Costain Share Discussion Threads

[dickbush] 30/8/2023 09:58

Costain heading for circa 11p (adjusted) in 2023 v 9.9p (adjusted) in 2022. So, prospective p/e of 5. If management can match words with deeds re Operating Margins and avoid anymore SNAFU's, the shares can double over the next couple of years.

For patient, optimistic investors.

[ttny2004] 29/8/2023 22:30

Kiel P/E 16, and Costain P/E 7. So comparatively shows how much Costain is undervalued compared to its peers.On my opinion Costain should be 80p plus for starters.

[sikhthetech] 28/8/2023 21:15

Grahamburn,

Thanks for the article.
I think they need to sort out their statements re dividend. Doesn't match with what should normally happen.
The articles and brokers point to hope of a turnaround.
On my watchlist


hamhamham
re Imastu.

I had several similar exchanges with Imastu on TW thread. He got TW completely wrong. He was posting sector and economic newsflow which would impact HBs whilst he was ramping all the way down.
He also claimed to have made £60k on these even though the share price was lower than when he started ramping!!

[hamhamham1] 25/8/2023 18:17

Shame imastu not still here, I enjoyed arguing that investing in both Costain and Kier was a good idea, whereas he was firmly just Costain, but also he was in Polymetal, and that shows the perils of... events dear boy, events.

[hamhamham1] 25/8/2023 16:44

Nice and steady rise :)

[thags] 25/8/2023 15:50

STT what gems have you come across during your DD. please share some tickers, you can never cover all areas yourself so its always good to hear new ideas...

[grahamburn] 25/8/2023 14:57

Headline, first para, concluding 2 paras and final recommendation from Tempus in Times (plenty of known detail in between):

Costain, the builders’ ugly duckling, may fly again

There is nothing like the whiff of a dividend to set investors’ adrenaline pumping, even from, well, a mixed set of results. That is what the builder Costain delivered on Wednesday, and the package has been well received since. The shares jumped from 46½p on Tuesday — ahead of the official announcement — to nearly 53p at one stage yesterday. They are coming out of intensive care, where they have lain since the pandemic, so it may be time to examine the company anew.

So there is plenty going on, and signs that the current management is getting to grips with the headaches that have plagued the group in recent years. However, the comparison with the near-rival Balfour Beatty is instructive: both are in HS2, but Balfour is valued by the stock market at ten times Costain, on revenues five times larger and much more widely spread, including to the US. Balfour has paid dividends through and since Covid. But this is a reverse beauty parade. It begins to look increasingly that Costain, the ugly duckling, has been shamefully neglected by the stock market, leaving the share price appearing anomalous and set for recovery.

On the back of pre-tax profits rising from £40 million-or-so this year, they should get close to £50 million for 2025. At current levels, the shares are trading on less than four times earnings two years hence, while the dividend yield is set to rise to about 2.8 per cent. That p/e ratio must surely blossom.

ADVICE Buy
WHY Unjustifiably overlooked after a long period in the doldrums

[dickbush] 25/8/2023 14:11

Apologies if someone has already pointed this out but there is a very positive write-up of Costain in the Times today. Looking for growth in earnings again in 2024 and 2025 and a revaluation of the earnings.

[chelseamann] 25/8/2023 12:43

Oooops wasn't meaning to dis the Cost and big up the CF.....happy to keep it my little secret.....Cost is my John Miles share equivalent.....it was my first love (1987 had some when I worked for them as a young puppy). Recently bought back in at 44p and lack the patience to stay the course as there are too many sweets in the shop

[catabrit] 25/8/2023 12:27

C’mon Chelsea. We ruin our credibility a bit if we mention other unrelated names in a thread. Who cares about Card Factory? That’s twice you’ve mentioned them. I have a couple of other holdings outside of COST and you won’t see me talking about them on here. Nobody cares! If Card is a bargain, people will discover it!

[chelseamann] 25/8/2023 12:07

Just wish they would announce news about the dividend ......my money has other places to be (costain i think will be a slow burner in the upwards direction so moving to Card Factory for a bit)

[owenski] 25/8/2023 11:11

2020 fund raise of 100m was at 60p, still below this and business is improving.

[pinemartin9] 25/8/2023 10:51

Unless those bag holders see value now and decide to hold. Why sell now? Quite the opposite. Now is the time to buy.

[thags] 25/8/2023 10:48

I believe a lot of people are bagholding this so will take time for them to offload upto 60p. once it gets above that level then hopefully we should be left with more long term holders who see the true value in this FCF generating no debt business with a MC equal to cash. you don't get many of these nowadays

[pinemartin9] 25/8/2023 10:39

Golden cross fully formed. All moving averages (200, 50, 10) trending up. Increase in volumes over last 4 positive trading days. Press coverage. Derisked fundamentals. I'm the most bullish I have been for a long time here. Weekend press coverage could help. Let's hope for some tipsters like Robbie Burns buying in. That would really up the ante.

Fundamentals and increase in margin look very good here. Happy holding this. I'm massively overweight in this, 16.4% of my portfolio at today's prices. This has a big impact for me.

[catabrit] 25/8/2023 10:14

Agreed with the re rating and as stressed previously it started about a year ago. We will have bumps along the way and a lot will trade this and jump ship once technicals are breached (60p) but I’m holding mine for the margin expansion as I think we’ll rocket then.

Interestingly, Costain has been written-up twice in The Times in the last 24hrs.

[dickbush] 25/8/2023 10:02

Many thanks, value hound. A nice find which seems to be helping the cause.

[casholaa] 25/8/2023 09:57

About time.

[thags] 25/8/2023 09:52

I watched the investor meet company podcast on youtube yesterday with Alex and Helen being interviewed. It was on the whole positive with a lot of your questions placed to them. It appears to be a waiting game for the market to re-rate given the cash balance. they are guiding towards a net margin of 4.5% or so in the next couple of years focusing on consultancy work of higher margin. Hopefully they can get enough work and at a higher margin to get things going again

[pinemartin9] 25/8/2023 09:38

Here is the start of the rerating. Sit tight peeps!

[thags] 24/8/2023 21:36

Ok STT, what ideas do you have for long trades or undervalued plays which you have been following on companies and sector newsflows. I'd like to hear some ideas for a change than people going back and forth with exchanges

[thags] 24/8/2023 20:34

One thing that annoys me about these forums which I primarily use for DD and trade ideas is when certain people de-ramp a stock for whatever motive they have. Sikhthetech I understand you're a trader more chart biased but can you please not turn this forum into a dirt slinging arena like so many other ones have become like centamin and nanoco. Let's leave it purely civil and constructive