Capital Share Discussion Threads

[rivaldo] 14/6/2012 15:36

Nice to finally see a little buying here! And for that buying to make an immediate difference price-wise...

[lennonsalive] 07/6/2012 08:51

Mining generally hasnt faired well recently and this share doesnt seemed to have reached bottom yet. Not sure if this is because lack of interest in it?

[wjccghcc] 07/6/2012 08:39

High fixed cost base gives high operating leverage. Works well in boom times but will decimate results if metal prices fall and demand/pricing reduces for their services.

[ceostal] 07/6/2012 08:25

Any thoughts on why this is still dropping lower and lower? Thinking of getting out. All news seems so positive and it now looks so cheap. What am I missing??? Thanks is advance!

[chrisb1103] 22/5/2012 17:41

Ha, no not me today! but i'm not ruling it out :)

[rivaldo] 22/5/2012 15:12

Some volume here now with 155k shares traded.

Forecasts for this year appear to be unchanged at 10.3p EPS, but perhaps the analysts haven't sharpened their pencils yet since last week's IMS.

[rivaldo] 22/5/2012 10:33

That you adding chris? Good to see a 1.5p rise on the back of small buying today - hopefully our seller has finished.

[chrisb1103] 21/5/2012 18:03

Thanks for the links Rivaldo - appreciated. Pleased i'm not the only one who's spotted good value here. There's been a seller about for sure, hopefully be done soon and then a race back to 80p+ will be on the cards imo.

Disappointing reaction to what was a good statement i think. No sign of the strong growth slowing here, revenues up strongly (up 31% Y-o-Y), av. revenue per rig continues to grow strongly (up 26% Y-o-Y), they have added to the fleet (88 compared to 75 Q1 2011, steadily increasing Y-o-Y) and indicated utilisation rates will pick up next quarter. I added on the IMS and will likely do again (subject to wider markets behaving). Confident to meet full year forecasts - on a PE of 6 with EPS growth of 24%+ this year - and these look even cheaper for likely future growth prospects to me.

"A number of the Group's major clients are seeking to expand their activities over the course of the current financial year and pricing for key commodities remains well above the economic thresholds for sustained levels of exploration and mining activity." We may see some new contract wins too...

[rivaldo] 18/5/2012 10:47

Good comment in the Mail today:



"Miner Capital Drilling, the first drilling company to list on the Main Market, improved 2.25p to 68.25p. In a trading statement the company said it is on track to deliver on market forecasts. The first-quarter saw revenues rise by 36 per cent to $36m with the forecast $162m for the year. Merchant Securities says the stock is too cheap."

[rivaldo] 17/5/2012 19:14

Encouraging to see that CAPD is one of only 9 quoted companies to meet the investment guru Peter Lynch's investing criteria:



"While Lynch likes to see annual earnings growth of 15%+, he cautions against companies growing at faster than 30%. Not only is that level of growth extremely difficult to sustain over the long term, but also companies growing at breakneck speed have usually already attracted the attention of analysts.

Lynch offers a disarmingly simple valuation method:

"Find the long-term growth rate, add the dividend yield, and divide by the P/E [price-to-earnings] ratio. Less than 1 is poor, and 1.5 is okay, but what you're really looking for is a 2 or better. A company with a 15 % growth rate, a 3% dividend, and a P/E of 6 would have a fabulous 3."

If a stock met Lynch's earnings requirements and had net cash or modest debt, he would hold for the long term if the story didn't change: No selling out after a 50% or 100% rise for Mr Ten-bagger!"

There aren't that many companies around who can provide the services that CAPD does, and can do them well. I suspect CAPD may have quite a bit of pricing power. In particular, CAPD's focus on "large scale multi-rig development and production stage drilling projects by major mining companies reduces the Group's earnings volatility and provides more sustainable margins."

All on a P/E of 6.

