RCR - RCR Tomlinson

[Skol]

With the market at elevated levels I've been erring on the side of caution recently and looking at infrastructure stocks, while not as exciting as some of the resources, can be just as rewarding. Previous 2 picks in this area were MND which I've sold and BOL which I still hold.
Take a look at RCR. Price has been declining for some time due to a long term contract which hasn't gone well but the company has lots of new work and is expanding around Oz.

P/E 11, sector P/E 15
P/B 2.25
P/S .65

Technically, this company looks very good indeed.
Not much debt and pays a dividend.

[Mothman]

Thanks for the heads up Skol.

As I like the industry (have held/do hold ESS,ANG,DOW,CHL)I have had a bit of a look in latest HY report, and recent anns.

Like the increasing Cashflow, low debt levels and recent very positive aquisition (Eagle Engineering)

What was the loss-making LT contract you are referring to?

Keen to get on board this $200M \"smallish\" company!

[wns]

I've been holding them for a few months, during which time the SP hasn't really gone anywhere - +/- 5% or so.

I actually started a thread on them about the time I bought in.

The company is tipping they'll have a good second half.

[kura]

Up 10 cents today so far, what are you guys doing to the share price ?

[Skol]

wns,
Sorry, didn't see your thread on RCR until this morning while looking for another company thread. Doubt you will be disappointed with your aquisition of these shares.

[wns]

quote:Originally posted by Skol

wns,
Sorry, didn't see your thread on RCR until this morning while looking for another company thread. Doubt you will be disappointed with your aquisition of these shares.


No worries Skol. From memory I was the only one posting on the thread I started so you've already done a lot better than I did in that regard. :)

Announcement just through that PPT are now a substantial holder.

HHL was becoming a substantial holder about when I was buying a few months back.

[Skol]

Mothman,
According to Mining News there was a loss on a long standing fabrication contract which exceeded provisions by $1.4m.

PS For what it's worth I've just doubled up on this one, looking very promising indeed, volume increasing by the day.

[Mothman]

Thanks for the update Skol.

I got on board at average price $1.88 after I looked at your first post and a bit of research.

Stoked about the current action :)

[kura]

I'm out today, (just waiting for the last few to trade at $2.05) not that I don't like their long term prospects, I just thought (a month ago) that $1.80 was too low, and that they would come back fairly quickly

[Skol]

Up another 10c today. What ARE you guys doing to the share price?

[wns]

quote:Originally posted by Skol

Up another 10c today. What ARE you guys doing to the share price?


This thread gets started and the share price has its two best days (in a row) that I've noticed since I bought in a few months back. :)

Keep posting, keep posting. :D

[Mothman]

Its all good[8D]

RCR could be a nice little bolt on aquisition for someone like Leightons or it could be too small for them??;)

[Skol]

Cashed out of RCR at 2.16 on Friday. Think a correction could be due on this one since it's spiked up so fast, as has the whole market. Now 40% cash.

[Lizard]

A leak at the printers with Smart Investor? I recall a couple of occasions where shares ticked up slightly in the day or two prior to an SI recommendation hitting the stands.

[Huang Chung]

I believe AFR SmartInvestor subscribers often receive their copy a day or two before it hits the stands.

[Huang Chung]

In the seven or so months since anyone has posted on RCR, the share price went all the way up to around $2.90, and back down to close at $2.30 on Friday.

Management is expecting significant growth in 2008. Huntley's has them earning a touch over 24cps, and I understand ABNAmro Morgan's is estimating around 25cps (unconfirmed), so based on such estimates, we are looking at a forward p/e of less than 10 at the current share price.

Historic Ave Annual Shareholder Returns are:

1 year 22.3%
3 years 55.6%
5 years 58.4%
10 years 21.3%

Seems pretty cheaply priced to me.....lets hope they can steer clear of trouble, unlike industry counterparts like Boom, Bradken etc.

Bought a parcel last week.

[thereslifeafter87]

These guys have underperformed for the last couple of years in boom conditions. They announced disappointing results for FY 07 but mixed it in with a highly EPS accretive acquisition.

The recent annoucement stated that the acquisition will be delayed, and that their first half earnings will not be strong.

If you're looking to play this macro-economic theme, you're better off in FGE or ZGL in my books.

