Costain Share Discussion Threads

[koetser] 30/6/2019 09:55

buywell2

Do you know what the fiscal multiplier or the money multiplier is?
If you dont send the EU 39Bn or save 13Bn yearly the money that the government can spend is (money not flushed down the toilet to the EU) x fiscal multiplier.
This is how all governments around the world do their spending plans and why all governments run a debt!!!!!

[buywell2] 30/6/2019 09:54

Those folks miss the macros like HS2 and don't understand charts properly

The COST chart share price on friday stopped at the bottom channel line going back to 2002

It did so because trading platform computers and their algorithms are programmed to use charts

However those platforms do NOT use macros like Boris becoming PM and cancelling HS2 because such events can't be programmed in hence the BIG drop of 44% to the chart channel low.



I may as well add that IMO the COST chart indicates that if HS2 got cancelled or some other major macro hit the English economy COST could retest 100p

dyor

[cerrito] 30/6/2019 09:45

I went back in late Friday afternoon. I was in for many years and sold out c 450 as I needed the cash.
Fwiw
I see that on Friday Investec had a new TP of 250:Stifel 353 Liberum 350 and Peel Hunt under review.

[buywell2] 30/6/2019 09:25

The big problem as buywell sees it is HS2 and Boris Johnson the new PM

HS2 was budgeted at a cost of 50Bn to begin with

This has now gone up to 65Bn and my experience of BR spend on big contracts V estimates is that HS2 will come in at over 100Bn when it has been completed.

Too expensive for Boris as he has started to promise monies to improve schools, policing and tax cuts. The list of spends will grow longer as we head toward the vote.

Where is the money coming from ?

There is some fiscal headroom ie Debt that we can take on but opponents won't like that with no deal looming large

There is the 39Bn divorce bill to get a deal ... which if BJ does in fact pay with no decent deal for England means his time as PM will probably be even shorter than Mays.

So England does NOT pay the 39Bn and Boris can say he is going to spend it on NHS improvements ... which will shut everybody's gobs.

Still leaves him needing well over another 50 Bn to find for his spending promises , which could well include cancelling student debts to buy the young vote back in time for the next election. Corbyn will promise that anyway so BJ has to match it or promise it first. This alone will cost in excess of 100Bn so it will have to be phased in stages over 5 years in office.


So HS2 has to go and Boris can use the monies for his other promises

A token 10Bn to perhaps 20Bn could go to electrify the remaining main line rail tracks in England which would reduce Diesel train use and carbon emissions thus appeasing some greens.

The fall of COST on friday IMO came from the realization that HS2 being cancelled by BJ is more likely than not as his becoming the PM looks a shoe-in by Tory Party members with over 60% plus wanting him.

Other Construction companies awarded HS2 contracts should be looked at IMO
See who



buywell has added comment on the BBY thread

If the sunday papers have not picked up on this logic then they are very remiss

dyor

[hiraniha] 29/6/2019 19:04

Until I see some Director purchases fairly soon, I am not adding.Just my effing luck that I topped up earlier this week. Doh!My break-even is 280 but unlike Kier, I'm sticking with this one.

[cheshire man] 29/6/2019 18:13

bamboo2 Having read back on this thread before I bought I have your charting skills to thank for not buying in earlier, excellent stuff :-)

[bamboo2] 29/6/2019 17:35

Fridays closing price managed to break historical support back as far as 2003. [The year]

[bamboo2] 29/6/2019 16:41

pakenham, I can't see why they would have another update on Tuesday, following the one yesterday. Unless the new CEO is using his strategy statement to play games with the share price?

Having said that the chart does suggest a potential turn mid week.

[pakenham] 29/6/2019 15:51

Good post Cheshire

Revenue secured for FY2020 is c£900 million (compared to c£850 million for FY2019 at the same stage last year) and is also higher margin business overall. Very low pe - high yield - will bounce - bots had their moment on friday... expecting Tuesday's update to show how undervalued this is and good to see brokers making it a buy on Friday.

[cheshire man] 29/6/2019 15:22

Took a few yesterday at 1.74p and happy to take some more if it goes lower however I feel the drop may have been overdone but time will tell,,,,,decent % yield to keep me interested for now DYOR





Revenue secured to date for FY2019 is £1.1 billion with the Group's operating divisions expected to trade within the target margin range for the year. Revenue secured for FY2020 is c£900 million (compared to c£850 million for FY2019 at the same stage last year) and is also higher margin business overall.


Alex Vaughan, chief executive officer, commented:

"Despite delays to the timing of certain contract start dates and new awards, our markets are strong, as evidenced by the breadth of our new contract awards in the first half.

"We have a strong balance sheet, profitable operations and a broad range of capabilities to support the growth of the business. Costain is well placed to secure the opportunities ahead of us.

[bamboo2] 29/6/2019 12:03

For years and years the Tory party has tried to undermine local government services, forcing them to divert energy into running Competitive Contract Tendering in the belief that this will save money and improve the quality of the offering.

The companies that have won the outsourced services contracts have found that it simply is not possible to make a profit from them, partly because the existing in house teams had already stripped away any fat, due to previous budget cuts.

A few years ago the govt saw more and more local government work being taken back in house, as evidence of the failure of the CCT experiment started to surface. Govt attempted to shift the balance back toward outsourcers by removing the need for them to charge VAT on the labour element of their tenders. Even this has failed to stop the rot, as is evident by the relentless pressure on the outsourcers share prices.

[pakenham] 29/6/2019 10:30

Net cash healthy and making a decent profit compared to mcap. Orders are ahead of this time last year. If the dividend is cut it will probably be much higher yield at this mkt cap. I see brokers gave it a buy rating rating yesterday. Expecting a bounce on Monday.

[kinwah] 29/6/2019 03:21

Such is the nervousness in the sector,a fairly modest profit warning devastates the COST share price. This must be due to investors thinking as with Kier there is worse to come. Any problem is seen as just the tip of an iceberg. That has to be wrong but it takes a brave investor to try and pick the bargains amongst the corporate carnage.

[escapetohome] 28/6/2019 21:17

Public private partnerships dont seem to work well in construction.
Long term contracts attractive to private sector but they go in too low a price and are stuck in over the long term at an unattractive price for their work.
Funding from central govt lumpy, client needs money from developments to realise infastructure, a recipe for disaster in my opinion.

Private sector goes all out to please client leads to scope creep.

Poor morale retention of staff many of which who dont have career paths articulated for them.

Club style management, great if youre in the club.

[buywell3] 28/6/2019 19:57

You really believe that do you ?

Read up on how MM's have to report share trades

[complex machinery] 28/6/2019 19:54

About a million cumulative buys in the last 10 mins.

[blueball] 28/6/2019 18:13

Stay in cash.

[buywell3] 28/6/2019 16:52

Probably not for the next few years

[tsmith2] 28/6/2019 16:04

Dipped toe

[pal44] 28/6/2019 15:49

Q will Cost benefit if BoJo wins as he wants to beef up infrastructure unless its BS !

[roberto mancini] 28/6/2019 15:29

Contracts most likely over budget, mkt has got wind imo. pi's last to find out!!!

[rogerrail] 28/6/2019 15:20

Fall is so overdone its untrue. Clearly influenced by whats gone before with Carillion, Kier, Interserve, Galliford but COST has cash/no debt problems so no fire sale or cash raising necessary, and no difficult contracts , forward order book looks healthy and infrastructure spending set to rise. I expect it will recover to the £2.50 level before too long.