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This must surely rate as a buy

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Check out the article below. BSR CEO is boasting R6bn in projects this year - that is almost R1bn increase in the topline from last year. With a PE of 4, no debt, R800bn in government spend over the next 4-5 years to be committed, Eskom $3bn loan for infrastructure, and a surprise package still sitting with TWP, BSR cannot surely get much cheaper than this. And it didn't even break a sweat in the downturn! http://jsefin.hosted.inet.co.za/news/story/6dff9401-29c2-4883-832c-2cc44a195290
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Super Contributor
I have been sitting on this share now for awhile, it has all the markings of a flyer, but I am running out of patience! Bollingers are tight it should break to the upside, I just want it to reach 1700!
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Well, this might all be true but the CEO in the results presentation also alluded to the fact that TWP's 2010 earnings are highly unpredictable. The ye orderbook was R8bn by the way and with 43% more shares in issue, I would prefer to wait for the July trading statement. BSR might well be cheap but that doesn't mean it is going to perform near-term. Also, the state has yet to find the R846bn they plan to spend over the next 3 years - at present, all I read about is delays in tender adjudication and procrastination, hence the market's indifference to the construction sector. The latter's earnings base is also quite high with recent profitability significantly above the long-term trend, hence the depressed ratings. Omo.
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Super Contributor
Tjop - Some CEO's are just better than others when they market their companies. Sometimes you just need to see things in context. Ask anyone who invested in first uranium, blue label etc. The construction industry is highly cyclical. They are at a low PE for a reason. Believe me that you don't know anything about this company that an analyst somewhere hasn't seen and extrapolated into future earnings, and the share price still remains under pressure. Why? The construction boom times are behind us.
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OK, so TWP is a large unknown, and may or may not suck revenue from BSR, we shall see. And share dilution and a high earnings base might explain the low PE. but BSR turns over R6bn vs R33bn for Aveng, so I reckon its growth is far more sustainable. If TWP turns profit (and it has always been profitable, from what I can see of its books) - it will be a windfall for BSR, if it posts a loss - well we will see what the exposure is. So far there have been no profit warnings. TWP posted around R160m profit in 2009, which didn't reflect in BSR's income. So even if they only break even this year, and BSR only makes money on their existing business, this looks good. If they maintain or grow profit - then BSR will really fly
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Super Contributor
Just looking at the 10 year chart of BSR and I can already tell that risk is to the downside.IMO
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New Contributor
Selling is slowly drying up and in any case whoever sells at this level is doing so at a loss. Patience, it won't be long now.
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