wouldn’t and couldn’t compete with that unless it came out of our factory in, say, America, otherwise we’d probably have to go to Chile or somewhere to get those made, or China even might be an option.”

Insider One said alternatives to steel dump bodies were popular in some parts of the world and mainly on large-to-ultraclass mining trucks.

“The standard steel bodies can certainly be expensive to maintain,” he said.

“At the same time there’s another strategy where you just take a lightweight body and throw it in the spinifex at 30,000 hours – the Rio Tinto WA-type philosophy – but the body will cost them $300,000-400,000 and they’ll throw it at 30,000 hours approx, so long term it’s cost $10-13/hour.

“An alternative, the rubber-type bodies, have been run in really hard conditions for 60,000-80,000 hours and the maintenance costs long term are $3-4/hour – basically $10/hour less. And that’s what some people in the new engineering asset maintenance realm are saying represents the lowest life cycle cost.”

Insider One said Austin Engineering was set to emerge as the biggest player in non-OEM dump body supply but “they’ll still be subservient to the OEMs”.

“It’s very difficult and complex to be both a competitor and a supplier to a company like Caterpillar,” he said.

“It’s a delicate business indeed.”

COLIN
21-12-2009, 10:31 PM
Thanks for those articles, Sauce. Some useful information there, particularly the competition from the rubber alternative and the lower hourly cost thereof. We'll have to try and keep a close eye on how things are working out, particularly on the South American scene.

modandm
22-12-2009, 09:30 AM
2nd to NPX, ANG has been my best pick of the year - very pleased.

Thanks to the original drillers and diggers thread which led me to research ANG.

Thanks for the articels - definatly food for thought on two fronts.

1. OEM's
- seem unlikely to be able to compete with ANG and others due to lack of customisation.
- if they would like to compete how would they best do so - takeovers?

2. rubber bodies
- would really have to do more research on this. seems like steel still makes up the most of the sales (and certainly the OEM contracts)
- besides lack of manufacturing expertise why would ANG NOT want to move into rubber bodies - i guess they would be cometitively weak to the opposition - easier to promote steel and win contracts
- a good question to ask at next shareholders meeting - "what is the threat of rubber trays to ANG in future?" "what investments in R&D are ANG making to to combat this threat and ensure ANG's cometitive position is maintained?"

merry xmas all

Sauce
22-12-2009, 01:31 PM
2nd to NPX, ANG has been my best pick of the year - very pleased.

Thanks to the original drillers and diggers thread which led me to research ANG.

Thanks for the articels - definatly food for thought on two fronts.

1. OEM's
- seem unlikely to be able to compete with ANG and others due to lack of customisation.
- if they would like to compete how would they best do so - takeovers?

2. rubber bodies
- would really have to do more research on this. seems like steel still makes up the most of the sales (and certainly the OEM contracts)
- besides lack of manufacturing expertise why would ANG NOT want to move into rubber bodies - i guess they would be cometitively weak to the opposition - easier to promote steel and win contracts
- a good question to ask at next shareholders meeting - "what is the threat of rubber trays to ANG in future?" "what investments in R&D are ANG making to to combat this threat and ensure ANG's cometitive position is maintained?"

merry xmas all



Thanks for your replies Colin and Modandm.

It's quite a fascinating niche that they operate in. I imagine there would be some interesting politics!!

It doesn't feel like the rubber trays are much of a threat. It's not like they are new technology, they have been around for a long time already and as Austin says:

“There will always be a market for Duratray due to conditions in some mines, but it will always remain a minor player in the game."

Re - OEMs - I guess they have the firepower to set up competing manufacturing operations if they wanted to (Or just buy Austin?!). The 'insider' in the article suggests the competition is for the maintenance contracts - that the OEMs are trying to get their own bodies into the mines tied up with the maintenance contract. So, the way I read it, this still requires outsourcing the tray manufacture to Austin, but of OEM design rather than say - Westech. Presumably this means the OEMs have maintenance facilities on the ground?

Anyway competition means there is money to be made :) All things considered, it looks to be a few more stellar years ahead for Austin.

Regards,

Sauce

Sauce
23-12-2009, 05:04 PM
I just emailed the MD regarding this he does not see the rubber business as a threat. And he says they have seen the market for rubber trays declining in both South and North America.

He also says Austin do not regard the OEMs as a threat, because the tray is such a small part of the overall cost of the truck. He says they rather spend their research money on the truck as there is more money in that for them.

