DCG - Decmil Group

[ValueSnatcher]

NPAT came out alot lower than what alot of people in this thread had expected. Even a little lower than what I had penned down.

Number of workers has gone down by about 40% from 900something to 500something...a big concern seeing as in WA the skills shortage is getting extreme (from what I've heard). This could really be a problem if they have to hire quickly (paying exuberant amounts).

I heard on the business channel a few weeks back that some of the big companies were even putting workers on a year in advance of them actually being required..just to ensure they had them when they needed them!!

[McCoy Pauley]

DCG being hammered early. Down almost 6% in the first few minutes of trading. Investors not happy with the report.

[skc]

Probably a bit of nervousness ahead of their full year results. Anyone who bought in since the HY result are pretty much underwater.

The old saying "It's falling so market must know something" tends to scare plenty of people away.

Yup the market did know something. I have no idea how it knows what it knows.

There are no shortage of examples where the market is totally stupid. At the same time, examples like these show how smart the market can be.

The learning never ends...

[Noddy]

DCG have produced record results.
Revenue up 20%
NPAT up 24%
EPS 18.9cp
CASH ON HAND $64 mil
ROE 20%
Strong order book
Maiden dividend 6cps.

What's not to like, yet the price has fallen nearly 10% today.
Hard to understand ?

[skc]

DCG have produced record results.
Revenue up 20%
NPAT up 24%
EPS 18.9cp
CASH ON HAND $64 mil
ROE 20%
Strong order book
Maiden dividend 6cps.

What's not to like, yet the price has fallen nearly 10% today.
Hard to understand ?

Share price falling doesn't mean the company is not doing well. It can also mean that the share price was too high before.

If you look at their 2nd half numbers they were substantially weaker than first half. e.g. Full year NPAT $23.5m, HY NPAT $14.2m, which means H2 was only $9.3m.

If they have little or no growth, a PE ~10-12 would be a fair price. Based on their EPS ~18.9c that's $1.89 to $2.25. But chances are, because of the weak H2 figures, market is saying rolling 12month EPS of 15c @ PE 12 ~$1.9.

The current share price is only an opportunity if they re-gain momentum to grow EPS...

For a strong result and market's reaction to it, look at IDL.

[drlog]

Share price falling doesn't mean the company is not doing well. It can also mean that the share price was too high before.

If you look at their 2nd half numbers they were substantially weaker than first half. e.g. Full year NPAT $23.5m, HY NPAT $14.2m, which means H2 was only $9.3m.

If they have little or no growth, a PE ~10-12 would be a fair price. Based on their EPS ~18.9c that's $1.89 to $2.25. But chances are, because of the weak H2 figures, market is saying rolling 12month EPS of 15c @ PE 12 ~$1.9.

The current share price is only an opportunity if they re-gain momentum to grow EPS...

For a strong result and market's reaction to it, look at IDL.

You make some excellent points. The order book is currently at 300mil with a further 670mil tendered and 3bn potential. I think growth will continue in at least the medium term.

ROE did fall as did operating cash flow - something to keep our eyes on.

Like you stated before, the number of employees were reduced due to ramp updelays - does anyone have insights on that? Perhaps it means more aggressive future growth IF they are able to find more staff at the right time.

All in all, I think the market has undervalued DCG - I think they are worth at least $2 so I will continue holding.

[tinhat]

Wow, I really wish I had bought some more DCG when the price was trading around $2 late last year.

I wonder what price targets people have for DCG? I'm thinking $3.30 would be a good run (which is also around consensus). That would also represent a PE of 12 based on consensus forecasts of EPS of 27.20 for 2013. My problem is letting profits run though. I got stung last year by not taking profits and sticking to stop losses so I've been a bit shy this year and have sold out early in the run-up on a couple of stocks only to see them climb further in recent weeks.

On the charts the 200 day MA is only just turning up.

I've got a lot of stocks in my portfolio that are nearing their 2011 highs and it's making me nervous!

[tinhat]

DCG share price up 10% today on the announcement that they are buying the remaining 50% of the Gladstone accommodation joint venture. I don't know what the analysis of the deal is, but there is some expectation that this could be a good income producer over the medium term.

[tinhat]

DCG is getting hammered today with some bigger volume going through after the bell. I wonder if there is something I don't know about going on.

[Boggo]

DCG is getting hammered today with some bigger volume going through after the bell. I wonder if there is something I don't know about going on.

Not sure what happened there tinny, I was long at 2.63 but stopped out at 2.70 today (held 6000, not 9250 as indicated below).
Was heading nicely towards target but something spooked it.