re: Ann: LLC: Lend Lease awarded NBN contract...
Caribou, like you I think SSM is undervalued, although I still want to buy them under 25 cents. I made a lot of money on these guys buying the last round at 26 to 28 cents and selling around 56 to 60 cents. I sold because of the fact their founder left NBN management, and I took that as a signal that NBN was not going to be quick or easy for anyone. Now SSM is starting to look like that bad news is built into the price and it is getting time to reload.
What major contract expirations do they have in the next 18 months? What are their prospects for renewal on those major contracts?
I acknowledge that this is a cyclical business to some degree, and they live and die by contract renewals in a competitive environment. At the same time, one senses that by reputation alone they have earned some small competitive advantage, and they are not winning contracts on price alone. Obviously their super low margins suggest they also do not have much price authority. But they seem to have a very stable cost structure, as long as they can win the contracts.
For next three years, NBN seems likely to keep feeding them well.
SSM Price at posting:
28.2¢ Sentiment: LT Buy Disclosure: Not Held
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