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Two Mining Services / Engineering stocks

Yesterday saw Monadelphous (MND) hammered over -14% following earnings which uncovered margin pressure caused by a tight labour market. Improved revenue needs to flow down to profit otherwise alarm bells ring especially when revenue is now expected to be lower in FY22, a double whammy. Conversely last week NRW Holdings (NRW) delivered an almost mirror like reverse in performance which the market embraced.

When we compare the 2 sets of earnings with the post reporting statistics mentioned earlier plus the outperformance by MND over the last 6-months MM has an understandable preference for NWH moving forward. We currently hold both in the MM Flagship Growth Portfolio with the later our preferred holding moving into Christmas hence we are considering cutting our 3% holding in MND.

MM prefers NWH over MND
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NRW Holdings (NWH) v Monadelphous (MND)
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