re: bad company How can a company fall so bad? Hmmmm - perhaps a...

re: bad company How can a company fall so bad? Hmmmm - perhaps a market correction where other stocks in the infrastructure services and contracting industries have also been hit quite hard?

Although, there have been some issues with this stock recently that i can't explain. Firstly, they said in their shareholder letter update that profit for the full year will "be in the vicinity of 10c EPS". That being the case, there are currently 3 broker forecasts out on PCG, and the problem is there's a big discrepancy between the high forecast of 11c EPS and the low forecast of 8.9c EPS. Usually, after receiving specific guidance from the company itself, there shouldn't be a 25% difference in broker forecasts, especially after receiving that guidance in May and the financial year ends on June 30th. That creates uncertainty, hence lower SP.

But, having given guidance of profits being around 10c EPS, PCG would need to make a market release if they expected a change greater than 10-15%. So, personally i think EPS will be in the mid 9's. On a P/E of 9, that still puts them at somewhere around 85c.

It'd be interesting to see the reasons why there are large differences in the brokers' forecasts, and so i recently asked PCG investor relations why they haven't posted the most recent batch of broker reports on their website, which is what they have done in the past. The response i got from Company Secretary Wil Cuperus was that they don't want to release the latest broker forecasts because they contain information about PCG which they don't want their competitors to know, e.g. which projects they're bidding on and how some negotiations are progressing. Whether you choose to believe that explanation is up to you.

Added to the uncertainty created by having varying broker guidance is the fact that HunterHall have bailed ship as a major shareholder.

Wait until the full year results are released and hopefully we'll be better for it.