I too am a little concerned but we need to remember revenue is forecast of $500 million for FY12 and this is highly likely to just be a market sell down. One large holder may have been selling yesterday, it was automated trading mostly so it might have been a fund manager rebalancing.
I think FGE dropped from $7 to $6 when the market knew second half earnings would be lower than first half. The market was right so that is the concern here, that the market knows something again, potentially margins are much tighter and lower now but who knows?
FGE has also not appointed a new CEO yet so may be struggling there and current management are meant to be leaving by years end. something to monitor.
At these prices CLO must be getting interested.
Yesterday ANG, MLD, GNG, DCG all underperformed the market so there may have been a switch from small cap mining service companies into larger players.
We have seen this happen before and there be no material reason for the sell off so good chance that is the case here.
FGE may have 100 million cash by 31/12/11. meaning the market cap is close to 240 million with a NPAT of 40-50 it is trading dirt cheap at present.
FGE Price at posting:
$4.10 Sentiment: Buy Disclosure: Held