[Huang Chung]

In the interest of disclosure, I mulled over what '87 said, and sold my RCR holdings for a small loss. Redeployed funds back into PDZ and VML, both of which, like just about everything else, took a hit today.

With the sale of my last holdings in EQX and HTI, I'm now just riding PDZ and VML.

[mccollr]

A large brokerage in Chch recommending this one. I bought in at 1.95

[mccollr]

Not at all. Just thought someone might have been interested. Thought that was what this forum was all about. Guess I got that wrong....:confused:

[kura]

Well I bought back into RCR today, no particular reason, (other than being a lot cheaper than a month or so ago)
The result released yesterday wasn't overly impressive.

[leonchai]

Director just bought $500,000's worth...seems like a huge vote of confidence to me!

[kura]

Director just bought $500,000's worth...seems like a huge vote of confidence to me!

Actually it was 500,000 shares (approx $600,000)

When it comes to directors buying, I ignore many of the smaller purchases, as I figure anything under $10,000 will be "pocket money" for most of those guys. However the size of this purchase does make you sit up and take notice.

[kura]

Looks like your not the only one that took notice, was a healthy rise today.

[COLIN]

I also have convinced myself that there's a bit of mispricing here, and have taken a bit of a stake.

[soulman]

... any idea on why it's being punished so?

I got one reason. Other than resources stocks, every frickin stocks are being punished.

[Mothman]

I'm back in at $1.09. Sold my last lot at $2.40 so it was a good trade.

I still like the company and its prospects and the fact a director was recently buying in.

Hunter Hall will have to watch out though, I think those guys are up to about 16% so can only really buy 3.9% more.

I has been punished unfairly I think - Only time will tell...:P

[COLIN]

I'm back in at $1.09. Sold my last lot at $2.40 so it was a good trade.

I still like the company and its prospects and the fact a director was recently buying in.

Hunter Hall will have to watch out though, I think those guys are up to about 16% so can only really buy 3.9% more.

I has been punished unfairly I think - Only time will tell...:P

I also bought a few recently. Can't see any valid reason for them to have taken such a hammering. As we have often been reminded, investments in the firms who service the miners are often a better bet than the miners themselves. RCR also has ongoing work in the general infrastructure area, plenty of orders up ahead, and principals who seem to be happy to take the opportunity to put their own money on the line.
Seems to have slipped below the radar for many.
Bought some BOL as well, and am a little bit up already.

[soulman]

I also bought a few recently. Can't see any valid reason for them to have taken such a hammering. As we have often been reminded, investments in the firms who service the miners are often a better bet than the miners themselves. RCR also has ongoing work in the general infrastructure area, plenty of orders up ahead, and principals who seem to be happy to take the opportunity to put their own money on the line.
Seems to have slipped below the radar for many.
Bought some BOL as well, and am a little bit up already.

Looks like the fall in RCR today is offsetting your gain in BOL. All off course unless you sold RCR at $1.23 odd a few weeks ago.

Everything is long-term and unless RCR has another downgrade, they should be OK. Although, I think RCR is due for another slide tomorrow, albeit a smaller one than today.

[COLIN]

Looks like the fall in RCR today is offsetting your gain in BOL. All off course unless you sold RCR at $1.23 odd a few weeks ago.

Everything is long-term and unless RCR has another downgrade, they should be OK. Although, I think RCR is due for another slide tomorrow, albeit a smaller one than today.
I'm afraid you're right! I still hold both, but for relatively modest amounts. It usually takes the market a long time to regain confidence after earnings downgrades but I still believe RCR has sound fundamentals - and now is certainly not the time to bail out.
I suppose the TA experts will tell me they would have bailed some time ago, and would still be waiting for entry trigger points.

[winner69]

Mosteph ...... should have looked at that OBV line

There was a STEP down last September when the price was about 241 ..... and has been trending down since ....... the writing was on the wall back then .... and not many TA signals since

Promise i won't tell Phaedrus

Sorry mate ... couldn't resist it

[winner69]

Prob just as much as why did RCR shareprice top on Guy Fawkes Day (or close enough to it).... spooky eh

[Phaedrus]

This is just another example of the folly of buying downtrending stocks - no matter how good the fundamentals might be.

