Yep, the macro is interesting.It is still supply chains,...

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DefinedBenefit0

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15/09/22

11:47

Post #: 63714247
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Originally posted by Ahf1995: ↑

Thanks for your input Defined

We are well positioned as a company to benefit from supply deficits across our commodity exposures. Clearly this is a positive for equipment utilization rates as more resource needs to be supplied to the market over the coming years. This is only going to get worse over the short term with the European energy crisis which is causing producers to shut down operations for an indefinite period of time. This adds to the defecit and shifts the procurement to stable geographies with base energy such as Australia.

From a firm specific perspective DDH outperforms counterparts on quality & capital structure while at the same time being cheaper. Over the medium term I see a valuation mean reversion to its counterparts as perceived risk abates and earnings continue to expand. Lastly management and founders are strongly aligned with the appropriate incentives. Ex founders appear to have conviction having not sold down their position in the company which I take comfort in.

In the short term I suspect there will be further accumulation opportunities as commodities and associated services get sold off from demand destruction fears and tightening capital markets.

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Yep, the macro is interesting.

It is still supply chains, Ukraine, wage claims and strikes, long covid and etc.

I cannot type Ukraine though without pausing to think of these brave people. Slava Ukraini.

Unemployment up today, slightly. Actually good news in a condition of full employment- with overall employment up and participation rates ditto. Some spare capacity emerging?

Who knows. Keep close to fundamentals and balance sheets. The lower dollar will help our clients. But cost of US capital will be higher.

IMHO DYOR

DDH Price at posting: 86.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Yep, the macro is interesting.It is still supply chains,...

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