on 09/09 someone wrote: "Hard to forecast anything these days but i reckon 18c EPS for LCM FY14. For ultra-safe companies i'm willing to risk 12.5 PE. For small caps with revenue dependent on contract wins in an era of tightening margins... i feel LCM is a buy at 7x and a sell above 9x. Many analysts use the low interest rate environment to justify investing in shares. But it's low-interest coz the environment is so uncertain combined with too many companies fighting for same piece of turf and willing to sacrifice margins to get the work. So i remain cautious about buying as if world stability has somehow returned. The massive rise in many MS sector stks is an opportunity to exit and wait on sidelines. There will always be more opportunities imo. It's the nature of the mkt to throw-up stuff that provide wild swings. L&G sector def gives comfort to LCM."
Have had a rethink re LCM and have become pessimistic. It's partly due to mkt sentiment but mainly because projects are being delayed and margins are tighter, possibly tighter than we realise. Plus there is concern re debt for wk done in Kazakhstan. That may get paid but 1HFY14 looks weak. Assuming debt payment is not received, my new forecast is FY14 EPS 10.5c (5+5.5). But def dyor, i may well be too pessimistic. A lot depends on contract wins and MD is well connected. NZ acquisition also adds to earnings. Does Psychiatrist still hold?
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