RCR was in a nice tidy uptrend and going well. The first warning was the large downward OBV "step" mentioned by W69. This was caused by a big player ("smart money") getting out and as such has bearish connotations. All other technical indicators remained strong, though, and the price continued to be pushed higher as the little guys ("mug-punters") continued buying into RCR.

A few short weeks later, the picture abruptly changed. Technical indicators such as the 6 featured here all fired SELL signals. The first to be triggered was a break of the confirmed trendline, followed in very short order by a break of the Trailing Stop, then all the oscillators fired Sell signals. Uptrends can't end any more cleanly and clearly than that.
The ensuing downtrend has been steady and remorseless, with no false rallies to tempt premature re-entry. The same 6 indicators that monitored the uptrend are now monitoring the downtrend and as you can see, none are anywhere near triggering buy signals.

This downtrend has continued in spite of management predictions, good fundamentals, broker recommendations, enthusiastic support and a healthy balance sheet. In such a perfidious world, what can a poor girl rely on? The chart.

http://h1.ripway.com/Phaedrus/RCR51.gif

MoSteph has noticed an apparent contradiction between the daily and weekly OBV plots and asks "when you have the chart at weekly it's a step up, so what's that then tell you?"
It tells us (if we didn't already know) that OBV does not work well as a weekly indicator. This matter has been raised before and is fully discussed here. (http://www.sharetrader.co.nz/showthread.php?p=158579)

[Mick100]

Hi Phaedrus

Could you do one of these charts, with indictors, for EHL please

Bought in at $1.15 and wondering wether to add to position

[kura]

I'v never been much of a believer in tax loss selling, but now I'm starting to be convinced that it does happen.

Disc: purchased both RCR & GRD on Friday (both mining "service" companies, and both have had price slumps in year) but I think I will just say "thank you" and take some money off the table.

[kura]

Mosteph in a less nervous market, the share price would be at least $1.50 by now !

However I'm comfortable to hold a few for the medium term, the PE ratio is fairly undemanding, and I see limited downside.

[winner69]

Today RCR released its results and, not surprisingly, the long-term downtrend was broken. Below is the chart. I entered RCR way too early but continued to hold thinking the fundamentals were going to end up good enough to justify a re-rate (yes, even in this market). The main things that interested me, aside from the accounting ratios, were the inelastic income stream the Maintenance division enjoys, strong revenue growth, and that the current earnings issues flowed mainly from one-off events.

I’ve just started reviewing the accounts but in the meantime here’s a quick calc going off the current management forecast at a P/E of 7.5. Accordingly, revenue’s been increased by 15% and margins 1% (which I think is fair) resulting in a price of $1.61.

http://img902.mytextgraphics.com/photolava/2008/08/25/rcrforecast-4bn1192a5.jpeg

Mr Noordhoek said:

“RCR is expecting organic revenue growth of 15% in the 2009 financial year and an improvement in margin levels that will result in a commensurately stronger net profit after tax”

“This order book which now includes Positron, is currently standing at $170 million compared to $50 million at the corresponding period last year… This level of
enquiry represents more than two years of project work for the Company.”

“The Positron situation has improved significantly over the past few months following an organisational restructure and employee numbers returning to similar levels as at the time of purchase now that the Prominent Hill project is underway.”

http://img801.mytextgraphics.com/photolava/2008/08/25/rcrasdf-4bn0vwxc1.jpeg

So at 36 cents RCR is on a PE less than 2?

Hardly say anything to the market do they Mosteph so you have to believe that that 15% growth with improved margins is still on the cards .... share price saying something else though

Amazing stuff eh ..... maybe PPT were intelligent afterall back in August

[contrarianinvestor]

So at 36 cents RCR is on a PE less than 2?
.. share price saying something else though
Amazing stuff eh .....
We call this market over-reaction. Earnings may drop although the current low valuation seems to be excessive. On top of that we have all the price-trend followers who don't care about valuation - they only sell in downtrends and buy in uptrends. This behaviour is pushing prices to the extreme of undervaluation and overvaluation. We may look back on this price in 5 year's time and wonder what the market were smoking.

[winner69]

We call this market over-reaction. Earnings may drop although the current low valuation seems to be excessive. On top of that we have all the price-trend followers who don't care about valuation - they only sell in downtrends and buy in uptrends. This behaviour is pushing prices to the extreme of undervaluation and overvaluation. We may look back on this price in 5 year's time and wonder what the market were smoking.