COLIN
23-12-2009, 08:54 PM
I just emailed the MD regarding this he does not see the rubber business as a threat. And he says they have seen the market for rubber trays declining in both South and North America.

He also says Austin do not regard the OEMs as a threat, because the tray is such a small part of the overall cost of the truck. He says they rather spend their research money on the truck as there is more money in that for them.

Thanks, Sauce, for your reassuring news.
Have a great Christmas - I hope the weather is pleasant in the Cayman Islands!
Cheers.

Sauce
23-12-2009, 10:36 PM
Thanks Colin, you to.

I think, reflecting on the comments in that article and the MD's answers to my email, in the long term the OEMs could decide to go after a more of a slice of the dumb tray pie, but It's not certain or even likely they will and, if they do, by that time ANG will have firmly established themselves as the global market leader and may well be 2-3 times the size it is now. It's certainly not going to worry me.

Happy holidays and time to put ANG in the drawer once again and pull it out come HY anouncement and juicy business updates :)

Cheers
Sauce

modandm
05-01-2010, 04:12 PM
ELATION!

UPDATE: A GREAT NY PARTY FOR ANG SHAREHOLDERS

After flirting with $3 for several weeks and making higher lows (wish i could post chart) ANG broke out rising to $3.03. This was followed by a move to $3.20 and has since gone as high as $3.43 before pulling back. It now sits at $3.25.

ANG really is ze best of ze best!:D

Sauce
05-01-2010, 09:15 PM
ELATION!

UPDATE: A GREAT NY PARTY FOR ANG SHAREHOLDERS

After flirting with $3 for several weeks and making higher lows (wish i could post chart) ANG broke out rising to $3.03. This was followed by a move to $3.20 and has since gone as high as $3.43 before pulling back. It now sits at $3.25.

ANG really is ze best of ze best!:D

Got to be fair value now - a bit of future growth priced in now. I won't be surprised if this uptrend continues though. Next update not to far away - hopefully that will be the time to get excited!

drillfix
06-01-2010, 12:10 PM
Everytime I turn my head this stock has moved up another 30 or so cents.

Sauce, are you saying that the true fair value on this co approx is now?

modandm
06-01-2010, 08:41 PM
if i may...

I tend to agree with Sauce that future growth is now priced in and this stock is no longer a bargain. BUT it still merits a hold in my portfolio. It is also in a proven uptrend - so should continue to perform.

Shareholders are really awaiting the next announcement to see how progress in Chile, the continued intergration of Westech and general sales are tracking.

Until the time that this is announced - ANG sits on an appropriate PE (~12)- albeit a relatively low PE - reflecting its small size and risk. I should point out that a conservative forecast growth for ANG is >10% for the next 3 years witch does put ANG on a good PEG ratio close to 1.

Ultimately the entire market is becoming more fully priced and it is up to the individual investor to determine whether the ANG equation is the best use of their funds.

Regards

Sauce
06-01-2010, 10:14 PM
Hi Drillfix, Modandm

I totally agree with your post Modandm - ANG is not the rediculous bargain it was, and has certainly caught up with the other listed mining services companies. but I suspect your 3 year growth estimate will prove to be very conservative.

Drillfix: I think ANG is still an excellent buy for investors at these levels. Its certainly no where near overvalued. This company has grown a phenomenal amount in just 5 years. In fact their earnings have grown for the last 5 years by 56.82% per annum compounding year on year!

Clearly that rate of growth is not sustainable forever, however they are at the beginning of a huge international expansion. And as they grow they are consolidating this high margin industry and putting themselves in position to dominate the global market. I am no expert but I personally think have a very good chance of doubling their earnings again in the next 3 years.

What PE ratio would this sort of growth rate command? I guess it depends on how predictable and assured the growth is? If the rest of the market thought the growth was going to be as strong and as likely as I do, it would probably be trading on a PE of 15 or 20? I guess it all depends on your perspective. But based on the perceived risk and comparison with similar companies 11-12 seems fair (as Modandm has pointed out).

The current PE of 10-11 at least means ANG has at least caught up with its peers. In recent times ANG was trading at a lower multiple than almost all of the other listing mining service companies.

Although back in 2005, before their stupendous growth, the average annual PE was about 17.

To put myself out there - here's my completely unscientific forecast (guess is probably more apt) for 2010 results: 1H ebit 11m 2H ebit 15m. FY EBIT 26m. EPS 37.7cps. Current forward PE of 8.62.

