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Top Gainer: Ausdrill (ASL)

 Closing price  $3.38
 Change  +0.18
 % change  +5.6%

 

ASL, as has been the case with many mining services stocks, has boomed over the past year, rising a whopping 82.86% for the past 12 months after today’s 5.6% rise.

As reported earlier this month on TheBull PREMIUM, and in an article “Mining Services Stocks Leveraged to the Mining Boom” in February on TheBull, and in 18 Share Tips on March 21st, brokers and funds have been jumping on board – which can’t have hurt the company’s share price.

On May 17, Invesco became a 5% shareholder of Ausdrill – the Invesco Smaller Companies Fund is overweight in a diverse pool of securities, led by mining services company Ausdrill Ltd (ASL). This appears to have been a good move, as JP Morgan and RBS Australia both initiated coverage of Ausdrill in May with buy ratings. The company is heavily focused on the gold and iron ore mining industries. JP Morgan, which expects a recent equity raising to enable additional capital investment, targeted the company’s share price at $4.17. This brings the consensus target up to $3.99. RBS noted that 65% of the company’s revenues come from customers at the production stage, protecting ASL against price volatility.

“Ausdrill’s business has experienced strong growth in recent years and, assuming continued strength in the resources sector, Ausdrill anticipates a high level of tender activity in the next 12 months,” the company said in April in anticipation of the equity raising. RBS forecasts 13-16% revenue growth across FY12-FY12; JP Morgan expects earnings per share to grow 20% in FY12.

Graeme Carson, Senior Industrial Analyst for Patersons, said that Ausdrill “expected to report a solid interim earnings result later this month following renegotiation of some key contracts previously operated by Brandrill as well as an earlier recommencement of exploration drilling operations in the New Year due to high demand.” Carson added, “The company is well and truly emerging as a dominant force in Australian and African contract mining services and the growth outlook is underpinned by the gold and iron ore-dominated order book.”.

Hamza Habib, Patersons Securities also has a BUY on ASL, pointing out that this diversified mining and services company reported a 71.7 per cent increase in interim 2011 earnings on the previous corresponding period. “Management has increased earnings guidance and expects to provide the market with positive news flow regarding new contract wins moving forward,” says Bigwood. “ASL’s African business exposure has been strengthened by its strategic alliance with Barminco, which is expected to grow the company’s revenue during the next two years.”

Based on Thomson Reuters data, 100% of analysts have a buy on ASL with a total of eight analysts covering the stock. This is compared to 100% with buys from four analysts three months ago. 

 

Chart: Share price over the year to 23/06/2011 versus ASX200 (XJO)

Stock code: ASL

Charts: Ausdrill Limited

More news: Ausdrill Limited

 

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Biggest Loser: APA Group (APA)

 Closing price  $3.95
 Change  -0.42
 % change  -9.6%

 

After hitting its highest level since 2006 this week, APA Group was the day’s biggest loser, tumbling 9.6% to $3.95. 

APA is made up of the Australian Pipeline Trust and APT Investment Trust, which together own Australia’s largest natural gas distribution and storage infrastructure network.

APA seemed to have been in the news for all the right reasons over the past week, with its $171m purchase of the 80 megawatt Emu Downs wind farm in WA, and a $300m equity raising to fund the purchase and further capital expenditure until the end of next year.

However today’s 10% beating of the share price after it came out of a trading halt shows that investors were not impressed, with many running for the door.

Major shareholder is Petronas Australia. P/E ratio is 19.4.

Based on Thomson Reuters data, 23% of analysts have a buy on APA, 62% have a hold, 15% have a sell, compared to three months ago when 33.3% had buys, 58.3% had holds and 8.3% had a sell. 

 

Chart: Share price over the year to 23/06/2011 versus ASX200 (XJO)

Stock code: APA

Charts: APA Group Limited

More news: APA Group Limited