Here’s another one for the watchlist. This one’s a bit hot right now because clearly the Roadbuilder acquisition was being played by the sharks from a few months ago. This was pumped all the way up in May and then dumped and now it looks like the sharks are having another go. Even though I think that this has great prospects and growth earnings (it’s 1st quarter earnings outgrew by around 52% last years 1st quarter earnings), I would be careful to time my entry because with all the hoo ha those who got in around May are still treading water with this position despite its recent run up. I would rather wait another spike down or bottom before I go in.
Just to keep things balanced, the main criticism of this company is that it is expanding too rapidly as it already has a pretty good orderbook, even though the acquisition makes sense from a diversification perspective. As the report says, it may see integration problems, so it’s not all just good news. So discount the news and focus on its balance sheet!
Update (20-10-06) In the last 2 days large volumes betray the fact that this counter is being dumped. I really hope this gets whacked so I will wait for the sharks to get out before I descend on the carcass (like a vulture…)!
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