I also think FY11 (and FY12) will see higher rates of growth than FY10 - not only will the market be stronger, but ANG will have JEC production facilities up and running in South America, new workshops built, joint venture in brazil and other new revenue sources.

I also have a feeling we may see another acquisition this year or next - probably smaller though - they have already mentioned they are running the ruler over some Aussie businesses.

The future will come that wee bit clearer at HY announcement, I am very much looking forward to reading what they have to say.

CHeers

Sauce

drillfix
06-01-2010, 10:46 PM
Thanks Sauce, for your more than very detailed post.

To be completely honest with you, I am drawn to the stock by its chart for specifically thinking about swing trading it.

For me it has an easy Dance rhythm or predictable pace which viewing on a chart suits me, BUT like all stocks I am strapped for funds to keep my money locked into too many places due to circumstances.

Its always great to know more about a stock rather than just its patterns or price movements, but this one is on my good looking chart list, thats fer sure ;)

cheers~!

h2so4
08-01-2010, 10:57 AM
For me it has an easy Dance rhythm or predictable pace which viewing on a chart suits me,

Ahh.......you mean more like a Waltz than say a Tango? :D

Well done Sauce or should that be Source?:)

drillfix
08-01-2010, 11:38 AM
Ahh.......you mean more like a Waltz than say a Tango? :D


Hmmm, I dont know H2, I'm not really much of a dancer really let alone know my dances :D

h2so4
08-01-2010, 12:22 PM
Hmmm, I dont know H2, I'm not really much of a dancer really let alone know my dances :D

Well then, I will just have to nominate you for the new TV reality show....... 'Dance with the Shares' :D

drillfix
08-01-2010, 12:34 PM
Well then, I will just have to nominate you for the new TV reality show....... 'Dance with the Shares' :D

LOL, good one there H2, classic :p

Sauce
08-01-2010, 05:48 PM
Well done Sauce or should that be Source?:)

thanks :P like Tomato really lol.

Reflecting on ANG value again (my favourite past time at the moment..) - I just noticed, while fiddling with some sums, that the total shareholder return for the last 5 years, if you take all capital gains and dividends (reinvested), is an average annual return of 58pc per year (now of course, not if you had done this last year!) .

This just happens to be exactly the same figure as their annual percentage increases in earnings over the same period. Suggesting in a round about way that the steady (steep!) long term uptrend is easily justified by its revenue, earnings and profit growth. Therefore share price is not currently overvalued its more likely to be fair valued.

Of course this same sort of analysis that shows how cheap it was during the GFC - while the company was announcing more huge profit increases, the market was destroying the share price.

Would be great to overlay a graph of earnings growth vs share price for a company like ANG. Would highlight how much of a total dream opportunity the GFC has been for the long term fundamental investor/value investors. Unfortunately I am to lazy to work out how to do this.

Efficient market hypothesis is a load of rubbish right?

h2so4
14-01-2010, 12:58 PM
Would be great to overlay a graph of earnings growth vs share price for a company like ANG. Would highlight how much of a total dream opportunity the GFC has been for the long term fundamental investor/value investors. Unfortunately I am to lazy to work out how to do this.



.....or you could just start looking for the next under valued share.

The market wasn't entirely efficient with ANG, so there must be others. All very predictable this stuff 'price follows value'. :D

Whats next on your shopping list?

drillfix
14-01-2010, 01:03 PM
I know your not meant to fall in love with a stock, but is there any rules about Loving its chart??? LOL


Just love the chart on this stock, near perfect 45 degree angle hey~!

COLIN
14-01-2010, 02:25 PM
I know your not meant to fall in love with a stock, but is there any rules about Loving its chart??? LOL


Just love the chart on this stock, near perfect 45 degree angle hey~!

Yes, beautiful to behold, but let's not clasp it too tightly to our bosoms! Unfortunately a turning point will come, sooner or later, and we will need to be on the alert for the signals. I have great confidence that Sauce will look after our interests!

h2so4
14-01-2010, 02:45 PM
I know your not meant to fall in love with a stock, but is there any rules about Loving its chart??? LOL


Just love the chart on this stock, near perfect 45 degree angle hey~!

If it feels good do it. Don't let stupid rules control your behaviour. Be true to your sauce......haha:)

drillfix
14-01-2010, 05:09 PM
Unfortunately a turning point will come, sooner or later, and we will need to be on the alert for the signals.

Ain't that the whole truth and nothing but there Colin.~!

Sauce
14-01-2010, 06:15 PM
.....or you could just start looking for the next under valued share.

