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Our view on NRW Holdings & Monadelphous Group (MND)

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Our view on NRW Holdings & Monadelphous Group (MND)

Taking a look at the Mining Services sector i.e. MND & NWH which I hold. This sector has not performed to expectation due to primarily labor shortages and also an absence of new exploration, particularly in the Coal Industry. As these stocks are heavily leveraged to the mining industry do you still see a recovery and when? These stocks could fall a lot further and it may be time to cut our losses as the recovery will happen but could be years away.

I would appreciate your thoughts.

Richard

Answer

Hi Richard,

I actually talked about the mining services stocks in this week’s video (click here), we like them at today’s levels and its actually one sector of the market that looks both cheap and oversold. Demand for their services which result in top line revenue has not been the issue, getting labour  has and that has hurt margins. In other words, revenue has been going up generally speaking but costs have been going up more. We doubt this will last and on 9x NRW looks particularly cheap.

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NRW Holdings (NWH)
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