baby and bathwater, page-58

Thanks relexan, its good to see a balanced post.

It's a shame about the DSA purchase. Perhaps RQL & DSA were aware of the potential for the loss of the FMG contract, and thus the lower purchase price? Hard to know what level of profitability DSA will achieve moving forward, but it's probably a fair assumption that it will increase from here.

Regarding your EV:EBITDA calculations/PE calculations, I agree they look 'cheap' on these metrics. Considering their ROE, I don't think they are so cheap. The key question that needs to be answered is whether they can self-fund growth from this point forward. Do you have an estimate for 2012 capex?

For the reason you noted, they won't be able to incresae business 50% without purchasing more equipment.
Wouldn't they need to replace the equipment after 5-7 years - it is a harsh operating environment. What makes you think that the equipment will last a great deal longer than the depreciation period before needing to be replaced?

Thanks for your thoughts relaxan.