Kentz Share Discussion Threads

[alter ego] 11/11/2013 15:13

I'll second that

[valhamos] 11/11/2013 13:34

I guess we've all held shares at some time where the company has caved in on what we considered a low ball offer. Pleased to see KENZ's determination to say no is being rewarded by a recovering share price for those of us who decided to stick it out.

[rivaldo] 11/11/2013 12:20

Completely agreed jeffian - you can't blame AMEC for trying to take advantage of a market anomaly/market lethargy/call it what you like.

But that was the kind of situation which allows investors to make decent amounts of money given the mispricing.

[jeffian] 11/11/2013 11:49

#4466,

To be fair to Amec, an indicative offer of 565-580 was hardly taking the pee when the share price here had been stuck in the 360-440 range for a year or so, but they have done us the favour of alerting the market to value. Some years ago I had a run-in with the Chairman of a company which he was taking private on the cheap. When challenged on how he could justify it, he answered "Because the market lets me". Hard to argue with, really.

[rogash] 11/11/2013 11:27

There seems to be some-one buying in the background

[rivaldo] 11/11/2013 09:18

Cheers bones.

The current share price shows what a bargain AMEC would have got had they succeeded.

I suspect any earnings-enhancing acquisition by KENZ utilising a large proportion of their cash pile would send the share price through 600p just for starters.

[bones] 08/11/2013 19:09

Some distinct levels of support and resistance in the chart forming where the initial gap up and subsequent gap down occurred. I have added to my long position late today due to the push toward the last resistance point at the current price together with a strong finish today with a little more volume than has been seen of late. Next resistance area on a breakout would seem to be 600p. Seems a fair target to aim at initially.

[rivaldo] 07/11/2013 14:01

Nice plug for KENZ in this new American article about the Australian Gorgon project:

hxxp://www.fool.com/investing/general/2013/11/06/australian-race-for-energy-a-look-at-the-promising.aspx

Extracts:

"What Investors Should Know About This Massive LNG Project
By Stephan Dube | More Articles | Save For Later
November 6, 2013 | Comments (0)

With only a few export terminals approved in the U.S. and endless regulatory government approvals, we have to be extremely patient before the U.S. will be able to ship its first cargo of LNG to a non-free trade country. As a matter of fact, other countries saw the huge opportunity for LNG exports since demand for the commodity notably increased in emerging markets.

However, there is a way to get involved right away in the race for LNG exports and claim your share of the profit. Australia is developing its abundant untapped natural gas resource and several LNG projects are under way in a race to make the most of the opportunity. Some major U.S. and international producers are currently involved in the play, but timing is key."

"Furthermore, a joint-venture formed between CB&I and Kentz contracted $2.3 billion for the mechanical and electrical work on the Gorgon project."

"Foolish conclusion
The Gorgon LNG project is expected to be a strong driver for the companies involved."

[rivaldo] 06/11/2013 13:35

The trading update will be on 18th November - not long to go now, and the share price looks nice and strong.

[steeplejack] 05/11/2013 11:59

Look at today's trade data,what the hell is that all about...1s and 2s.Some people need to get out more.

[lucky_lady] 05/11/2013 09:20

Well, this is a good thread !!!!!!!

[values fate] 30/10/2013 15:27

An oldish article on Kentz but good overview and long on the stock

hxxp://investingsidekick.com/kentz/

[rivaldo] 28/10/2013 09:35

Here's the summary page from Canaccord's new Buy note with the 600p target (note the 575p in the first paragraph is a typo).

And this valuation takes absolutely no account of the cash pile and/or the potential for earnings-enhancing acquisitions:

"Growth and value

Investment case

We initiate on Kentz with a BUY and 575p target. We believe the company has a
solid independent future ahead of it, with a customer and project mix that is
attractive and on which it can continue to manage risks effectively. We like the
decentralized management model, which has proven highly effective in local markets for many companies and is particularly appropriate for the construction industry where successful bidding relies on a deep understanding of local costs and cost risks, and where projects need continuous attention to manage execution risks. Price pressure in a number of its core markets is reducing, and we expect the Middle East region – which up to 2010 accounted for half its profits – to show better margins in bidding and to come back as a source of profits for Kentz. At the same time, the continuing growth of TSS's high-value commissioning and shutdown services has lifted overall margin, and has scope to improve Kentz's margins ahead of our assumptions in the medium term.

