Boart, the world’s largest drilling contractor, has significantly improved its operational efficiency and, although the company remains a cyclical, we believe it is a better business today than in the previous up-cycle. We believe improved operating efficiency has improved operating leverage and, therefore, the likelihood of margin expansion. With circa 75% of revenue from non Asia-Pacific regions BLY is well positioned to benefit from the increasing exploration spend being driven out of Africa and South America. Trading at less than 6X FY12 EPS, a dividend yield of 5% and a strong balance sheet (net interest cover of 14X) BLY is quite simply cheap.
Target Price: $4.90 P/E: 5.2
BLY Price at posting:
$3.05 Sentiment: None Disclosure: Not Held
