Hi, I own this and think its a really good play on the defense...

Hi,

I own this and think its a really good play on the defense sector.

There are a couple of reasons it could be flat/down from what I have seen:

1. Your Money Your Call had a caller asking about it and someone on the panel rubbished it based on its technical (roughly the start of the year). [That program appears to only get calls from SMSF which want lithium stocks or banks - seriously! Ill eat my shoes if there is a week without Banks, Telstra or Lithium]. Give them a call and ask them about ASB, I'd be surprised if they didn't give it a positive now.

2. There may be some pressure coming on the stock because the US Defense have brought forward their next vessel contracts to 2018(?-stand corrected on the date). The govt. have been pushing for a single supplier which would make it decide between ASB and Lockheed Martin. Geographically I think Austal have a good chance of getting the work if it goes down this way - they employ 4,000 in Mobile which has 200k people - dont underestimate US politics. Austal invest hundred on million in its factory.

3. People just don't know about it. I am not a dividend investor but its offering fairly safe yield WITH GROWTH. Maybe a few more dividend scans may bring it to light.

4. Allan Gray are a shareholder, they sold down a while ago but have topped up again. Their investment style isn't for most - deep value.

5. There has also been a conflict of interest relationship exposed a while back, hasn't really made AU paper but its in the US material.

I guess you know most of this already but I'm with you, I don't understand why it hasn't exploded given all of its recent wins and the potential around the submarine contracts may be massive. Then again, I also don't understand many of the valuations on the market these days, there is plenty of insanity out there.

Cheers,