The reason why buying beaten-up mining services plays (eg FGE and NWH) made so much sense post the GFC was that PE's were 1-2x (we'll never see that in our lifetimes again) and the fact that there was a huge wave of mining capex coming through. We now know that mining services firms (CGH included) are issuing profit warnings by the month because they are cutting each other's throats in an attempt to win work. Also sector valuations have not yet bottomed. I remember well when NRW got to 12c/shr (PE <1x !!!!!), then went up to hit a high of $4. Likewise, FGE went from 20c to $7. Now that's the stuff that fortunes are made of!
CGH Price at posting:
41.5¢ Sentiment: Sell Disclosure: Not Held
