Eddy2 Aug 2011 02:38
It is looking rather attractive!
All I can say from eyeballing the L2 on this for 3 days solid is that this PM was the first time that I saw a reasonable amount of Ordinary trades going through as people started to think likewise after the 227p "bounce" - up til then, apart from what looked like pretty big shorts going in at 370p (which I reckon closed today at 330p), it's all been Automated trading with absolutely f-all support from the bid side which totally collapsed as is obvious by the SP fall!
The bid volume on the book came back today and, at one point, was 1.5:1 against the ask which is a clear sign of interest returning so if this isn't the bottom (tho I reckon it probably is) then it's probably here or hereabouts ...
We're now back to about 5% below the level at which KFX took off spectacularly in February so you've gotta be seeing value here being sensible?
The "bad news" in the trading update was simply that they're not going to hit their year-on-year target of 14% organic growth due to a slower sales cycle - hardly surprising given the state of the world economy at the mo methinks! What's to argue about is how far they're going to fall short of that 14% and listening to the conference call the other day, it sounds like they're going to come in at around 8-9% growth or so (my guess) - their guy gave pretty short shrift to the suggestion that it would be as low as 5%.
They've not secured some govt deals that they were hoping to get but again, their guy on the call was at pains to explain that these aren't deals LOST to competitors but simply deals where a decision was hoped to have been made by now but were delayed by those govt depts. Again, given the world economy, and sovereign debt issues in particular, I hardly think it a big shock to hear that govt depts are delaying procurement!!
A long-term TA straight-line going back to a couple of years ago suggests that the bottom of the SP now should be around 390p (note that it closed at 393p the other day as "people" decided which way it was going to be taken) so I think it's perfectly possible that this bounces back to, say, 360p very soon (maybe even in just a day or two) and finds itself drifting back towards 390p over the next week or two ...
GLA!
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