Boart Longyear share slump proves a buying opportunity
The chairman and two other directors of Boart Longyear bought shares in the global drilling concern at around 66¢ to 71¢.
The company recently said the downturn in capital and exploration spending had reduced the demand for drilling services.
It said that current year earnings before interest, tax, depreciation and amortisation would be at the lower end of a range of analysts' forecasts, which in April ranged from $199 million to $271 million.
The stock has halved since mid-April.
Chairwoman Barbara Jeremiah told the annual meeting last month that more than $70 million in costs had been extracted from the business since the middle of 2012.
Elsewhere, Wang Xiao Bin added to recent director-buying of WorleyParsons scrip, while two directors of Resource Equipment were buyers of heavily discounted scrip.
Elsewhere, a director of buoyancy products outfit Matrix Composites & Engineering, added to his stake.
This has been a very costly conveyance for punters since early 2011 when the shares hit $10 or thereabouts amid much hoopla.
Matrix lost nearly $26 million last year - a far cry from what various experts were tipping. For example, book-flogger and Buffett disciple Roger Montgomery was at one stage tipping earnings of 51¢ a share.
In the latest December half, the group made just $586,760 pre-tax on $82 million of sales.
Among sellers, two folk from Xero dominated proceedings. The accounting software concern is valued by the market at $1.3 billion and has yet to make a zack. The group released a bullish investor briefing this week.
Frequently Asked Questions about this Article…
Boart Longyear's share price fell sharply after the company said a downturn in capital and exploration spending had reduced demand for drilling services and that current-year EBITDA would be at the lower end of analysts' April forecasts (which ranged from $199 million to $271 million). The stock had halved since mid‑April. The article notes that the chairman and two other directors bought shares at around 66–71¢, which some investors view as a sign insiders see value, but it stops short of declaring a definitive buy.
The chairwoman and two other directors of Boart Longyear bought shares in the drilling company at about 66¢ to 71¢, as reported in the article. Director buying like this is highlighted alongside the company's weaker demand outlook.
The company said falling capital and exploration spending has reduced drilling demand and that EBITDA for the current year would be at the lower end of analysts' forecasts (analysts' April range was $199 million to $271 million). The article also notes the stock has halved since mid‑April.
Chairwoman Barbara Jeremiah told the annual meeting that more than $70 million in costs had been extracted from the business since the middle of 2012.
The article reports Wang Xiao Bin added to recent director buying of WorleyParsons scrip, and two directors of Resource Equipment bought heavily discounted scrip. A director of Matrix Composites & Engineering also added to his stake.
Matrix has been through a rough patch since hitting about $10 in early 2011. The group lost nearly $26 million last year, and in the most recent December half it made $586,760 pre‑tax on $82 million of sales. Despite past hype, a director recently increased his holding.
The article notes two sellers from Xero dominated share sales that day. It also states Xero is valued by the market at $1.3 billion and has yet to make a profit, and that the group released a bullish investor briefing that week.
In this article director transactions are highlighted across several companies — directors buying Boart Longyear, WorleyParsons, Resource Equipment and Matrix, and sellers at Xero. Such moves draw attention because they can reflect insiders' views of value or risk, but the article simply reports the transactions alongside company results and does not offer investment recommendations.
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