giddy up !, page-164

Sorry Chaddy36 I didn't answer the FMG point you raised. Please see the following comment which is worth posting in full:

"Arrium (ASX: ARI) and Fortescue (ASX: FMG) are ‘pure play’ iron ore companies. Investors, and the general public, have begun to realise the impact of lower commodity prices through the numerous amounts of job cuts. Despite reassurances from both sets of management, iron ore will fall and it will have an adverse effect on their results. To make a better informed decision, investors will be wise to wait until the companies release their upcoming annual reports.

When revenue falls and costs increase, contractors generally take the brunt of the slowdown. There is a seemingly endless list of mining services stocks that will be negatively impacted by a slowdown in mining exports. NRW Holdings (ASX: NWH), Ausdrill (ASX: ASL), Boart Longyear (ASX: BLY) and Emerco (ASX: EHL) have dropped around 70% each in the past year.

With high yields (or so it seems) and low price to earnings, some investors may think these stocks are bargains. However the companies are not discounted quality stocks and like their mining counterparts above, should be avoided until we do our due diligence and make a better informed decision later in the year."

Written on June the 23rd.