EEEmeco Holdings, Ltd.
0.5406USDD
+0.0506+10.33%
At close at Jul 23, 18:52 GMT
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$EHL $EHL.ASX its shaping and may go higher from here$EHL $EHL.ASX its shaping and may go higher from here
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Emeco grows on diversification
Emeco Holdings (ASX: EHL) increased its 2020 financial year revenue 16 per cent to $540m, and boosted its net profit 39 per cent to $87.5m, it said in its results presentation.
“Iron ore revenue more than tripled and gold revenue more than doubled,” said the company, which is seeking to diversify its business that was mostly focused on coal.
Coal mining companies provided 49 per cent of Emeco’s group revenue in the June quarter, down from 65 per cent in the 2019 financial year, it said.
Growth for Emeco is coming through new iron ore and gold projects in WA to replace legacy mines, while in eastern Australia customers are looking for cost effective services amid lower coal prices.
The company recently expanded its range of services with the acquisition of WA-based underground mining equipment provider Pit N Portal and is using data analytics to increase equipment efficiency.
$EHL - EMECO - Will it break and run?Not the sort of stock pattern I would buy or hold but might be of interest for others. It's having a 3rd crack at resistance and had a good run earlier (which I would have bought in to) so it might be finding its feet again. Paradice have bought in and increased their position to around 9% so that could be a good sign. Might be worth a watch as plenty of upside to historical levels if it breaks and runs.
About Emeco
Emeco Holdings Limited (Emeco) provides heavy earthmoving equipment rental solutions to mining companies and contractors. The Company's segments include Australia, Canada and Chile. The Australia segment provides a range of earthmoving equipment and maintenance services to customers in Australia. The Canada segment provides a range of earthmoving equipment and maintenance services to customers primarily in Canada. The Chile segment provides a range of earthmoving equipment and maintenance services to customers in Chile. Its rental fleet includes Caterpillar and Komatsu rear dump trucks of 50 to 240 tons; Komatsu, Hitachi, Liebherr and Caterpillar excavators of 40 to 400 tons; Caterpillar articulated trucks of 30 to 40 tons; Caterpillar dozers of D8 to D11; Caterpillar and Komatsu loaders of 966 to 994H; Caterpillar graders of 14H to 24M, and ancillary equipment, including water carts, service trucks, compactors, integrated tool carriers and tire handlers.
Buy EHL Due to oversee market the ASX200 should be pointing higher this morning. This is why i'm looking to buy EHL, it has formed a bearish hammer on support and with the Elliot wave theory its on C wave. With EMA on the daily chart, the 13 and 50 EMA its on downward trend same with the MACD. Same goes with the weekly chart, therefore we go see a bounce off on this level.
Emeco Holding - Go Long ! Increased Mobile Fleet Utilization Emeco is looking cheap at the moment with increasing Mobile Fleet Utilisation and Increasing bidding work in 2019. Owner operators looking to increase production are now more capital sensitive and will opt to hire fleets, as opposed to purchasing new equipment. This makes Emeco attractive in a sector that has undergone significant consolidation.
-Margins have also improved from 30% to 40% over the course of 2018
-Risks as always are commodity price down turns
-Important to also note that Fleets age and will need to be replaced, Owner operators in these instances may choose to hire instead
Fundamentals
P/E Ratio 26.28 (a little on the high side, but potential exists)
EPS $0.09
Earnings Growth --
Debt to Equity 304.50% (Risk is changes in interest rates, this could impact bottomline, however US Fed and RBA have signaled slow rise in interest rates)
Price to Book 4.48
Beta 1.18
Outlook
We are continuing to see high levels of activity and demand for fleet from our customers. We expect our fleet’s
operating utilisation to further increase throughout FY19, particularly in the second half.
The eastern region mining markets remain very strong, particularly in coal. We have actually transferred a few
assets from the west to the east in response to this strong immediate demand. Our national footprint gives us
the ability to mobilise fleet to where demand and returns are the strongest.
The western region utilisation is not as strong as the eastern region, hence the transfer of assets, however
there is a lot of bidding activity for projects commencing in the new calendar year. We are confident utilisation
rates in the west will significantly increase through calendar 2019.
Contract tenures are extending out, with two to three year terms becoming more common. To me, this is an
indication of the high confidence of our customers. Customers are taking a more cautious approach to capital
investment in mobile fleet and see Emeco’s rental offering as a favourable alternative. We expect this to result
in strong sustained demand for our equipment.
Pennystock EHL.ASXAussie Market did 145 Buys out of 2035 Aussie stocks.
Let's see some history relative timing (RT) values by VectorVest: :
16-Apr = 0.95
13-Apr = 0.98
12-Apr = 1.09
11-Apr = 1.10
10-Apr = 1.09
EHL.AX has a current Value of $0.04 per share, which is overvalued compared to its Price of $0.27 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates.
As the relative timing (RT) was declining in the last 5 days, it is a bad sign for a longer run.
Let’s have a look on the technical analysis:
Firstly, we have a "Head and Shoulders" chart pattern formed on Emeco Holdings Ltd.
The price seems to have reached the end of a period of "distribution" at the top of a major uptrend; the break down through support signals a reversal to a new downtrend.
The Head and Shoulders Top is created by three successive rallies in the price following a significant uptrend. The highest high (head) is in the middle, flanked by two lower highs (shoulders) at roughly the same level. Volume is highest as the price makes the first two rallies, then diminishes through the right shoulder. Finally volume surges as the price closes below the neckline (drawn between the two lows) to confirm the reversal.
Support & Resistance:
Ichimoku plays a key role telling us that the major resistance (Kijun-sen) is 0.295 and a very strong support level formed by the 26 periods projected green cloud at 0.2775. Because of chin-kou span is below the candlesticks, a downward pressure is confirmed.
There are two lands for EHL.ASX to sink
1) Support trend line (0.255)
2) Projected Head to Neck price range (near 0.22)
