Mining services is hot, theres no doubt about that, and growth will continue for the forseeable future with China and India gobbling up resources at incredible rates.
One mining services stock has been a laggard in terms of its shareprice performance due to the company embarking on a period of book carrying value writeoffs. That's over now and CHL (CCI Holdings) is making up for lost time in no uncertain fashion. It has quickly moved to become the best performer in this star sector over the last 12 months, yet is still priced much more cheaply than it's peers and looks set to continue it's strong outperformance for a while yet.
over the past 12 months CHL +164%, WOR +163%, CPB +77%, BKN +74%,UGL +41%, TSE +18%, XAO +15%.
CHL in a shareholder update reported it expects NPAT of 3.3M for 05/06. This places the stock on a P/E of just 13.6 times 05/06 earnings. and the good news is their strongest growth is still ahead as all the coal ports lift capacity with CHL being paid for their coal testing services on a per tonne basis.
Consensus points towards 06/07 earnings of 4cps+ putting the stock on a single digit forecat P/E ratio. No wonder CPB is trying to take the company over. This takeover activity ads a bit of spice to the mixture with the likelihood CPB will make a higher bid after their 31cps offer was seeen to be well off the pace.
Don't procrastinate tho, this one is on the move in a big way.
CHL Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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