On 10 Nov 2014, Morningstar said "As advised in September, we...

On 10 Nov 2014, Morningstar said "As advised in September, we cease coverage of Ausdrill to focus our attention on companies with higher-quality sustainable earnings, which we are more likely to recommend to investors. Ausdrill has no moat and a very high uncertainty rating. Ausdrill's vertically integrated mining service offering, geographic diversification, reputation and long-term relationships provide only limited barriers to entry and minimal assistance in protecting margins.".
[ANZ share investing - ASL - Profile - Recommendations]

On 10 Nov 2014, ASL share price closed at 0.57. The price as I write is 2.475. That is, up 334%. Last full-year earnings were 9.1c/shr, dividends have resumed, and next year's earnings are expected to be 30-40% higher.

Well done, Morningstar. Their assessment of Ausdrill may have been a long way away from the most spectacular misreading ever, but it is 'up there'. The cyclical nature of resources is well documented, but Morningstar appears not to have noticed. I wonder whether any of the companies "which we are more likely to recommend to investors" have even got close to ASL's performance.

Note: I have no faith at all in analysts, free or pay-for. My experience over many years suggests that a "Buy" recommendation means that the share price has already gone up, and that a "Sell" recommendation means that the share price has already gone down. The challenge for shareholders now is to pick the next resources downturn - my feeling is that it is well over a year away, but of course the situation can change quickly. Maybe I'll sell my ASL when Morningstar rate them a "Buy".