The danger is in getting carried away with how cheap these things are... they are not GREAT companies - just cheap at the moment. So... I need to curb my enthusiasm. Same applies to all of the other ZAR stocks... where will the Rand be in x years time. Timing is a B! Just ask Donald!
The order book is what you need to be paying attention to with this lot. Traditionally the order book used to be 4 to 5 times bigger than their revenues (it takes a couple of years to conclude the work, and invoice against it). Now their order book is basically matching their topline. Which means at best, you are betting on Stefstocks being able to win new contracts AND execute existing contracts at margin. With their order book and margin still declining, you are 0 for 2 in your assumptions here ... The only construction stock making money (and growing) is WBHO. This is my pick, and on the recent pullback, I have taken a position.
Trying to time a cyclical bottom. Look what happened the last time people bought against full order books. As I said "not great companies" just interesting from a Nav perspective in a world that may need to look at investment to encourage activity (public works programmes.)
Incidentally - these order books have been improving year-on-year pretty much for the last 7 years - even in this foul environment. There has been a sort of a stealth recovery in this sector. I can't remember order books filled for 4 years - sure the odd long term project carry-over but not 4 years of current turnover.
I bought a fair amount in March to add to my long term holdings as well as a nice parcel on CFDs, the latter showing a healthy profit having bought at lowest 351 and highest 360. This time I'm going to hold on, having ditched my AEG far too early, so more than happy to pay the interest in the meantime. I feel SSK offers far more value than say WBO, as I'm prepared to bet SSK will get to 1000 before WBO gets to 33000. No construction company wants to be sitting with an order book of 4 times revenue when you at the bottom or near the bottom of a cycle, an 18 month order book is ideal. Been in this game long enough to know that. Are we at the bottom?, I don't think so, but don't think it will get any worse.