According to Geoff Knox, Downer has no liability to any loss made by Reliance Rail. He reckons any loss there will be sorted out by the owners (Downer and the NSW Government) through refinancing with the banks, renegotiating the Waratah service contract and getting NSW to pay a bit more for its trains.
If Reliance can make a profit out of servicing the Waratah fleet and other trains it can pay of its loans and be in the money within 2 or 3 years. So what's the problem? Nothing!
If you know Downer and look at the monthly chart you would know this sort of thing happens to Downer all the time (every 4 mth). Its a real trader's stock. The only question to be asked is where's the bottom this time?
Certain 50 - 100% gain to be made from the bounce.
DOW Price at posting:
$4.16 Sentiment: Buy Disclosure: Held
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