MND – Macquarie rates as Neutral

Macquarie now forecasts a -16% decline in the company’s FY19 construction revenue, given the low level of wins this year and the time lag for new work flowing through to revenue. The Ichthys work should largely be completed by June 30 and the focus is now on the replacement of around $300m in revenue run-off in FY19.

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The Bellwether Resource Service Stock

Monodelphous Group Limited (ASX: MND) is the bellwether company for the Australian resource service sector.  After seeing the MND share price decline 80 per cent from $28.50 to $5.50 in the three years to early-2016, it has more than doubled this year, indicating investors appetite to switch into cyclical stocks as the expectation for resource projects proceeding has increased with the recovery in commodity prices.

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Monadelphous: Leader Of The Pack?

Sometimes it’s easy to identify the source of competitive advantage that drives the performance of a great business. For example, it may be intellectual property supported by large R&D investments in the case of companies like Resmed or Cochlear; it may be network effects and a dominant market position in the case of businesses like REA Group or Carsales; or it may be ownership of long life, very low cost resources for a mining company.

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