A Brief History of PRG -, page-36

Thanks for posting that report Tamz.
They mention the things that drew me to the stock.
However doesn't seem like they are very switched on - the continually refer to how it is trading below net tangible assets which is not correct.
It's mainly goodwill and some of the goodwill appears that it should be impaired as the auditors noted.
This is actually a very important point which tells me they don't know how to analyse a business (I am just a dumb electrical engineer they should know better than I).
A company has inventory buildings various liabilities whatever. These are sort of necessary balance of plant, the engine room of a services business is the goodwill representing as it does the future earnings of the company.
By making this mistake it tells me they haven't formed their own independent view of what those future cashflows may be.
In this case it will turn out OK but elsewhere an asset value sleuth may find themselves with nothing but water.
Plant and equipment at cost doesn't get much as scrap.
On the other hand a company like MND has its goodwill valued at $1 (some nominal value) as it didn't grow by acquisition.
Your asset/NTA sleuth would bypass this opportunity.

Commodities have risen somewhat from their lows so producers like fortescue got a reprieve. BHP, S32 etc (not in time for Arrium).
For the companies which supply services to these producers it's a very different story - times are extremely tough.
It's fair to say the resources Capex boom is well and truly over.
I agree the leverage out there is scary and see prospects for a recession. That could lead to further production shut-ins.
PRG is also exposed to the domestic economy and thereby the housing bubble.
Basically I have the same thoughts as the directors of the company, I have NFI but I think flat revenues is a reasonable assumption.
In addition I don't think buying or selling stocks based on predictions of macro trends (especially those widely available) will enable your investments to outperform the market.
Don't think I can be smarter than the next guy at that game.
It will only be clear that the bottom is reached after the fact. Clear to you, me and Mr Market.
To get a bargain you have to buy when the "macro" tells you it's a bad idea but the price tells you it's a good idea.
A simple assumption that the world is not ending can be lucrative if it's based on reality.
I am a happy holder, if the price runs ahead of itself I will ditch a few but just based on stable revenues, cost out and historical margins $4 a share is still what I think it's worth over the long haul.
In the short term it will fluctuate.
Over the very long term it's profits will depend on the state of the Australian and Chinese economies.