Agreed Saber, despite the cash and asset backing risk remains that they are unable to land contracts or contracts with sufficient margin That said we are clearly in a mineral bull market, whether you look to the blue chip end of town or the specs there is a clear influx of SP appreciation, with this the access to capital increases, a loosening of the investment belt as mineral companies both large and small gear up to take advantage of the rise in price of commodities. To do this mining companies must increase their mining services spend .
Talent often runs in families, not always but certainly often and as we have seen over the past few years Andrew's brother, Chris, has no shortage of foresight as proven during taking MIN from their position against the ropes to where they are today at around $4b. The Ellison's are extremely smart operators, no new kids on the block when it comes to taking advantage of the commodity cycle.
The way I see it is that the entire mining services sector will over the next few years get a substantial lift, due to the fact that many services companies have dropped out over the past few years the work allocation will be between fewer companies giving those like RDG access to solid workflow. The fact that the company has been able to weather the storm and emerge with a solid set of books further reinforces the position of strength.
In summary a rising tide lifts all ships without hull damage... RDG's hull remains rock solid
RDG Price at posting:
2.1¢ Sentiment: Buy Disclosure: Held
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