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Ann: Response to ASX Aware Query, page-9

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McDuff

4,385 Posts.

04/12/15

18:11

Post #: 16549853
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Originally posted by DSD ↑

Oops... seems SPO got too cocky and lost a major contract with a large mine. Wonder which firm snatched it from them?

Plus some of the acquisitions are duds and probably barely breaking even. Suspect the air-con outfit is one of them. SPO will learn from these mistakes but at the expense of shareholders. Will management take a pay cut for being too casual? Somehow i doubt it.

So 1HFY16 will be a shocker but things considerably better in 2H. Overall, FY EPS will fall 10% to 11.7c. Div for FY16 will total about 4.9c unfr.

Hence, at $1.24 PE ratio of 10.6 and div of 4%.

So what is SPO worth? Clime have hammered their IVs down to Fy16 $1.36, FY17 $1.41. At least they expect an increase as things improve.

Clime are very conservative esp with companies carrying high debt levels. I'm sticking with my own estimates and have FY17 IV at $1.58.... so using Aug 2017 as my date that's a 27.4% increase in under 9 months excluding divs.

The numerous long (very) term contracts combined with zero pressure on wages provide comfort. IMO SPO has been oversold. We know who's shorting, but anyone on HC buy today? I certainly topped up at $1.254av.

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...loaded up in the same range- should bounce from here

SPO Price at posting: $1.24 Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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