There is still more downside to come if you ask me, the building sector is still in the doldrums and there is not too many big projects on the go at the mo. Lets not forget the price collusion that these guys must still face, some hefty fines coming there way.
bottom picking implies value investing. And a critical component of value investing is NAV (the last 2 puffs of the cigarette as Buffet would say). Now it is very difficult to estimate NAV of a construction stock, compared to an asset heavy shipping company, for example. Yes they have a lot of cash - but that is misleading - as a lot of cash is tied up in warantee bonds, performance bonds, etc, so that cash is not actually free to draw on (I think!!). And they need the cash to commence a new project. So once they start chewing up their cash reserve - their ability to win big projects gets seriously effected. That is why ESR is a huge risky investment right now, for example. If you are going to pick a stock - pick a smaller player (less turnover needed to improve EPS), and pick a low PE one (because a recovery price is not factored in). BSR is my favourite - but I have fallen victim to news paper influence and hold stef stock as well.
I don't forsee a construction boom like the one we saw in the previous five year for many years to come. Why waste time on these shares anyway ? There are plenty of great shares just waiting to picked.
Indeed, but only in the private sector...not where the connected and entitled comrades are looting taxpayer funds at will...i.e. municipalitites, SOE's, govt. departments etc. etc. The rape of ordinary shareholders under the guise of so-called BEE also seem to go unnoticed...
it'll be ages (if ever) until we get another boom like we just saw .. but this is a cyclal sector and right now they right at the bottom and the top of even a more modest cycle is a nive profitable distance away ..
One does not see any upside in the short term (or even in the meduim term) for this industry. The only one in my book that was worth a punt was M&R mainly due to the knee jerk reaction to the loss that was announced due to impairments. The current numbers show their prospects were not worth the c20% drop in the share price.