This what bull and bear secular markets are all about. It is not price per se that defines a bear or bull market but rather changes in valuation.

A bear market will end when valuations (on the average) reach the bottom ... market PE on the ASX probably still has a way to fall from where it is today ... because earnings are under extreme pressure. That doesn't always mean price will fall much further ... rather it'll stay about the same for some time

Thats the average but the average is jsut that eh. There will be some extreme cases both sides of the average and RCR is possibly falling into that group.

Yes, one day we will see increasing earnings multiples (and hopefully increasing earnings) and the share market will once again become a great place to be invested in.

[COLIN]

Something must be "up" here - the share price certainly is - climbed 60% in the last month.

I previously lost a lot on these, by holding too long into the downturn. However I bought back in, in June last, at 60c - now 95c and still being propelled up.

Love those "Shovel Suppliers" (some).

[Skol]

I 've had these for a while and not so long ago bought some more at .76.
I think it might be catch-up, investors identifying oversold shares. I also hold BOL which is doing the same thing.

RCR have lots of work on for the next year or so.

[Skol]

RCR up again, 5% this morning, checking on the chart unusually high volume for the last few days.

Make that 10%.

Now up 15% on near record volume.

[COLIN]

RCR up again, 5% this morning, checking on the chart unusually high volume for the last few days.

Make that 10%.

Make that 15% now.
Over 70% in a month - not too sure that I can take the pace! Must be a speeding ticket coming up.

[Skol]

Make that 15% now.
Over 70% in a month - not too sure that I can take the pace! Must be a speeding ticket coming up.

Up 20% today now, but can it last? Maybe record volume today.

RCR closed on its high yesterday so technically, looking good for more gains today.
Nothing in the news.

[COLIN]

Up 20% today now, but can it last? Maybe record volume today.

RCR closed on its high yesterday so technically, looking good for more gains today.
Nothing in the news.
100% gain for me so far, but I'm starting to get nervous, but P/E still looks relatively modest, also P/NTA.
I wonder how Phaedrus would view the current position.

[macduffy]

I'm no Phaedrus but I certainly wouldn't be selling with RCR in a strong uptrend on good volume.

I might think about a trailing stop-loss to protect my profits though.

[contrarianinvestor]

Strange how people get optimistic when prices go higher. The exceptional investment opportunity is now gone. The time to be optimitic was when the shares we obviously undervalued as in my February post.

[Phaedrus]

Uptrends this steep are unsustainable and RCR is due for a correction. Too many people have made a lot of money and will be looking to book some of their profits. There is strong evidence that this process has already begun. Yesterday, RCR rose 16 cents during the day, but profit-taking pressure drove it down and had halved that gain by the Close. This is shown by the long upper shadow on yesterday's candlestick. You might like to look back at what happened last time RCR had run up very fast and such a candlestick was formed (see inset chart). Active traders would have exited yesterday afternoon when it became obvious what was happening. (Who do you think was doing all that selling?) We know who was doing the buying. In polite circles they are called retail investors.

At times like this this you really have to sort yourself out and and decide what you are, how active a trader you want to be and what trend you want to monitor and trade.

The chart shows 4 indicators suitable for use by conservative, less active participants. You can easily see that none of these are anywhere near being triggered and even a fairly substantial correction would not see you flicked out of this trade.

Still undecided as to what to do? At times like this, the time-honoured solution is to split your investment. Treat half as short term punt and retain the other half as a longer-term investment, selling only when the trend reverses.

http://h1.ripway.com/78963/RCR99.gif

The chart shows today's candlestick as at 1pm. Right now, RCR is looking very strong. It will be interesting to see if there is any sell-off later in the day.

[Skol]

Nice profits there, took them at $1.26, but will buy back though when it's more realistic.

[Phaedrus]

After RCR peaked at $1.27 early in the day, there was the same determined sell-off with the day ending exactly where it started. This forms a long-legged Doji candlestick and is an indication of a market separating from its trend. When preceded by a steep uptrend (an overbought environment) a Doji is Bearish.

Skol's exit is technically sound.

http://h1.ripway.com/78963/RCR99b.gif

[STRAT]

Retail investors are a thing of beauty. They will carry the uptrend on longer and for further than anyone ever envisaged. Thus starts a new bull market :-)lol KW. You mean, like, all of us? :D

[COLIN]

Phaedrus: Your time, effort and suggestions greatly appreciated. Subsequently sold half my holding at 125 - if the same daily pattern emerges again tomorrow I will probably be tempted to sell the rest and wait on the sidelines until the fever passes.
Many thanks, again.

