Australia's main coal testing, non destructive testing and hydraulics service provider CCI Holdings is now emerging into a strong 5 year growth phase after 2004/5 saw large accounting writeoffs place the stock in the "ugly" basket.
Things are very different now. After a strong 05/06 FY, the company is predicting EPS of 3.5c for the current 06/07 FY, and just announced it's results for August were a record for the company. at 35c the stock is only trading at 10 times current FY earnings, and the company has also flagged it expects f years of strong growth out to 2011.
the company is generating buckets of cash, (operating cashflow was 7.7M or 5.8cps in 2006), and will only get stronger as coal volumes ramp up steeply over the next few years.
The company will pay a 1c ff dividend in Nov, and is very likely to repeat the dose as an interim dividend in Mar/Apr.
This stock trades in the very lucrative coal mining services sector, but is still priced very cheaply when you consider most of the peer stocks in this sector are trading at multiples of 15-20 times earnings. This is a small company which has been overlooked by the analysts, but is an exciting vehicle which will be driving to higher profits and cashflows for the LT.
CHL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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