The market wasn't entirely efficient with ANG, so there must be others. All very predictable this stuff 'price follows value'. :D

Whats next on your shopping list?

You are right of course. Time is better spent on new opportunities than pondering over past ones! Market inefficiencies will ensure there are always bargains to be found and undoubtedly now is a very good time to be looking for them.

To be honest, my investment strategy is to go deep and long. I.e. only hold a few stocks but make sure they are very high quality companies and hold them long term. I only look at companies that are making money, have high ROE's, comfortable debt, high margin, and have consistently done what they said they would do year after year (good management).

I do not believe that you don't need to do 100+ returns per annum to become rich, in fact you can become rich of a fairly small capital base with single digit yearly returns, compounded over a long period of time. Although I must admit I do try and beat single digit returns through my strategy of ignoring portfolio theory and only holding a few stocks. However I feel strongly that a large portion of the posters in cyberspace share tip land focus on speculative mining stocks offering "potential" gangbuster returns, most of which are burning cash and carry much more risk than people realise. Undoubtely there are some that make this strategy work (by hitting the odd ten bagger for every 5 - 10 duds) but I would guess that if they averaged out all their true returns over a lifetime it is a very hard strategy to be successful with long term.

So, my point is, that I don't scan the entire ASX looking for the biggest bargain, but rather follow only a few companies I feel are very high quality companies, and try and buy when others are selling and the price is cheap.

In fact ANG now makes up a third of the total equity on my personal balance sheet (average entry price $1.57 - first purchase @ 52c and last purchase at 2.68 and and the bulk at $1.40ish). I am totally comfortable with that this makes up such a large portion because I feel I understand the company well enough to sleep at night. I imagine myself as a business "owner" and try and get excited only by positive business developments rather than changes in the share price. Although this is always easier said than done, I feel I am getting better at this all the time.


But in saying all this there is a stock I really like the looks of at the moment. Although I can't take the credit for bringing it, or ANG, to sharetraders attention as others have already done this. But I really like the looks of FGE. I have done a bit of research (annual reports) but I do not feel that I understand the business or current/future prospects enough to have placed the order yet. However fundamentals look very attractive and I like the sector.

At a PE of 10 its not the screaming bargain it was, like ang, earlier last year (its been a ten bagger since then for some lucky people), but still very good value for a company growing as fast as this one. It's prospects for growth may even be better than ANG's in the short term. I believe Colin owns some? and you got them at a good price didnt you Colin?

Anyway, what I am going to do now with FGE is this: I feel their prospects and fundamentals look good enough on the surface to buy just enough of their stock that I feel compelled to try and understand everything I can about them (as a "business owner") - then if I like what I see, I will go deep, and buy as much as I can afford. I find this works well for me because if I don't own any it's hard to motivate myself to really do the hard research yards.

Anyway, long rant, hopefully someone finds it interesting!

COLIN
14-01-2010, 10:02 PM
But in saying all this there is a stock I really like the looks of at the moment. Although I can't take the credit for bringing it, or ANG, to sharetraders attention as others have already done this. But I really like the looks of FGE. I have done a bit of research (annual reports) but I do not feel that I understand the business or current/future prospects enough to have placed the order yet. However fundamentals look very attractive and I like the sector.

At a PE of 10 its not the screaming bargain it was, like ang, earlier last year (its been a ten bagger since then for some lucky people), but still very good value for a company growing as fast as this one. It's prospects for growth may even be better than ANG's in the short term. I believe Colin owns some? and you got them at a good price didnt you Colin?

Anyway, what I am going to do now with FGE is this: I feel their prospects and fundamentals look good enough on the surface to buy just enough of their stock that I feel compelled to try and understand everything I can about them (as a "business owner") - then if I like what I see, I will go deep, and buy as much as I can afford. I find this works well for me because if I don't own any it's hard to motivate myself to really do the hard research yards.

Anyway, long rant, hopefully someone finds it interesting!

Sauce: be assured that I, for one, appreciated reading your "treatise"! Thanks for that. With an investment philosophy such as you described, you can't go far wrong in the long run, even if others might be getting more thrills on a more regular basis. There is just one comment I would make: to have as much as one-third of your portfolio tied up in a single stock, no matter how "blue chip" that stock might seem, is a much higher risk strategy than I would care to choose. (On the other hand, my problem is that I have far too many stocks, with none above 5% and most well below that. I know that I am too thinly spread, but I constantly rake over the portfolio to check whether I have a valid reason for holding each individual one, but with such a spread it is hard to outdo the indexes of course.)