[Sauce]

After reading this thread in it's entirety I wonder if the posters here have run the ruler over Austin Engineering? Based on the numbers, and a very basic understanding of both businesses, I cannot find a single reason someone would want to own RCR over ANG (that's not to say there isn't one! I would love to hear others peoples views).

Both businesses operate in the same sector and have comparable market caps (but that's about all that's comparable!).

For instance:

MARKET CAP
RCR = $156m
ANG = $159m

EPS 2008/2009
RCR = 14.2/11.1 = -22.4%
ANG = 24.73/31.39 = +27%

OPERATING MARGIN
RCR = AVERAGE (8 years) 7.5% CURRENT = 5.9%
ANG = AVERAGE (6 years) 13.3% CURRENT = 13.61%

RETURN ON EQUITY
RCR = AVERAGE (8 years) 11.58% CURRENT = 7.5%
ANG = AVERAGE (6 years) 28.5% CURRENT = 28.45%

DIVIDENDS (CURRENT)
RCR = PAYOUT RATIO 25% = YIELD 2.08%
ANG = PAYOUT RATIO 25% = YIELD 3.45%

GEARING
RCR = 22% INTEREST COVER = 3.26x
ANG = 3.5% INTEREST COVER = 24x

PE RATIO (CURRENT)
RCR = 10.81
ANG = 7.39

I realise the historical numbers don't tell the whole story, so please enlighten me if I am missing an important point. To me it seems like ANG outright destroys RCR comparing fundamentals.

ANG have over double the margins of RCR; quadruple the ROE (they have made much better use of their gearing compounded by higher margins), almost double the yield, lower debt/better capital structure, and best of all they are trading at a 31% discount to RCR.

Not to mention RCR have had profit downgrades, delayed projects, appointed a new CEO etc. ANG have gone from strength to strength with management under promising and over delivering, and they have still grown profits significantly during current crisis.

Sure RCR was a screaming BARGAIN earlier this year..... but likewise ANG was, and although now less of one, still is. My opinion is that RCR is now at fair value. I believe ANG is still trading at a discount (approx 30%). A re-rating to PE of +10x and increased earnings due to South American expansion should see the share price perform exceptionally well over the next 12 months, and way outperform RCR from here.

Any thoughts, criticisms, would be much appreciated.

Disc. Hold ANG Do not hold RCR

[h2so4]

After reading this thread in it's entirety I wonder if the posters here have run the ruler over Austin Engineering? Based on the numbers, and a very basic understanding of both businesses, I cannot find a single reason someone would want to own RCR over ANG (that's not to say there isn't one! I would love to hear others peoples views).

Both businesses operate in the same sector and have comparable market caps (but that's about all that's comparable!).

For instance:

MARKET CAP
RCR = $156m
ANG = $159m

EPS 2008/2009
RCR = 14.2/11.1 = -22.4%
ANG = 24.73/31.39 = +27%

OPERATING MARGIN
RCR = AVERAGE (8 years) 7.5% CURRENT = 5.9%
ANG = AVERAGE (6 years) 13.3% CURRENT = 13.61%

RETURN ON EQUITY
RCR = AVERAGE (8 years) 11.58% CURRENT = 7.5%
ANG = AVERAGE (6 years) 28.5% CURRENT = 28.45%

DIVIDENDS (CURRENT)
RCR = PAYOUT RATIO 25% = YIELD 2.08%
ANG = PAYOUT RATIO 25% = YIELD 3.45%

GEARING
RCR = 22% INTEREST COVER = 3.26x
ANG = 3.5% INTEREST COVER = 24x

PE RATIO (CURRENT)
RCR = 10.81
ANG = 7.39

I realise the historical numbers don't tell the whole story, so please enlighten me if I am missing an important point. To me it seems like ANG outright destroys RCR comparing fundamentals.

ANG have over double the margins of RCR; quadruple the ROE (they have made much better use of their gearing compounded by higher margins), almost double the yield, lower debt/better capital structure, and best of all they are trading at a 31% discount to RCR.

