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DOW - Downer EDI

Discussion in 'Stocks 0-H' started by GreatPig, Aug 9, 2006.

  1. GreatPig

    GreatPig Pigs In Space

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    One way to correct back to the longer-term trend :eek:

    Fortunately I don't hold.

    Cheers,
    GP
     

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  2. kennas

    kennas hoarding tinned food

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    :(

    I hold quite a few, but fortunately bought at an average $3.80ish.

    Took a bold punt this afternoon and bought another chunk at $5.14 expecting a bounce. I might have well gone down to Crown, but hey, you only live once. :D

    My theory is that a 30% drop is a knee jerk reaction and companies making good profits ($138m less abnormals), come back.
     
  3. michael_selway

    michael_selway Coal & Phosphate, thats it!

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    Do u think Future NPAT forecasts wil be affected?

    Earnings and Dividends Forecast (cents per share)
    2005 2006 2007 2008
    EPS 32.8 48.3 55.9 61.4
    DPS 18.0 25.0 28.0 31.0

    thx

    MS
     
  4. kennas

    kennas hoarding tinned food

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    The current sp gives it a forecst p/e of about 10.3. (from fat profits)

    With the other engineering/contractor firms in high teens and 20s, that's pretty low!

    Lonsec are rating it a hold while Aegis is reviewing it's recommendation to sell.
     
  5. kennas

    kennas hoarding tinned food

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    Trying to find a positive spin here:

    Director Stephen Gillies buying $1.8m of shares yesterday at $5.17 is a good sign to me.

    Not a lot of good news in the papers this morning. :(
     
  6. kennas

    kennas hoarding tinned food

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    Well, I took a gamble of such and bought a few more expecting a bounce after the market overreacted on Wednesday. Perhaps lucky get a 6% rise in past 2 days.

    Aegis have raised their recommendation from Hold to Buy based on the price movement which places DOW on a prospective pe of around 10.

    "We reiterate our view on DOW's 8 August shock announcement. The provisioning was a surprise, but sometimes contracts turn "rogue". The real concern is that the company moved to hose down the market's medium term earnings projections with a below consensus $155M NPAT guidance for FY07. It will take some time for sceptical investors to forgive and forget. For those bargain hunters with a "buy and hold" ethos now is an opportunity. Next stop, the company's full FY06 results on 22 August."
     
  7. kennas

    kennas hoarding tinned food

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    Up 8% from fall.

    6 directors bought shares in past 3 days.

    Aegis/HSBC now have it at buy with 12 mth target $6.65.
     
  8. michael_selway

    michael_selway Coal & Phosphate, thats it!

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    its recovering well it appears since first day

    thx

    MS
     
  9. kennas

    kennas hoarding tinned food

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    I'm not convinced the cat is alive though Michael. Will be under pressure when they announce final results on 28 Aug (I think)
     
  10. Julia

    Julia In Memoriam

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    Kennas
    I don't hold this stock but noticed the large drop (who wouldn't?)
    I'm interested to know why after such a large write down you bought more before any reversal or uptrend began? Do you have such great confidence in the company, was it gut feeling, or some other technical consideration that is eluding me?

    I'm not at all being critical but am really interested to know why you did this.
    You are "not convinced the cat is alive". Did you consider waiting until said cat started twitching its tail before buying more?

    Julia
     
  11. Freeballinginawetsuit

    Freeballinginawetsuit Well-Known Member

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    I bought these also at $ 5.18. Only because I thought the reaction was overdone. Downer has decent fundamentals and their SP going down was only because of their stuff up on the ILU quote and subsequent proffit loss.Downer are a solid company and why wouldn't you buy in on a one of SP drop?.
     
  12. kennas

    kennas hoarding tinned food

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    Julia, I've noticed that in the past that after a 'good' company produces a negative result in a jittery market, they get smashed and it it generally oversold. This represents a short term buying opportunity imo, but it is of course risky (Isn't it all).

    I have held this company for 3 years and have had a fantastic return and have been very impressed with management. Up to now. So, I calculated it was worth the risk at the time.

    I have now sold my entire holdings and made about 10% on the shares I bought when it bombed.

    I've sold out pending stabilisation of the sp, their final result, and the NSW rail car contract they are competing with UGL over. If UGL get it, then I think DOW will find it hard to keep support. On the other hand if they get it, then they will probably recover nicely.

    Interesting that brokers are going one way and the other. Aegis/HSBC/Lonsec say hold, Fat Profits say sell.........Both can't be right. And they're the 'experts'!!

    I'm back on the side for the moment.
     
  13. Freeballinginawetsuit

    Freeballinginawetsuit Well-Known Member

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    Dow performed well today on good volume.
     
  14. dutchie

    dutchie Well-Known Member

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    DOW performing well again today up 30c (5.2%) on average volume.

    Somebody knows something.

    Cheers

    Dutchie
     
  15. Halba

    Halba Well-Known Member

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    bidders are looming the rumour is everywhere now

    selling at a p/e of 10. easy prey for a cashed up predator, when peers are selling for double the valuation
     
  16. Freeballinginawetsuit

    Freeballinginawetsuit Well-Known Member

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    DOW is starting to build some momentum, glad I took the punt with this one last month.
    Positive momentum on a bad market day, a good sign.
     
  17. kennas

    kennas hoarding tinned food

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    I ended up selling all at $5.60. Now thinking to get back in again.

    Got a reference for the rumours Halba? Looks and sounds like it could be in play.

    Oh, an hi everyone. Back from playing war in the desert. How I love hot water flowing out of the shower head!
     
  18. Realist

    Realist Billie Jean is not my lover

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    Amazing that in the past 12 months DOW hit $5.18 ONCE for about 2 minutes and you managed to buy it then, you managed to buy DOW at the all time 12 month low, and you tell us about it a week later when DOW had rocketed up to $5.70.

    Amazing.

    How did you manage to pick that 2 minute period in the past 12 months. :cool:
     
  19. michael_selway

    michael_selway Coal & Phosphate, thats it!

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    yeah not bad Freeballinginawetsuit

    Earnings and Dividends Forecast (cents per share)
    2006 2007 2008 2009
    EPS 46.4 49.2 53.1 54.2
    DPS 20.0 25.0 26.2 27.0

    Well Fwd Terminal PE = $5.40, anything under is cheapish, but are there risks (upside & downside)?

    thx

    MS
     
  20. kennas

    kennas hoarding tinned food

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    Looks to have recovered very nicely, good support around $5.50 in the end and pushing through $6.00.

    I sold at $5.60 and and now taking another look as the bad news has pretty well washed away.

    Upside potential in the coming days with the NSW rail contract to be awarded. UGL are expected to get it and I think this is already factored into the prices. If DOW win it would be worth quite a bit to their sp.....
     

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