Re FGE: Yes, I bought some at the end of November, at 195. Just flicking through their MD's Presentation this evening, again, I can see why you would be attracted to it: beautifully steady rises in the various graphs, very low debt:equity ratio, 135% 2nd half profit forecast, wide spread of blue-chip clients, etc. Go for it!

Sauce
15-01-2010, 04:09 PM
even if others might be getting more thrills on a more regular basis. There is just one comment I would make: to have as much as one-third of your portfolio tied up in a single stock, no matter how "blue chip" that stock might seem, is a much higher risk strategy than I would care to choose. (On the other hand, my problem is that I have far too many stocks, with none above 5% and most well below that. I know that I am too thinly spread, but I constantly rake over the portfolio to check whether I have a valid reason for holding each individual one, but with such a spread it is hard to outdo the indexes of course.)

Re FGE: Yes, I bought some at the end of November, at 195. Just flicking through their MD's Presentation this evening, again, I can see why you would be attracted to it: beautifully steady rises in the various graphs, very low debt:equity ratio, 135% 2nd half profit forecast, wide spread of blue-chip clients, etc. Go for it!

Hi Colin,

Yeh - roller coaster returns might be fun but that plays on the exact emotions one should be attempting to eradicate from their decision making - fear and greed! easier said than done of course but not getting caught up in promise of quick riches is surely a good start!

Yes, diversification is not really featuring in my current strategy - for exactly the reasons you mention (diworsification?). My ANG exit strategy is this:

Watch like a hawk (business progress not the share price) and be ready to eject at any sign that the companies future prospects differ adversely from my current perception of them. I will constantly review and alter my strategy accordingly - As long as the company is growing earnings >15% annually I am happy to hold indefinitely. Should future growth prospects become cloudy I will sell the lot immediately - i've done it before with other assets - I am definitely not one of those "ill just wait for the price to come back up before I sell" types!

I did get on board FGE today - Just enough to wet the appetite @ 2.13. I am pretty bullish on the resource industry and I want to leverage to this without exposure to high risk mining ventures. I like the mining services/construction sector for this reason.

Lets see how we go - Less than a month to go until next update from ANG. In the meantime I will take h2s04's advice and put my head in the FGE books for awhile - having just taken your advice Colin and got on board :)
Cheers

COLIN
15-01-2010, 07:53 PM
I did get on board FGE today - Just enough to wet the appetite @ 2.13. I am pretty bullish on the resource industry and I want to leverage to this without exposure to high risk mining ventures. I like the mining services/construction sector for this reason.

Lets see how we go - Less than a month to go until next update from ANG. In the meantime I will take h2s04's advice and put my head in the FGE books for awhile - having just taken your advice Colin and got on board :)
Cheers

Sauce: I'm feeling a bit nervous now! I can't understand why FGE should have had such a negative performance, today, even though the ASX was down for most of the day - i.e. until the last few minutes when it shot up to end square. (I haven't yet established the reason for that sudden spurt.)

However, what is one trading day in the life of a thriving business, eh!

Sauce
15-01-2010, 08:26 PM
I wouldn't worry about it at this stage Colin. Most likely just general market noise. For a start its had a huge run. Profit takers, traders and technical analysts will cause and compound swings in the share price. The smartest and quickest of that bunch will profit from those swings and the rest will not.

COLIN
15-01-2010, 10:08 PM
the ASX was down for most of the day - i.e. until the last few minutes when it shot up to end square. (I haven't yet established the reason for that sudden spurt.)



Ah, I see that the CBA came out with a profit upgrade, causing all the big four banks to shoot north at the close.

modandm
02-02-2010, 05:35 PM
ANG has suffered a fall on low volume in the recent sell off. Dropping from 3.30 to 2.60ish.

Has recovered to around 2.70 today and should continue to recover further with the market.

This presents an ideal buying opportunity for a company trading now on a very low PE with a good trend behind it and a strong (20%pa) EPS overall growth prospects.

Expecting $3 will return shortly.

When is next announcement? cheers

Sauce
02-02-2010, 06:11 PM
ANG has suffered a fall on low volume in the recent sell off. Dropping from 3.30 to 2.60ish.

Has recovered to around 2.70 today and should continue to recover further with the market.

This presents an ideal buying opportunity for a company trading now on a very low PE with a good trend behind it and a strong (20%pa) EPS overall growth prospects.

Expecting $3 will return shortly.