Not to mention RCR have had profit downgrades, delayed projects, appointed a new CEO etc. ANG have gone from strength to strength with management under promising and over delivering, and they have still grown profits significantly during current crisis.

Sure RCR was a screaming BARGAIN earlier this year..... but likewise ANG was, and although now less of one, still is. My opinion is that RCR is now at fair value. I believe ANG is still trading at a discount (approx 30%). A re-rating to PE of +10x and increased earnings due to South American expansion should see the share price perform exceptionally well over the next 12 months, and way outperform RCR from here.

Any thoughts, criticisms, would be much appreciated.

Disc. Hold ANG Do not hold RCR

RCR has a lower margin but a larger turnover and $185m in equity as compared to ANG's lower turnover and $51m in equity.

The other thing is RCR spends only twice as much as ANG on Cap Ex to achieve a turnover more than 3x ANG's turnover.

And RCR has been around longer.

I think your right ANG is trading at a 30% discount but RCR in my opinion is still very good value. I'm just waiting for the buy signal from Phaedrus?

That's my thoughts.

[COLIN]

After reading this thread in it's entirety I wonder if the posters here have run the ruler over Austin Engineering? Based on the numbers, and a very basic understanding of both businesses, I cannot find a single reason someone would want to own RCR over ANG (that's not to say there isn't one! I would love to hear others peoples views).

Both businesses operate in the same sector and have comparable market caps (but that's about all that's comparable!).

For instance:

MARKET CAP
RCR = $156m
ANG = $159m

EPS 2008/2009
RCR = 14.2/11.1 = -22.4%
ANG = 24.73/31.39 = +27%

OPERATING MARGIN
RCR = AVERAGE (8 years) 7.5% CURRENT = 5.9%
ANG = AVERAGE (6 years) 13.3% CURRENT = 13.61%

RETURN ON EQUITY
RCR = AVERAGE (8 years) 11.58% CURRENT = 7.5%
ANG = AVERAGE (6 years) 28.5% CURRENT = 28.45%

DIVIDENDS (CURRENT)
RCR = PAYOUT RATIO 25% = YIELD 2.08%
ANG = PAYOUT RATIO 25% = YIELD 3.45%

GEARING
RCR = 22% INTEREST COVER = 3.26x
ANG = 3.5% INTEREST COVER = 24x

PE RATIO (CURRENT)
RCR = 10.81
ANG = 7.39

I realise the historical numbers don't tell the whole story, so please enlighten me if I am missing an important point. To me it seems like ANG outright destroys RCR comparing fundamentals.

ANG have over double the margins of RCR; quadruple the ROE (they have made much better use of their gearing compounded by higher margins), almost double the yield, lower debt/better capital structure, and best of all they are trading at a 31% discount to RCR.

Not to mention RCR have had profit downgrades, delayed projects, appointed a new CEO etc. ANG have gone from strength to strength with management under promising and over delivering, and they have still grown profits significantly during current crisis.

Sure RCR was a screaming BARGAIN earlier this year..... but likewise ANG was, and although now less of one, still is. My opinion is that RCR is now at fair value. I believe ANG is still trading at a discount (approx 30%). A re-rating to PE of +10x and increased earnings due to South American expansion should see the share price perform exceptionally well over the next 12 months, and way outperform RCR from here.

Any thoughts, criticisms, would be much appreciated.

Disc. Hold ANG Do not hold RCR

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.

[Sauce]

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

[h2so4]

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.

Steam or no steam RCR has a long way to go. Assuming tides and winds are favourable we can always set our sails or break out the oars.:)

[Sauce]

Steam or no steam RCR has a long way to go. Assuming tides and winds are favourable we can always set our sails or break out the oars.:)

So true :)

[Skol]

I sold some RCR a while back but I'm going to pick up some more now the price is down.
This company seems quite cheap on a EV/EBITDA ratio and hasn't participated in the recent rally.

Low P/B & P/S.

I'm not an accountant though so more informed comment than mine would be welcome.

ANG has twice the EV/EBITDA ratio of RCR and a debt/equity of 52% vs 32% for RCR.

That would make RCR a better deal if another party was interested in buying the company.

[Sauce]

I sold some RCR a while back but I'm going to pick up some more now the price is down.
This company seems quite cheap on a EV/EBITDA ratio and hasn't participated in the recent rally.

