Short Term Trading Weekend Lounge: 19 - 21 August, page-187

STTCOMP TPP, FA Long

Australian mining services company

Market Cap 58m @ 29c, Cash 13.3m, EV $45m

TOU'd previous tip because market cap was off.

Two catalysts:

1. Recent purchase of Cablelogic for a song, this will expand their range of services and may provide cross promotion type entry opportunities but more importantly the increase in earnings should be worth significantly more on a PE valuation basis than the cost of the acquisition.

2. Half yearly results due out, cash receipts have been pretty good in the quarterlies and they have accumulated tax losses. A good half year NPAT figure could see increased interest on a PE basis.

Risk: a lot of their business is from one or two key contracts one of which is Gorgon. If one of these contracts was wound down then their earnings would suffer.