When is next announcement? cheers

Hi Modandm

Yes. I picked up a small amount of ANG today, and a larger amount of FGE which may turn out to be an even better deal. I just got confirmation that a property I had on the market has sold - perfect timing. Cash to play with and fire sale prices what more could one ask for. I won't pull the trigger on the lot just yet, nice and slow - could be more weakness yet. I doubt it will last through interim reporting season though.

Interim results expected approximately 15th of Feb for ANG. Late Jan for FGE.

Regards,

Sauce

modandm
03-02-2010, 11:56 AM
i would have topped up also but its already over 10% of my portfolio...
it started at 7% so its been all good.

up 5% already today will keep going to $3 plus.

drillfix
03-02-2010, 12:05 PM
Hi Modandm

Yes. I picked up a small amount of ANG today, and a larger amount of FGE which may turn out to be an even better deal. I just got confirmation that a property I had on the market has sold - perfect timing. Cash to play with and fire sale prices what more could one ask for. I won't pull the trigger on the lot just yet, nice and slow - could be more weakness yet. I doubt it will last through interim reporting season though.

Interim results expected approximately 15th of Feb for ANG. Late Jan for FGE.

Regards,

Sauce

Well done Sauce.

Mate you must be successful, thats all I have got to say, with timing like that the Gods are watching you dear internet forum associate :p

Sauce
03-02-2010, 01:10 PM
i would have topped up also but its already over 10% of my portfolio...
it started at 7% so its been all good.

up 5% already today will keep going to $3 plus.

Classic - If I told you how much of my share portfolio and net worth was in ANG you would porbably think I was mad :) Its been a very profitable strategy.. so far.. on paper at least. However, something drastic would have to go wrong with the company for my initial capital to be at risk.

Looking forward to the 15th. Watching closely.

Sauce
03-02-2010, 01:20 PM
Well done Sauce.

Mate you must be successful, thats all I have got to say, with timing like that the Gods are watching you dear internet forum associate :p

Thanks, with the volatility at the moment you might not think that in a weeks time!

I think that in the next two years 10% either side of todays prices will be fairly inconsequential. I am long term holder of these shares. But I like to add to my holdings during weakness especially times of prolonged irrationallity such as last week and of course all of 2008. I'm sure Pheadrus and those of his ilk that are exceptionally skilled can make better timing decisions than us fundamentalists. But if you get the fundamentals right, time and compounding returns will take care of you - even if your short term entry is not perfect.

Cheers
Sauce

Sauce
03-02-2010, 01:28 PM
I am about -12% in my 12 month RCR vs ANG shootout with Skol... early days... :)

COLIN
03-02-2010, 05:33 PM
I am about -12% in my 12 month RCR vs ANG shootout with Skol... early days... :)

But at this rate of catch-up you will soon be in the lead - RCR absolutely static today, ANG ecstatic!

modandm
03-02-2010, 05:39 PM
no offence sauce but drillfix it didn't take a genius. I mean hell even I knew ANG at 270 was a incredable moment of market irrationality.

Good work Sauce and other holders. Up 8% today and still below $3. get in on this train if you aren't we are off to 3.50

btw - im interested in other co's of this nature and after running a ruler over them I like the look of Swick SWK

but the sp trend is poor and there is talk of a bad expansion to US plan. I know some are bullish based on utilisation in aussie - any ANG holders also in swick any views on SWK. cheers

Sauce what else you hold? I also fundy buyer

COLIN
03-02-2010, 05:53 PM
no offence sauce but drillfix it didn't take a genius. I mean hell even I knew ANG at 270 was a incredable moment of market irrationality.

Good work Sauce and other holders. Up 8% today and still below $3. get in on this train if you aren't we are off to 3.50

btw - im interested in other co's of this nature and after running a ruler over them I like the look of Swick SWK

but the sp trend is poor and there is talk of a bad expansion to US plan. I know some are bullish based on utilisation in aussie - any ANG holders also in swick any views on SWK. cheers

Sauce what else you hold? I also fundy buyer
Mod: Have you looked at Forge (FGE)? Sauce and I hold this. I held SWK for a while but ditched it because it seemed to be going nowhere.

Sauce
03-02-2010, 08:55 PM
Yes yes FGE. Forge Group. Same sector. Incredible fundamentals. Double digit margins, increasing year on year. High ROE, very little debt. Supurb track record of revenue and earnings growth.

The best part - they have recently announced a forecast of 100% + increase in earnings for interim result due this month and a record forward order book north of $250-300m revenue which will put them in good stead to have another record half.