Low P/B & P/S.

I'm not an accountant though so more informed comment than mine would be welcome.

ANG has twice the EV/EBITDA ratio of RCR and a debt/equity of 52% vs 32% for RCR.

That would make RCR a better deal if another party was interested in buying the company.

Hi Skol

ANG has NET gearing of approx 18% after recent cap raising/share issue.

How exactly are you calculating the enterprise value of these companies?

Cheers
Sauce

[Skol]

Hi Skol

ANG has NET gearing of approx 18% after recent cap raising/share issue.

How exactly are you calculating the enterprise value of these companies?

Cheers
Sauce

In my paperwork here I've got a cutting from the WSJ. The formula I use is:

Market Cap + Debt - Cash divided by EBITDA.

ANG is about 10, RCR is about 5.

[COLIN]

I sold some RCR a while back but I'm going to pick up some more now the price is down.
This company seems quite cheap on a EV/EBITDA ratio and hasn't participated in the recent rally.

Low P/B & P/S.

I'm not an accountant though so more informed comment than mine would be welcome.

ANG has twice the EV/EBITDA ratio of RCR and a debt/equity of 52% vs 32% for RCR.

That would make RCR a better deal if another party was interested in buying the company.

Skol: You may well be proved right but, looking at the charts, I'm not convinced that now is yet the time to be getting back in. I would want to wait for greater confirmation of a sustainable upward trend. And I feel sure that Phaedrus would agree.

It would sure be wonderful to be able to double my money again, as I did in holding between June and September last, but that was a miracle and unlikely to be repeated!

[Skol]

Took a punt yesterday and bought a few at $1.03, see how it goes. Up 6.5c in the last 2 days, not much, but might be the beginning of a trend.

[Sauce]

In my paperwork here I've got a cutting from the WSJ. The formula I use is:

Market Cap + Debt - Cash divided by EBITDA.

ANG is about 10, RCR is about 5.

Hi SKol, thanks for this -

I am no accountant either but it looks like you have calculated this ev/ebit for ANG using the debt, cash and ebitda from the end of year results (30th June 2009) but taken the market Cap from today. The EV/EBITDA using market value at that time it would have been about 5 or so.

In the 7 months Since June the company has raised cash and issued shares, purchased an earnings accretive business, and if their commentary is correct, experienced improving business conditions accross existing operations. Plus the share price has doubled. It will be more complicated and require guess work to work out current ev/ebitda multiple until we have better snapshot of current operations from the company in Feb - but it looks as though it will be higher than 5 but much lower than 10!

WIth RCR I would be concerned about low ROE and margins - they are tight at 5-6pc and have been decreasing for last three years. Also the business plan - which seems they are trying to unlock more profit from existing revenues (increase margins) rather than a nice clear, proven and sustainable high margin growth path like ANG! ;) haha just playing

Make sure you check out FGE, very low ev/ebitda - almost no debt, hist PE 9 -10, double digit margins increasing year on year, and forward order book at nearly double last financial year. Company aiming for half billion revenues by 2013 - (168m for 2009).

I hope RCR pans out Skol - we can have a freindly ANG vs RCR shootout!

RCR 103.5 and ANG 328. :)

Cheers

Sauce

[Skol]

OK, you're on.
I have used current cap and '09 debt and cash.
I would have thought ASB would keep their site up to date on debt etc.
I have shares in MGR for example which shows 43% D/E ratio but apparently it's more like 18%.

RCR are advertising for a number of staff on their website so have some work under their belts.

[Sauce]

OK, you're on.
I have used current cap and '09 debt and cash.
I would have thought ASB would keep their site up to date on debt etc.
I have shares in MGR for example which shows 43% D/E ratio but apparently it's more like 18%.

RCR are advertising for a number of staff on their website so have some work under their belts.

Cool a bit of friendly competition will be good to keep us researching and learning! Yeh I think mostly ASB data only gets updated at each HY and FY? It pays to work out the data yourself from annual reports and announcements - I learn more hunting through everything to find and verify the numbers.

Good luck -

p.s. I don't think RCR is a bad company, its profitable and increasingly so and seems reasonable value at current prices - I just think they have cost pressures and have to find efficiency to deliver stronger returns, success of which is less assured and therefore current lower value warranted.

