"Its good to see how Swick's interim and annual reports have...

"Its good to see how Swick's interim and annual reports have vastly improved from a few years ago. today they are far more detailed with commentary on how each part of the business is developing. In addition shareholders have intermittent updates in the form of an IV. Yet the SP continues to fall and fall. Shareholders who were believers in SWK's turnaround have become nervous. Many have left with substantial losses. Yet my take is that things are going pretty well at SWK. Raises the question: What can SWK do to support the SP? IMO it's too early to do a buyback, although in 2HFY13 if SP is below 30c I would be supportive of such a move. Instead i feel SWK should provide even more detail to the market clearly espousing the inherent strength of the business.

We have a situation (similar to late 2008) where mining service stks are being hammered. Even good news only seems to moderate the speed of the fall. My take from the latest update is:
a) Manufacturing the drilling machines has become substantially more efficient. Recent improvements will allow machines to be produced more cheaply and that is obviously a big positive.
b) The machines themselves are superior and deliver more production to the mine. In a competitive environment where mining costs have escalated, improved efficiency/production will be of significant benefit to the mine owners. I'm sure SWK use this as a selling tool.
c) Increased automation will hopefully see drills become manned by a single operator... another powerful attraction for mines. This will increase margins substantially.
d) Overall, it seems margins are being improved, albeit incrementally.

It seems that the mkt is simply classing all drilling enterprises together. it's well known that exploration drilling has come off the boil and more decreases are expected. fortunately SWK anticipated as much and have largely focused on UG drilling of narrow vein gold mines. (as an aside i wonder if Medusa use SWK?) UG exploration is specialised and margins are better than on surface. SWK have emphasised this point but it seems unheard.

What more can SWK do? What i'd like to see in the annual report is:
1) What is ROE of business. has it improved from PCP and 1HFY12?
2) How long does it take to pay-back the capital cost of each machine? Is it 12-18months or 24-30months of work?
3) More details on margins. One can do this without showing competitors too much. BLY always include stats re margins.
4) CEO has conceded N.America not doing as well as hoped. But let's give another 12 months before pulling plug. Just a suggestion.
5) Who are our competitors? IMD for example list theirs and one can do research on these companies if desired.
6) Info re Operating Cash Flow. How much and compare with PCP.
7) ROCE.
I could go on. But essentially one cannot give shareholders/general market too much info. Make it easy for these chumps who describe themselves as analysts. My sense is that SWK is substantially undervalued. The massive reduction in debt is esp pleasing. I'm expecting a final div of 0.6c with promise of more to come in FY13. Some of us have held from dark days of $1.30. We deserve to get some earnings back. All-in-all I'm looking forward to the results. I'm expecting it will please shareholders and market in general." BUY now imo.