taking off

Strong buying support and bigger volumes recently, starting to look like we're getting some attention here.

Something definitely happening:

- Maybe the market is realising the doomsayers predicting another downgrade before Friday's results are wrong?

- Some better news recently on iron ore, and China, along with recent upbeat comments from BHPB CEO.

- $60m of project awards at Mooka and Koodaideri

- CGH trading on low multiples compared to peers suggesting it is oversold (FY2013: 3.9 P/E), (FY2014: 4.1 P/E). The likes of Sedgman (8.4), Ausenco (9.6), Cardno (10.6), even MacMahon is on 4.1 for FY2014!

In my view CGH was oversold in April because:

- It was the first of the now-infamous post-March tidal wave of mining services down-grades, so it copped the shock value. That’s gone now that the whole sector has followed suit saying much the same thing.

- It was in a Prospectus year, which doesn't look good.

- It is newcomer with no listed company earnings track record to fall back on.

- It had a small free float with limited liquidity, meaning it went into free fall when some local IPO instos bailed on 12 April after the downgrade.

- The size of the share price rerating probably led many of us to believe there must be something else rotten to come to the surface, more bad news? But that hasn’t happened yet…

Looking forward to Friday’s results, should be interesting.