Costain Share Discussion Threads

[casholaa] 21/12/2023 11:03

Double top?

[eigthwonder] 20/12/2023 19:16

Thanks Catabrit. I used to be involved in this game for a job so I have seen most tricks of the trade, and while brokership interests have always played an important role in small cap broking today there is so little truly independent research out there. On your further points.... two aspects of PI investing which you won't find amongst professionals is (i) simply repeating "the shares will go up" doesn't mean it is cheap and will go up, and (ii) because shares have recently gone up is not necessarily a guarantee they will continue to go up. As for income - I'm quite fan of it as a value discipline, it's a good underpin if you are early to the idea. But income for income sake, that which is being paid in lieu of capital, is not a prescription for long term capital appreciation.

[catabrit] 20/12/2023 19:14

But is it not offset by higher liabilities? I have no idea how LDI works to be fair. But intuitively it seems wrong to say that higher yields is good for the pension plan and to also claim that lower yields are. Especially as we kinda want the plan to be in technical funded status to get our hands on all that FCF. Still, with the massive rise in yields in the last 18-months it seems - on balance - fair to be quite bullish on the probability of that plan now being fully funded.

If anyone else (with more expertise) could chip in that would be appreciated.

[dickbush] 20/12/2023 19:07

I'm no fan of LDI being a big part of a pension fund, but with Gilts and Corporate Bond yields having declined so substantially in the past few weeks, Cost's Pension Fund assets must be looking pretty healthy.

[catabrit] 20/12/2023 17:52

Thank you Eight. Really like some of your stuff by the way and am glad to read that you are also not a fan of Blackhorse. I find his ramping deplorable. Concur with your thoughts on Phoenix too which most of the yield pigs seem to completely omit from their (typically basic) level one thinking.

[eigthwonder] 20/12/2023 17:42

in small caps, new coverage usually means that the analyst has been told to take up coverage as that helps a corporate broker pitch to win the brokerage (where the real money is these days). In a MIFID world it doesn't pay analysts to take up coverage just because they think it is good or may make money.

[catabrit] 20/12/2023 14:31

Rogue - possibly my favourite ADVFN comment of 2023!

[roguemale1] 20/12/2023 13:42

After that prompt, I just noticed that the Investors Home page has a backdrop of a car dashboard with the quote "Auto Pilot Activated" across the steering wheel in some kind of pseudo head-up display....

I wonder if that refers to them or us??!

Merry Xmas all. Switch off and have a good one!

[casholaa] 20/12/2023 11:45

I once read on one of these boards (within the last 6 months or so) that the best coverage notes are the ones where coverage commences by analysts as they do the number-crunching. Nobody likes dead money and missed opportunities. (new coverage)

[catabrit] 20/12/2023 11:11

Do not mind you knocking and nor do I mind you being weary. Think the latter is absolutely understandable by the way! But it is good to lay down these markers, no?

[casholaa] 20/12/2023 10:57

I'd rather they tried to convince me with numbers. (I'm not knocking it, just weary)

[catabrit] 20/12/2023 10:52

Yeah well the chart sucked pre November and a few people felt smart for selling when it dipped down to 48p. So yeah, that is my view on charts. They look right until they don’t.

Consensus is very helpful as it shows you what the analysts are assuming. Which is useful when you’re woefully undervalued and inflecting.

Oh and if you care about charts then IMHO the only chart that matters is the one from July 22 and that looks consistent and beautiful :)

[casholaa] 20/12/2023 10:44

Careful, the chart looks a bit pumped-up to me and now, I can't understand why they'd want to add a 'section on consensus'?????

[pinemartin9] 15/12/2023 18:52

Well done holders. A few of us have been here for a while, looks good here. Improving margins, dividends being paid and (hopefully) contract wins coming through. One of the main catalysts has been the fact we've put some of our legacy loss making contracts behind us.

[ttny2004] 15/12/2023 17:26

Well done, and agree about 2024 and think we will finish 2024 in surplus of 100p

[roguemale1] 09/12/2023 13:12

Yep, best get Cardiff rugby club onside eh? And don't agree to + - 0.5 degrees on aircon!
Mind you by the time Ray did the deal they had a lot of cash squirreled away in all the jobs...

I just feel that one or two of the tier one concrete farmers will be looking at the current price and wondering if they have the cojones to try it....just a musing. Then again they've all had a battering from fixed prices and/or the CMA so maybe I'm just being romantic...

[muckshifter] 09/12/2023 12:13

Hope you're right about the quid by end of March Roguemale1, and although Costain have a lot of history in the middle east I can't see a takeover coming from there, or anywhere else for that matter while the company is trying to make serious changes to the balance of its workload - maybe a year or more from now it might be a target.

The "terrible tangle" Costain got into looks to me very similar to the one Laing got themselves into some years ago. Laing were always the "clever" contractor when I was young, doing prestige difficult jobs, and they got too "clever" and over confident ending up taking two huge contracts on dangerous contract terms which effectively finished them. Costain, in those days, were also known as a top rank contractor, so perhaps they fell into the same trap.

Recovery periods have always served me well with contractors and I'm fairly confident that the recovery will here.

[masurenguy] 09/12/2023 11:10

Interesting - no current position.

Costain Group
The Telegraph
Shareholders haven’t forgiven this infrastructure specialist since it “got itself into a terrible tangle” with two projects a few years ago, forcing it to seek £100m in extra equity in 2020. But the shares are now heavily discounted on ten times forecast earnings. Indeed, after adjusting for pensions and leases, the £167m in net cash on the balance sheet actually exceeded the market capitalisation at 28 November. The shares are priced for further disappointments, so even a small improvement in performance and margins could now offer decent upside. 57p

[roguemale1] 08/12/2023 16:12

My birthday is end of March.
My opinion currently a quid or a takeover by then after results.... am still worried about a low ball takeover, the UAe boys notwithstanding.
We shall see.
Have a good weekend all!

[catabrit] 08/12/2023 10:25

That is high roller chat Rogue and I love it! Haha.

I think we stand good odds of hitting a three digit share price by the end of 2024.

[roguemale1] 08/12/2023 09:32

And I'll be comfortable when it has a 9 in front of it!

[pinemartin9] 07/12/2023 14:37

Looks like the share price is getting comfortable with a 6 in front of it.

[chris magpie] 05/12/2023 17:00

Still think will depend alot on how Order Book looks at year end as currently well below last few years but hopefully they can hit or exceed target EBIT for 2023 and return some confidence to turn around in fortunes. Sadly this business still full of low margin contracts and if one or two turn bad you are stuffed. But think Costain in better shape theses past two years so hopefully profit will start to increase as a % of Turnover.

[grahamburn] 05/12/2023 10:27

Brief mention in this