They are working on some big big projects - their competitive advantage seems to be this "one stop shop" service where they project manage, engineer and build and things for the mining industry.

Current PE around 9 and forward PE (assuming second half is say, as good as the first half. The first half is practically assured and in the bag with their recent announcement) of like 5 or 6 max.

Margins in the region of 12% - clearly have good cost control and they seem to operate with comparatively low overheads.

It looks very cheap for a well managed and fast growing engineering company. I would say this company is likely to well outperform ANG in the short term as the market wakes up and realises its too cheap on current earnings guidance.

Im not yet convinced its a better company than ANG - but if the last few years and recent announcements are concerned it could well have the potential to be the next Worley Parsons if it keep growing at the same pace it has been. However in my opinion ANG is almost a sure bet to double its revenues in the next 2-3 years - whereas FGE is definitely more of a wild card, but potential to do even better than that.

My suggestion: Read all the annual reports since they listed, and all the announcements and presentations for the last 12 months. You will be suitably impressed.

I hold and I am still accumulating FGE.

Cheers
Sauce

drworm
05-02-2010, 11:09 PM
Sauce, Let's continue here.

Here's the NPAT breakdown in the order of 1st half, 2nd half, full year ($millions).

FY09 8.13 6.70 14.83
FY08 4.66 6.88 11.54
FY07 2.33 2.57 4.90


On the 03/08/2008, Austin completed their acquisition of Conymet Business for US$19.2m

And for the acquisition Austin mentioned that it will contribute.


Forecast EBITDA of USD 3.8m for Austin’s 09/10 financial year, based on a business model that assumes only dump truck body manufacture in the first year of operation


Noted that it might be a bit conservative, I'll give a little leeway and say that translates to AUD$4.5m (US$4m) EBT or AUD$3.15m after tax.

Let's also say they emulate their best half-year results ever (1st Half FY09) for both halves of FY10 - $8.13m x 2 = $16.26m. Plus the South American acquisition's contributions + $3.15m = $19.41m.

Looks pretty good over last year's $14.83m?

Unfortunately, between 22/06/2009 and now the shares on issue grew 47% (47,141,412 to 69,314,403) - most of which occurred between 22/06/2009 and 27/07/2009. The weighted shares increase from FY09 to FY10 is probably around 45%. In order for FY10 to have the same EPS as FY09, they'll need to make an NPAT of around $21.5m.

And as you can see, I'm using pretty bullish figures here. Personally I don't think for FY10 ANG can post a NPAT of $19.41m - it would probably be in the $16-17m range. Can it reach NPAT of $21.5m for FY11? Well, I can't see that as a certainty either.

So for me... FY10 EPS will be definitely under FY09's. EPS for FY11 might be on even par with FY09.

I still think it's a good company by the way, but perhaps not as cheap as some think it is.

What do you think Sauce?

Sauce
06-02-2010, 10:53 AM
Sauce, Let's continue here.

Here's the NPAT breakdown in the order of 1st half, 2nd half, full year ($millions).

FY09 8.13 6.70 14.83
FY08 4.66 6.88 11.54
FY07 2.33 2.57 4.90


On the 03/08/2008, Austin completed their acquisition of Conymet Business for US$19.2m

And for the acquisition Austin mentioned that it will contribute.


Noted that it might be a bit conservative, I'll give a little leeway and say that translates to AUD$4.5m (US$4m) EBT or AUD$3.15m after tax.

Let's also say they emulate their best half-year results ever (1st Half FY09) for both halves of FY10 - $8.13m x 2 = $16.26m. Plus the South American acquisition's contributions + $3.15m = $19.41m.

Looks pretty good over last year's $14.83m?

Unfortunately, between 22/06/2009 and now the shares on issue grew 47% (47,141,412 to 69,314,403) - most of which occurred between 22/06/2009 and 27/07/2009. The weighted shares increase from FY09 to FY10 is probably around 45%. In order for FY10 to have the same EPS as FY09, they'll need to make an NPAT of around $21.5m.

And as you can see, I'm using pretty bullish figures here. Personally I don't think for FY10 ANG can post a NPAT of $19.41m - it would probably be in the $16-17m range. Can it reach NPAT of $21.5m for FY11? Well, I can't see that as a certainty either.

So for me... FY10 EPS will be definitely under FY09's. EPS for FY11 might be on even par with FY09.

I still think it's a good company by the way, but perhaps not as cheap as some think it is.

What do you think Sauce?

