hy13 results this week?, page-6

Allow me to adjust my earlier estimates (guesstimates) of EHL's near-term prospects. Analysts won't do this; they just predict after the results are out and the market has already responded!

Downside -- I no longer think we'll see upper 40s if EHL announces low end guidance and foggy/opaque guidance. Probably more like mid 50s. Main reason is that EHL is now more than 40% above upper 40s. Second reason is that analysts considered upper 40s oversold (I forgot about that previously).

Upside -- A good half-year result (upper end guidance, fairly clear moderate growth) will likely push EHL into upper 70s, possibly 80s. EHL gained more than 10% this week on above-average volume, so today's 67 cents makes 70 cents trivial. The value of my guesstimate depends on why EHL has risen. If market manipulators are playing up the stock for a sell-off, then good news won't offer momentum. But if the sp rise is mining services rerating (most of them jumped this week) or cautious optimism about EHL's results, then good news from EHL probably will push the stock up further.

For example, BKN's results this past week were OK (hopeful, but not "good"), yet it jumped from $6.15 to $7.30s, even though the sp this past month already rose from $4.50s. Not expecting this upside in EHL shares, but gives you the idea.

Dividend -- My guess is still 1.5c to 2c dividend this time (previously 2.5 cents) with 2c to 3c for 2nd half (previously 3.5 cents). Thus, between 3.5 cents and 5 cents for FY13. EHL's CFO said in the last briefing that it had cash due to lower capex in 2013 and might even give some back to shareholders (as in 2011). Even so, I seriously doubt the dividend will remain at FY12 levels. Analysts entire year (FY13) dividend averages 4.5 cents, with one estimating only 3 cents for the year (Morningstar?).

These are just my views and interpretations, so please do your own research.