whats doing, page-19

{Warning, this is not a short post!}

Yes well the BUY recommendations started a while ago, when the SP was the equivalent of $3.30 or so (see my diatriabe about being an anal-yst).

With respect, I have been jobbing BLY for most of the year, started buying when the placement had been finalised.

From my experience, the SP tends to rally strongly post placement and often recovers to its previous highs.

Consolidations confuse the issue as many retail punters believe they have made a 1000% gain (for example) and sell into it, but this is an ASX top 100 stock so this effect is likely to be limited.

What we have had however is much confusion about future growth and what is going on in China.

Once this settles, it is my opinion that this stock will eventually recover its all time highs, as will CBA, RIO, BHP and all of the current ASX top 100. The issue is when.

Regardless, BLY was first listed in June 07 (please correct me if I am wrong) at an issue price of $1.50, equivalent to $15.00 post consolidation.

The SP traded to its high of over $22 in 29 July 07 but was still trading at over $19.00 (post consolidation equivlents) in Jun 2008.

It is the biggest mining services company in the world, it has over 7,000 employees and is winning new contracts all the time here in Australia at least (see ESG's recent drilling announcement).

It is cashflow positive, has reduced its debt but has substantially increased the number of shares on issue (as have BHP, CBA etc etc over the last 2 years yet alone over their corporate history and look what effect that had on their SP immediately after....the SP went back up)

It rsised A$756M at this level $2.70 ($0.27 pre cons, its market price was $0.45 on 14 Aug 2009 pre cons according to their presentations) in August 2009 and the market for their product has improved!

IMO, this stock has the ability to retrace at least to its pre-placement levels of $4.50, based on historical, comparable stock behaviours (see once again BHP and CBA), and ultimately surpassing these to reach its previous highs, it is merely a matter of timing!

In short, its a long term buy and hold, put them in the bottom drawer, they are not going to go broke now and are a solid business for the foreseeable future.

All the best