[Skol]

Hey Sauce, I think we're off. Up 3.5c today.

[Sauce]

Hey Sauce, I think we're off. Up 3.5c today.

Yes Yes, good start Skol!

P.s. We didnt mention a timeframe - I think a minimum of 1 year is really needed for a shootout of course we update progress with plenty of sledging at any point. :)

[Skol]

Yes Yes, good start Skol!

P.s. We didnt mention a timeframe - I think a minimum of 1 year is really needed for a shootout of course we update progress with plenty of sledging at any point. :)

OK, we'll make it a year, up to $1.10 now.

[Sauce]

OK, we'll make it a year, up to $1.10 now.

It looks like your timing was impeccable. Feb will be my month - bring on HY results, commentary and forecasts :) 15th of Feb for ANG - 22nd for RCR i think...

[malus]

Anyone holding? My largest Aussie holding... Have two separate Chess registrations so have applied for 2 x $15,000au allocation of shares in SPP offer ($15 million to be raised, directors can accept over subscriptions)... Instro offering fully subscribed. Dividend of 6cents paid on existing and newly issued shares.

[Snow Leopard]

Currently makes up a good proportion of my Oz Super Fund.

But I have no room/cash to take up any in the SPP :(.

Best Wishes
Paper Tiger

[malus]

:)
Currently makes up a good proportion of my Oz Super Fund.

But I have no room/cash to take up any in the SPP :(.

Best Wishes
Paper Tiger
Shame you have to pass on the SPP, I'm of course hoping that one or two other holders, like you Tiger, might not be in position to take up their entitlements:).

[Snow Leopard]

Another contract win announcement [click me (https://stocknessmonster.com/news-item?S=RCR&E=ASX&N=1044511)] today to accompany last weeks win [click me too (https://stocknessmonster.com/news-item?S=RCR&E=ASX&N=1043840)].

Helps keep the share price going up.

Hopefully there will be some profit in these contracts as well. :)

Best Wishes
Paper Tiger

[Snow Leopard]

Just noticed that I dodged a bullet with these. I converted my Oz pension fund to cash a few months ago and everything was sold.

But it seems after that they did a trading halt, a we stuffed it up announcement, a we need your money announcement and are now back in business at less than a third of my exit price.

Got to keep a close eye on this engineering companies :ohmy:

Current saga is getting the cash out of the fund and into the bank which appears to be even more difficult than I thought it would be, and I thought it would be difficult.

[winner69]

Raise $100m in September and then go into administration in November ....clever

[silu]

It's not as if they are construction anything important in Auckland..... Ohh. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12164937
Auckland City Rail Link engineering firm RCR Tomlinson goes into administration

[macduffy]

From ABC Business.

https://www.abc.net.au/news/2018-11-24/what-went-wrong-for-rcr-tomlinson/10550716?section=business

[percy]

From ABC Business.

https://www.abc.net.au/news/2018-11-24/what-went-wrong-for-rcr-tomlinson/10550716?section=business

Thanks for the link.
Incredible.

[winner69]

Thanks for the link.
Incredible.

Amazing eh

Reads a bit like NZ construction

The CFO left suddenly a couple of weeks ago

[percy]

Amazing eh

Reads a bit like NZ construction

The CFO left suddenly a couple of weeks ago

Thank my lucky stars I did not invest in them.
Looked a very good company to me, and I think I would have missed any sell signals.

[macduffy]

Thank my lucky stars I did not invest in them.
Looked a very good company to me, and I think I would have missed any sell signals.

Yes, I looked at them several times over the years. A leader in their sector and a very solid performer until ………..

[clearasmud]

Yes, I looked at them several times over the years. A leader in their sector and a very solid performer until ………..

The debt appeared low until you read the notes: they had a huge overdraft,
Did I get this wrong???

[wizAlvin]

URGENT
Shrewd Crude:3,1,FGF,initial3,0,1,20190111,status3,new,0 FGF value less than one cent found;
clearasmud:4,1,OXX,initial4,0,1,20190110,status4,n ew,0 OXX value less than one cent found;

WARNING : FGF and OXX will be declared invalid - set to -100% - i suggest another pick URGENTLY

Dej: NCO not found; CHANGED TO NC6

bohemian: RXS not found;

if nothing heard FGF ==> FGG; OXX ==> OYM; RXS ==> RYD perhaps