d_r notes: " I see a number of the stocks you are interested in...

d_r notes: " I see a number of the stocks you are interested in are engineering/mining services companies. Whilst some people have made a lot of money in that sector, I have a bias towards avoiding the sector given the nature of contracting (i.e. a bad contract can have a big impact) and also concerns about the sustainability of the current mining boom and commensurate CAPEX spend. I wont forget how quickly CAPEX spend evaporated during the GFC with many share prices of the pick and shovel companies falling off a cliff as a result."

MM> I absolutely concur. I had doubts about boom in 06=07 period and avoided buying mining stks. In fact didn't have any long stks. But in 2008 when collapse platued and recovery appeared imminent i decided to buy mining service companies. My thinking was that they will make money even if the mines are unprofitable. BUT i bought the wrong sector within mining services. I plumbed for MAH, SDM, LEI, etc. They were all CONTRACTORs. hence, they had large contracts that had strict time lines, quantaties of ore produced etc. They bought masses of equipment but many (esp MAH) made a meal in their calculations and ended up losing money.
This time i have chosen companies that :
1) sell consumerbles to industry. These are chemicals such as drilling fluids for lubriction, flux for metal fusion testing etc.
2) manufacture products to mining industry. eg. XFR sell spectrometors and funaces, CDA sells metal detetctors and communication equipment, LGD similar.
3) BOL leases cranes. With contruction very subdued they are targetting mines. They simply provided a crane and driver and rent at huge daily rate. If update is high... income ppours in. Of course vica-versa applies should mines stop requiring cranes.
4) hence, BSA is the only pure contractor as such. Yes the macro is hazy although they have large bookings for FY12 about 40% is a single hospital in Perth. HST oes similar wk and is in strife.
All have PE below 10 and most will pay 9-12% divs incl. franking credits. zI would love to own a fe others but mkt has discovered these and prices have leaped.

I wish i could understand mkt for BGL's products better. Being wireless.... why can't householdrs use their internet service? Must say the margins on BGL's businesses are fabulous.