[wjccghcc] 17/5/2012 13:44

I agree on the utilisation but in any downturn they will have very little pricing power. The likes of bhp will simply say this is the market price - take it or leave it.

[rivaldo] 17/5/2012 09:01

Yes, that's why I was encouraged to see the mention of expansion of activities by "a number of the Group's major clients".

This implies not only likely further news flow of more projects to come, but also decent demand which will lead to strong pricing and high utilisation.

I note that the second quarter has also "started well". Since we're already halfway through Q2 the next trading statement should also have a similarly positive mood.

[wjccghcc] 17/5/2012 08:51

It's a tricky one and depends on your commodity price outlook. Even though they're targeting long-term projects, their pricing will be determined by the market - in H1 2010 they had 60% utilisation and pricing 50% lower.

If commodity demand returns to 2010 levels, you're looking at EPS returning to 2p. Of course if it doesnt, then they're good value :-)

[rivaldo] 17/5/2012 08:19

Excellent update this morning.

On track for consensus 10.34p EPS this year, and maybe a decent amount more if things continue going as well as they are.

Particularly as they say "A number of the Group's major clients are seeking to expand their activities over the course of the current financial year".

I've bought some first thing.

[curious] 04/5/2012 07:49

Any ideas???
Yes, big seller was still selling!
Highly illiquid share. Big seller needed to take big discount from published price to unload.

[gleach23] 03/5/2012 21:03

well the day started well enough but ended with a curious late trade of 225K @65p!

any ideas anyone?

[chrisb1103] 01/5/2012 21:45

They said this in the results 19 March, no sign then of any demand slowing - solid earnings visibility for the current year in fact:

"As we head into 2012 we are again optimistic for the year ahead. We continue to see further expansion opportunities with our existing customers as well as new opportunities in the broader market. Growth will be driven further by the strong demand environment, continued higher rates of utilisation providing solid earnings visibility for the next 12 months. We retain a strong balance sheet and with the recently concluded debt package have substantial flexibility for funding future growth. Assuming the current demand environment remains supportive the Board expects another year of strong growth in 2012." They've got some big blue chip custmers too remember.

It's illiquid and there's obviously a keen seller, so further weakness might be a buying opportunity ahead of a likely update this month, they are due one - anyone know a date? anyone adding? I'm tempted i must say. Current year PE of 7.5 for "strong growth" i.e. circa 25-30% EPS uplift if forecasts are right.

[wjccghcc] 01/5/2012 17:00

They have a lot of fixed costs due to the rig investments so it's basically a leveraged play on commodity prices (specifically gold and copper). Both are 10-20% weaker than a year ago.

[boynic1] 01/5/2012 16:49

@ gleach23 I couldn't see anything on the news wires, and markets generally don't seem to be 'tanking' so I hope so too. Has come back from the near 11% drop thankfully, so hopefully will come closer to its support of around 82p very soon

I wonder whether MM's have a big order to fill ahead of the interim management statement due in the next couple of weeks?

If anyone else has any further thoughts would appreciate it. Looks like a good value company, with increasing profits and prospects which posted a very positive last set of results. What am I missing???

[gleach23] 01/5/2012 14:27

hope so boynic1...never did manage to sell mine!

[boynic1] 01/5/2012 14:19

Tree shake in progress?

[sttrader] 27/4/2012 12:41

I'm getting bored too! Results were good, forecasts seem good as well. Maybe the next statement will stimulate interest. Thought the EMS was 3000 shares. What is the point of having an EMS if you cant sell 3000?

[sttrader] 27/4/2012 12:41

I'm getting bored too! Results were good, forecasts seem good as well. Maybe the next statement will stimulate interest. Thought the EMS was 3000 shares. What is the point of having an EMS if you cant sell 3000?

[gleach23] 26/4/2012 13:25

seems to be sitting on support here but i'm getting very bored with these

just went to sell my small holding but the max I could sell was 1500!

not a great sign - can anyone give a compelling case for continuing to hold?