Now 10% decrease in 3 days because IMO no date for trading update |
The issue is whether pension fund in surplus you need to ignore the figures in statutory accounts and get the true actuarial valuation only when that is in surplus can Company pay Dividend without matching amount with pension scheme. Could do with an update on whether this is likely anytime soon otherwise share buybacks may continue. |
If Costain reaches or exceeds its targets for Operating Margin the shares will continue to appreciate. IMO the only thing preventing the shares reaching a sensible EV/EBITDA multiple over the next 15 months (to 2025's earnings announcement) is the company's paltry dividend which itself reflects the very small (so I read) Pension Fund surplus. Buying £10 mil of its equity isn't compensating. Perhaps, buying 10% of its equity might. That, of course, requires the maintenance of the PF's surplus. |
I just don't trust these markets. Why buy today when in a few weeks may be cheaper |
So many shares looking weak |
I agree about the markets London really is poor but when you look at Galliford and Morgan Sindall two companies who make regular updates they sell on greater earnings than Costain shareholders need these updates if the news is good then shares will respond |
It’s maybe recent media coverage of that it took 23 years to build the Heads of the Valley road in Wales, which Costain were involved with from 2015. The media coverage hasn’t mention Costain as far as I can see, but it gives the market an excuse to drop the share price I’m sure it’s a temporary blip. |
Maybe just markets are not great? |
No trading update announcement last year was 10th January shares down 7% in 2 days company is poor in keeping shareholders informed perhaps bad news is coming? |
Although you could say its been in a range for about 3 months. |
How can you say it’s in a range? It’s up 25% in 6 months and at 5 year highs… |
Fundamentals no longer mean much. This is a degen market and will remain that way for quite a while until we get a real recession |
Similarly there are 3 analysts covering Costain with a 12 month forecastMin 115pMax 187pAverage 145pAgree there yours and analysts forecast that there will be further highs to come. My target is 160p this year. |
I look at it like this. Its nearest comparator is GFRD - cashed up small constructor who went wrong and now rebuilding. GFRD shares bottomed mid 2019 c100p and are up 4x since. COST bottomed mid 2022 c35p and 4x from there puts you on 140p. And that is before you allow for the fact that COST likely has the higher m/t margin potential. |
Volume about average, needs to clear 114 to be out of the current range. Removing the very large cash position, this is still on an undemanding multiple.
Said it before, another 10m buyback is currently small change out of that cash pile and good bang for buck at these low prices. |
Good to see, but it's still in a range. |
Share Price Spike? Hmmmm :) |
Good to see this hitting new highs as the year starts. |
The ratings you refer to Sophia were achieved, from (fallible) memory perhaps ten years after Costain's last disaster, so it can be a slow progression while the most recent disaster is still a painful memory for many.
I also expect the management to be careful in two respects over the medium term future.
Firstly they will, I hope, exercise great care in selecting tender targets and pricing them, and secondly they will, I expect, hold on to undeclared profits each year to ensure no hiccups - ie. they will want to make the profits rise consistently. If they manage that the share price will do very well over time I'm sure. My first ever share buy was in a construction company which did precisely those things and the shares went from 7 pence to £2.68 in ten years after a "near death" experience. |
For those who like a little bit of history when estimating the value of a company.
In 2015 Costain generated decent results: revenue was 1.3bn, adj operating income 33m (op. margin was 2.5%. With 105 outstading shares, adj EPS was 25. Order book: 3.9bn. Net cash balance 108.
With a share price of £3.6, market cap was 378, ie a P/E of 14.4 time.
With an EV of 270m, the company was valued at 8 times the operating profit.
TODAY:
If we apply the same multiples to the consensus' figures we would have:
- Based on P/E = £1.77
- Based on EV/Ebit = £1.82 (Market cap of £498 - net cash 160 = EV 338/adj Ebit42)
Consensus often tends to be optimistic so you can make your own estimates, but in any case, even after a very nice run, this remains undervalued.
The recent wins make it also probable that the forward work position (although different from order book) will be very good and significantly ahead of 1H24. With today's announcement, I think we have surpassed the 5bn's mark. |
Indeed, never expected Costain to be one of my good performers.
Approx 160m still in cash values the business at just over 130m, this is still massively undervalued. |
This company really is going places now. Well done all LTHs. I remember getting my final chunk at 35p! |
Siemens Mobility and Costain Joint Venture Wins HS2 Systems ContractNew contract to deliver high voltage power supply systemsCostain Group PLC ("Costain" or the "Group") today announces that a Siemens Mobility and Costain Limited 50/50 Joint Venture is the successful bidder for a contract, to be signed in due course, to deliver high voltage power supply systems for the HS2 project throughout the 225km route from Birmingham to London.The contract is expected to be worth in the region of £300m to the joint venture, with optional contract extensions. There is a separate maintenance contract following the design and build phase which will operate for seven years and is valued at £32m for the joint venture. |
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
Hot Features
Premium