Sector context

Top-line growth at Kentz over the past five years has been 21% p.a. (organic), the highest rate of any of the 11 companies in this report. Whilst this growth is unlikely to continue – growing a $2bn business at 20% pa is more challenging and risky than growing a $500m one – we believe Kentz can continue to outperform sector peers thanks to a clear portfolio of services provided to a broadly defined customer base.

Company fundamentals

We expect EPS to be up 14% y/y in 13E, with a strong improvement in top-line
growth in the second half due to project phasing. In 14E we see EPS up 14%, one of the faster growth rates in the industry, thanks to a modest margin expansion (more TSS work) and continued increases in the project portfolio.

Valuation

We base our target 600p on Quest™, EV/EBIT and P/E. At our target the stock would trade at 12.6x 14E P/E, a modest premium to the long-run average reflecting the increasing liquidity of the stock and decent forecast growth.

Share performance catalyst

Kentz generally announces around half of its projects by value, and we anticipate a further $1.5bn in project awards in 13H2. Customer progress reports give important updates, in particular Chevron and Imperial Oil. The company's trading statement is due in early November."

[bones] 25/10/2013 22:32

Cheers rivaldo, will do.

[rivaldo] 25/10/2013 11:11

Good news - Canaccord have today initiated coverage of KENZ with a Buy and a 600p target:



OT : bones, snap re continuing to hold OPAY and ETO. You might take a look at ABDP, ACM, CMS and RNWH as other high quality smaller companies imho.

[bones] 22/10/2013 20:47

Hi roddiemac2

No, I sold CML around 470p which was a shame. Unfortunately most my holdings are via CFDs and CML is too small for that market. Anyway, good luck with that. It should go well with a cyclical upturn.

On the general market thing, I do actually think we are in the equivalent of 1998 in terms of a bull market (ie, middle to second half of a bull run but "excitable amateurs" climbing aboard!) so in my view it has a lot of heating up left in it yet, subject to turbulance to shake out the weak. I am geared long in CFDs so rest assured I am alert to signs of reversal but only occasionally top slicing holdings that have run hard (eg, ETO, OPAY, of which I still hold a good slug despite the sales).

I was late into KENZ and am holding firm for the re-rating that I think will happen. AMEC and M&W have all but spilt the beans there.

[roddiemac2] 22/10/2013 19:57

bones,

Five days ago I prefaced an email to a friend ---"While it could be argued that markets are getting a bit heated, I have my eyes firmly fixed on individual companies"---Do you still hold CML ? Interims should be interesting in November.

[gargoyle2] 21/10/2013 20:34

Good call, bones.

[bones] 21/10/2013 18:08

The BB's of a lot of my stocks are starting to attract people obsessed with stock tips, which I find a bit concerning as being a toppy sign in the markets. Tell me it is not so!

[whizzy1] 21/10/2013 18:03

Something's afoot again!

[jeffian] 21/10/2013 16:02

#4451,
Not yet it doesn't! (We're still some way below the indicative offer price). But it's certainly done us a favour by drawing attention to the share and caused a re-rating which many of us thought it deserved.

[11023154] 21/10/2013 16:01

yep, whats our targets here?

[pabster] 21/10/2013 15:05

Just goes to show that management were right to reject those bids!

[rivaldo] 21/10/2013 08:48

Nice start. KENZ is quite volatile, so any effect of tips can be magnified, but KENZ was a tip update in the Mail rather than the main tip so the movement is much less pronounced. The main Mail tip (AUE) has had an amazing amount of volume going through today and the price is up 18%!