Thanks for your thoughts Drworm

Good post, I mostly agree with your numbers, and I like the way you presented them in a 'conservative for your argument' fashion - in fact we already know their interim numbers about to be released probably won't be as good as yours.

However I think you are grossly underestimating the potential of the expansion they are undertaking. Sure, I concede that the full benefits of the South American operation may not be felt in this financial year. However, management have an impeccable record of extracting huge EPS gains from past acquisitions - and quickly - growing NPAT from less than 2m to over 14m in 3 years, largely through their acquisitons.

The company has now stated several times how excited they are about the potential of their South American operations which they believe will become as large or larger than their Australian operations. With many companies you would take this sort of rhetoric with a grain of salt, but when it comes from Austin you have to take some notice. They never blow their own trumpet, they don't make promises or give much in the way of forecasts. They just get on with it and consistently deliver without fuss.

I also suspect all their operations will out perform in the second half - which the company has hinted at several times - For instance the company have announced that they expected to have their full budgeted workload for Conymet locked in by Dec last year (literally just a few months after they purchased it).

As for 2011 numbers - well its clearly impossible to forecast numbers out that far for a business model like Austins. I imagine even the directors could not give you an accurate prediction of earnings in FY11. What they do have is a proven replicable business model, a large expansion program into a huge proven market, and a track record of impeccable success from same. Barring GFC type disruptions I am much more bullish than you on FY2011.

As I have previously stated I think the company was trading at about the right level around $3 From memory I also mentioned at $3.40 that they would need to provide evidence that South America was more successful than forecast to sustain the price - for similar reasons to your post.

However, >$2.70 is surely good buying for a company like ANG. I know this saying is worn out but I would rather pay a fair price for a great company than a great price for a fair company - that pretty much sums up ANG around $3 IMHO.

I love 100% pa returns as much as anyone - and ANG is unlikely to provide those in the next 12 months - but always chasing those returns will end in tears. ANG will compound returns for shareholders at higher than average rate in the medium term with limited downside risk.

Drworm do you have good reasons why South American expansion may not provide similar revenue increases as previous acquisitions?

A past comment or two I have made about doubling their revenues inside two years might have been rather enthusiastic and its good to have some sound contrary argument to keep things in perspective.
Cheers
Sauce

drworm
07-02-2010, 02:33 PM
We'll have to see Sauce.

I'm normally pretty conservative with my views so I'll be happy if ANG can exceed them. But on the other hand I do think I'm being reasonable - basically I'm predicting FY11 NPAT will grow 30% over the previous year. I wouldn't do so if I didn't think it was a good company.

As you mentioned with RE:South American Expansion - I too need a bit more details about their progress in that area in order to fully account for it.

Having held during a couple of periods over the past few years, it's a permanent on my watchlist. At the moment I'm content in just having a watch and wait.

Best of luck with your holdings Sauce

Sauce
08-02-2010, 12:51 PM
We'll have to see Sauce.

I'm normally pretty conservative with my views so I'll be happy if ANG can exceed them. But on the other hand I do think I'm being reasonable - basically I'm predicting FY11 NPAT will grow 30% over the previous year. I wouldn't do so if I didn't think it was a good company.

As you mentioned with RE:South American Expansion - I too need a bit more details about their progress in that area in order to fully account for it.

Having held during a couple of periods over the past few years, it's a permanent on my watchlist. At the moment I'm content in just having a watch and wait.

Best of luck with your holdings Sauce

Thats cool Drworm. We will certainly see. Different strategies I guess - you sound a lot more active than me - I would never trade in and out of a stock like ANG, even the longer term trends, I prefer to hold tight.

I think ANGs medium term prospects are just too juicy to risk not being on the boat.

Cheers Sauce.

P.s. I see BKN have been all over ANG like a rash...... again.....

COLIN
08-02-2010, 01:00 PM
I see BKN have been all over ANG like a rash...... again.....

Yes, noted that, and the subsequent fillip to the sp. I don't know much about BKN - what is the likelihood of a T/O offer? Or have you commented on that before, Sauce, and I have missed/forgotten?

Sauce
08-02-2010, 01:32 PM
Yes, noted that, and the subsequent fillip to the sp. I don't know much about BKN - what is the likelihood of a T/O offer? Or have you commented on that before, Sauce, and I have missed/forgotten?

I don't know.. BKN are certainly aquirers of engineering and capital goods businesses. They must have some reason for being on the register - they're hardly a passive investment vehicle.

Either way its a huge vote of confidence as BKN are leading industry players - they understand more about businesses like ANG than we could ever hope to.