Where's the update? |
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Since 6th Jan Galliford up slightly following trading update Morgan Sindall down 4% Kier down 9% Costain down 13% (interesting) |
Worth a trade here, tight stop |
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Costain's PF's substantial exposure to LDI was supposed to reduce the volatility of its Surplus/Deficit. Ever since Truss gave a real world example of what could go wrong there has been a rush to sell the equities of companies with large LDI exposures
in their PF's when Gilt yields headed for recent highs. |
Last year
Costain Group PLC
10 January 2024
Costain AMP8 Framework Agreement with Northumbrian Water Group and Trading Update
Appointment adds to Costain's wins in the new water regulatory cycle.
I can't see any Trading Update in Jan 2023.
We certainly aren't overwhelmed by company communications. |
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. |
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