In previous post (COF v CDD) i emphahsised the exceptional macro...

In previous post (COF v CDD) i emphahsised the exceptional macro situation facing CDD. In March this year CDD aquired a US engineering consultancy that specialises in oil pollution. Then a fortnight later the Horizon well blew and massive damage incurred. I have read that Obama's office chose this same US to report back to the cabinet how work was progressing re the clean-up. Because i haven't re-read this titbit i didn't mention it in earlier posts. That aside, i wrote that BP is facing a *+Billion bill and CDD are on the ground doing their part of this monster job. This was confiremed weeks later in CDD's annual report although not much detail was provided. Yet mkt continued to ignore this hugely advantageous position for CDD.
Today we read CDD expects earnings for 1HFY11 to jump 885 (81-93). Using the 30m midpoint equates to 60m profit for FY11. However, CDD caution the 'high rate of work from Mexican gulf will not continue at same level during 2H11'. Then CEO adds, "However mkt conditions across the rest of the business continue to improve". CDD are not shy in announcing sucess, but they consistently underestimate their future earnings in prior forecasts. Underpromise... over deliver. And the pay fat divs. Compared with MND CDD remains waaaaay underpriced. 60m NPAT=PE 8.9 with SP of 5.10. At $4.60 fwd PE=8.08! Firm has low debt and strong track record. My new target: $5.10 and interim div of 20c (prev 14c) in Feb ann. Could well see 40c divs for full yr FY11. BUY imo.