I cannot see any reason for the SP of NWH to bounce from today's...

I cannot see any reason for the SP of NWH to bounce from today's closing price. I can only see the SP dropping further - maybe we will shortly see it at 25c. I do not currently hold NWH as I sold out in Jan 2014 averaging $1.24. I also am not a shorter - don't know how that works! I do know that the number of 'shorts' has doubled in the last month. I have been watching from the sidelines and waiting for a turn in NWH fortunes and an opportunity to buy back in. I can't see the likelihood of any rally in the SP for possibly 12-24 months or more.

I wrote back on 18th. June (see below) when the SP was 93.5c and spot iron ore was US$89.30. We now have a SP of 48c and spot iron ore @ US$70.

"The share price of NWH is caught in a web not necessarily of its own making.

Breaking out of that web is not going to be easy and will take time. Shareholders need to continue to be patient as even sound (should I say satisfactory) trading results at next update announcement are not going to be enough to jolt the SP. Maybe a small lift for a few days.

The problem faced by NWH is all the negative news - the iron price, the projected iron ore glut, the slide in share price by the iron ore majors, deferring of capital expenditure, the sluggish overall sharemarket, industry sentiment etc. etc.

We can say that NWH isn't directly affected, that NWH is not an iron ore miner, NWH is a specialist in its field, is a proven performer or whatever, but the crux of the issue is that NWH is surrounded by negatives which it cannot control and I expect are going to persist (and impact) for the next couple of years.

The iron ore problems won't be overcome in the short term. As we move forward we can expect to see the miners possibly undercutting or discounting one another to clear their ore (reports already exist that FMG is doing this). Production is increasing just as the ore price is decreasing. Not a good recipe. Some miners may need to cease production completely as they become unprofitable and those with high costs that persist may not survive.

The upshot of this for NWH is that there will be less opportunities to gain new contracts as miners scale back on their expenditure (especially new contracts). The miners will be looking to contain costs across the board.

Add to this the fact that competitors to NWH will be trimming their margins when quoting for new business and NWH will be quoting against this backdrop. Not to quote (or not to trim margins) could mean no new contracts and a substantial pullback in gross annual revenue......
The trends of the miners (especially those besides RIO and BHP) are being replicated by those companies on the periphery.
- Prices as at 1st. Jan 2014, 18th. June 2014 and today (in bold)
AGO 1.15, 0.63, (now 20.5c - down 82% this year)
FMG 5.90, 4.02, (now $2.81 - down 52% this year))
BHP 37.35, 35.28, (now $32.10 - down 14% this year)
RIO 66.94, 57.90, (now $57.41 - down 14% this year)
BCI 5.25, 3.03, (now 57c - down 89% this year)

NWH 1.37, 0.94, (now 48c - down 64% this year)
BKN 6.03, 3.49, (now $3.81 after reaching $5 in August - down 36% this year)
MND 18.60, 15.60, (now $9.61 - down 48% this year)
ORI 23.39, 19.01, (now $18.38 - down 21% this year)
Also added -
TTN 2.47, 1.93, now 30c - down 87% this year)

In summary I see the SP of NWH as going nowhere fast. We can say that some of the above figures and companies have nothing to do with NWH, and that is my point. Despite that they are still impacting. To see the SP of NWH jump and turnaround significantly will require exceptional trading results, not just something a bit similar to (or marginally better than) the last announcement. I can't see that happening anytime soon.....
The signs for me are all pointing in the wrong direction so am avoiding and now can't see things improving for several years."

The SP of MND took a tumble of over 9% today which appears to be a reaction in sympathy with the NWH press release, and supports my comments above - neagative news affects those companies on the periphery.
The issues for now, as I see them are -
- A slowing revenue stream
- Likely asset impairment charge of around $50M this year
- Lower revenue for 2015 vs 2014
- Deterioration in projections since last guidance given 20th. August 2014 (only 3 months ago)
- An apparent dispute with client Samsung relating to Roy Hill project
- A possibility that future dividend(s) will be withdrawn
- NP after tax and abnormals for the 2014/15 year could be a loss
- continued negative sentiment towards the mining services sector as well as the mining sector
- The flow-on impact of miners looking to cut costs at every opportunity
- Indication is that there are limited new major contract opportunities
The big WHAT IF for me at present is - "What if a mining services company becomes insolvent, or some of the small miners don't survive - what impact will that have on the SP of NWH?"
There isn't any positive news for NWH at present and dare I say it, I am expecting the SP to lose further ground in the short term - possibly back to around 25c. As for MND it is also unlikely to maintain it's current SP and a similar 50% drop there is also a possibility.

DYOR - I am not a licensed investment advisor