Coffey International

[brisand]

Coffey International is a very interesting share, it has various business's around the world and has shown that it can produce consistent great returns, 1 yr 52%, 3yr 78%, 5yr 48%, 10yr 29%.
The CEO has said that they are looking at other business's and that they hope for a 50% growth in earnings over the next 3 years. Capitalised at $241 million.

[buns]

Oh how things have changed in this business..

Coffey was hovering around $5 mark, paying big dividends when the above 2 comments were made. Now at 68c, dividends cut and trending lower in a hurry.

I’m on the look out for businesses (in growth industries) implementing a turn around. I’m seeing a lot of companies out there who coming out the other side of a GFC turn around. The (forecasted) hockey stick/growth years are coming up soon for companies who can pull this off.

COF came on my radar – Professional services consultancy, focusing on physical and social infrastructure. Has 8 different service lines, and delivers projects in four sectors: infrastructure; resources; government; and property.

The company obviously made some big mistakes (Wholesale acquisition strategy over about 5 years was poor, heaps of waste in cost, then smashed by the GFC), but over the last wee while have laid the ground work for a big turnaround. They are turning into a pretty lean business, selling assets, taking cost out as communicated to investors, with another $18m to come in FY12 (over half of current EBITDA).

Whilst doing this they have had some awful luck which has pushed things back a tad- Flooding and mining tax being the big gut punchers, and some contracts which fell through.

As it stands the Adjusted ($5m of restructure costs) FY11 EBITDA will be about $30-38m, Revenue around $700-750m. Market cap $90m (trending down)– Revenue to Market cap/EV here is substantial!

With all the one off costs, restructuring behind them, as well as some newly signed contracts and huge cost out plans in place. EBITDA for FY12 should rise substantially, and again in FY13 with incremental cost out.

FY12 EBITDA could near the $60m mark (around 3 times non adjusted FY11 EBITDA), Looking at this forecasted EBITDA, and considering where this MC/EV is heading, this is getting cheap. Forward EV/EBITDA heading below 3. Debt/EBITDA following this will half to manageable levels, with a CR around the corner. Current Interest cover is ok.

Any fundamental investors have any thoughts on when best to enter these companies? With a moderate tolerance for risk, when is the best time to enter? What to look out for when doing valuations? Or any direct thoughts on COF/this industry?

[drillfix]

Seems that this stocks price keeps getting technically slapped down by the 60ema and then riding the 13ema downwards.

On a different note, can whoever started this thread add the actual stock code to the heading Title? That would be also helpful to other forum searchers and readers.

[Jay]

On a different note, can whoever started this thread add the actual stock code to the heading Title? That would be also helpful to other forum searchers and readers.

Unlikely Drill - last post for briand was 2009

[drillfix]

Unlikely Drill - last post for briand was 2009

LOL Jay, sorry mate, my mistake.

No wonder much posts have been made since its done a huge tumble form up in the dollars to lower lows all the way.

If this stock had a short sell recommendation then I would understand as it is either completely unloved or completely mismanaged which means heads on the board need to roll, or something of that natue.

Cheers~!

[buns]

Trading halt has been lifted.

The announcement being a full strategic review of COF!

http://www.stocknessmonster.com/news...E=ASX&N=637094


I’ve merely ran my eyes over the announcement, but it seems very honest and even quite ruthless.

If you are a believer, this is a potential value opportunity – FY12 EBITDA guidance of $45m compared to a market cap of $65m!

I’m going to dig into this some more – will post my findings/thoughts.

[CAM]

I will be interested in what you find out.

[buns]

I will be interested in what you find out.

Well I probably will find out its good news!

The market has reacted positively, up 25% in the first hour- So that EBITDA to market cap has spread a tad, $45m EBITDA on a $82m MC.

I should have started my analysis during the trading halt, so I could have acted on a dime come announcement and possibly held some of today’s gains.

Make sure you understand your watch list hm..

More importantly - Good to see some Waikato members on ST!

[Huang Chung]

Another company in the same space (engineering and environmental consulting, international aid) is Cardno (CDD). In my experience (and I've held both in the past) Cardno seems to be a more consistant performer, and they recently forecast a record profit.

Worth a look, if you haven't done so already.

[Packersoldkidney]

Mate used to work for them a few years ago. He worked in environmental repatriation, rehabing old petrol station sites etc. Said they were awful bosses. They had a quota of the amount of time employees had to have in terms of contact with the client - it was something like 37% or something? My mate said it was very difficult to "meet the quota" - he was working 12 hour days but basically paid for less. The workers had to have it down to within 15 minutes over a month block - all of the other stuff they had to do at work, emails, paperwork etc had to be done in the other 63%. All of the workers were unhappy there. They had a high staff-turnover. My mate has since found a job in the same industry but with much better employers. I suspect they will find it difficult to get quality staff while the unemployment rate in Australia is under 5%.

I don't know what this says about Coffey if you are a shareholder - I suspect there is not a lot of fat in the organisation - sounds like they've wrung out the blood from the stone. Good sector to be in though given the investment in it. That is all.