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When it was sub 48p it was screaming out as a 100% er. It's still a very very comfortable 130-140p+ imo, might have some top slicers at 96 area inc myself but that gain remaining should appeal with a new base of investors at 67p looking for that 100%. Oct 23 was exceptionally confusing to me, you could buy this for below net cash but zero interest, as with many i go into i couldn't get anyone i know to take any notice of this "poor low margin, accident-prone, dull business" was all i got.
Mulder, I'm heavily invested here and I know the company and sector well. In 2017 they made £39m, had £178m nett cash, bunged the pension £8.9m, divi £15.1m and the market cap with all of that was circa £464m. So about double current. No one was saying at the time that the MC was way too low... So 160 a share all day long, but 400? What would drive that exactly? Cant see it but I hope you are somehow correct as that would see me out!
GL
Playtowin a better method is to take net asset value and knock off the bullsh*t (goodwill and pension scheme) which leaves the business valued at c.£125. With mkt cap of £225m it is still a strong buy as clearly it is generating much more cash than profit which is another buy signal in the contracting domain
My only grievance is I hate it when contracting companies hide behind weekly or monthly cash balances. Just tell us the average daily so we know you are not cherry-picking the day before the payment runs or after the receipts!
It is probably better just saying that if you are presently valued at £225Million and you have £164 Million in cash and possibly more now, then the difference between the two of £81 Million is not a lot of valuation for a company that made £40.1 operating profit at last full year results.
Earnings are not cash. There is no such ting as a "cash adjusted P/E".
I'll give you a clue.
Work out the cash adjusted P/E.
Go on then!
One could easily make a case for the SP being 5x what it is today.
A contract with Thames Water. Aaaaaaaagh!
And a nice one at that with what looks like 3 contract wins over recent weeks that we weren't aware of
· Thames Water: award of a Design and Build contract to upgrade two strategic water treatment assets in Berkshire and Hampshire;
· Transport for London (TfL): two major road refurbishment projects at Gallows Corner Flyover and Brent Cross Interchange; and
· Two new framework contracts in the nuclear energy sector.
And the weekly cash position year on year is also vastly improved.
Happy to keep holding and adding as the present Management team are adept and with so much cash and so many Private equity takeover deals being announced in recent days and weeks COST could well receive a bid itself.
I wasn't expecting the drop but happy to buy a chunk on the drop. I've seen this before with Costain before it eventually ticks back up
On todays dip.
To be honest I didn't think we would see 77p and 78p again.
Too much going on and oodles of cash on the balance sheet.
LONDON - (Sharecast News) - London stocks looked set for a positive open on Monday after closing at another record high at the end of last week.
The FTSE 100 was called to open around 50 points higher. . .
Brokers trade history bit of a mess with the non tradable / rights in out in out .
Mistake with numbers sold 80 more then planned, eating into previous buy a little.
Sold before at 83p on 28/5/2020 must of been to fund the rights non tradeable booked 21/5/2020
Sold a tranche at 84p up 5.33% up today .
PS 'The Naked Trader' also bought shares in Costain Plc (on 10th January 2024) and his position remains open; so he clearly sees no need to sell any of his holding yet either. Nice signs all round. . .
As I bought another 10,000 shares yesterday morning, following the Sunday Times Tip posted here (so a big thank you to Roguemale1 for sharing it, as I had not noticed it myself).
I just thought that it has now been tipped [very recently], by Investors Chronicle, The Daily Telegraph and now The Sunday Times (plus, but to a much less serious extent, Motley Fool!!), so it might be prudent to follow their lead and buy more! So I did!
Not one for being smug or complacent myself, but at present, I am feeling that we might well be at the start of a nice
£1+ journey this year. . . ATB
It's breaking out big time
Its nice to see it breaking through the 80p barrier. Just needs to hold it and build further confidence.
And these guys today .
Above 79p today.
https://www.fool.co.uk/2024/04/22/2-overlooked-cheap-shares-im-tipping-to-eventually-soar/
Some say theirs the kiss of death .
I have had these years .
Above the rights 9 /7/20 @ 62p
Chris_Magpie - Thanks for the headsup re social housing development. Might have confused an article I read with Vistry..
Thanks very much Roguemale1 for this. . .
I also found this very truncated version:
"The Sunday Times's Lucy Tobin judged construction and engineering group Costain's shares to be a 'buy. Yes, the outfit was "vulnerable to "the ebbs and flows of contract-awarding mandarins," she said. But over four-fifths of its sales for the current year had already been booked and according to its boss, Alex Vaughan, the value of that was nearly three times 2023's earnings.
The company had also "dramatically" cut its pension fund contributions. Furthermore, the shares were trading on just five times earnings for 2024. There was also a relatively small difference between its £164m of net cash on hand and its £217m market cap. Tobin said that was proof of the shares' good value". END
I'm still on hard copy! But with thanks to someuwin across the road.
The City has noticed, to an extent: Kier and Costain’s shares are 20 per cent higher than at the start of the year; Balfour Beatty and Galliford Try are up about 7 per cent. But they’re still a long way from their past peaks. Costain, for example, is now trading at 75p, less than half its pre-pandemic share price of 194p, while back in May 2019, its shares changed hands for £3. Since then, the firm, founded in Liverpool in 1865 has been punished for booking expensive charges for badly priced energy and road contracts, and diluted by a £100 million rights issue at the start of the pandemic, required to secure the balance sheet.
But Costain is a vastly improved outfit from the housebuilder it was long ago. It has been transformed into an infrastructure contractor with tentacles in many a sector. It works with most of the major water suppliers on pollution-kerbing upgrades, with National Highways, Transport for London and National Rail, on the government’s contracts to decommission first-generation nuclear sites, and in defence. Costain looks poised to benefit from the UK’s likely Labour-led investment in more infrastructure projects. As Joe Brent, head of research at Liberum, explained: “We are optimistic about the outlook for infrastructure and believe Costain is the purest trade on this theme.”
Last month, the firm posted a 10.5 per cent rise in adjusted operating profit to £40 million for 2023. This year, more than 80 per cent of its revenues have already been booked. Chief executive Alex Vaughan pointed out that the value of this is about three times last year’s earnings. This confidence helped Costain bring back its annual dividend. Its cashflow is smoother due to recent cost-cutting tinkering: for example, its pension fund contributions were dramatically slashed following a review last year. Net cash stands stronger at £164 million, from £124 million a year ago. The relatively small gap between those cash reserves and Costain’s £217 million market capitalisation hammers home its good value.
Of course, the firm remains vulnerable to the ebbs and flows of contract-awarding mandarins, as has been seen with HS2. But analysts predict its pre-tax profit will exceed £52 million next year, and Costain’s shares are trading on just five times earnings for this year. It has a packed order book of blue-chip customers and has rebuilt its reputation: Buy Costain."
Roguemale1 - Are you able to paraphrase the article at all, as a link won't work for us 'non-subscribers'!?
I'd be very keen to the rationale for the recommendation. . . .ATB