Thoughts on Capitol Health, Austal and Standline Resources?
Hi James and Team Can I have your current view on Capitol Health and Austal Also is Standline Resources looking like a buy following recent falls? regards Debbie
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Answer
Hi Debbie,
Capitol Health (CAJ) is trading at a discount to peers and screens as a buy in a relative value sense. We still see the potential for corporate interest if the outlook improves. It will be one we watch closely at the result in a few months.
We sold Austal (ASB) around 6 months ago given the backdrop of higher input costs weighing on margins. They have been able to win a number of contracts which is likely to support earnings for the next few years with strong leverage to increasing defence spending. It is on our radar into weakness.
We took a 64% profit on Strandline Resources (STA) last year on increased risk as they moved into production at their Coburn mineral sands project. These concerns have been proven correct with the slower than expected ramp up of production while the mineral sands market has also been under pressure on a soft Chinese Property market. We may take another look at STA if the outlook improves, but for now, it’s a wait and see prospect for us.
