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If Only They Had Skaffold

If Only They Had Skaffold

Notch up another win for investors who use Skaffold. Back in August last year I was asked by a viewer on Sky Business what I thought of MacMahon Holdings (ASX:MAH).

You can watch the video here at 5 mins 20 seconds.

When asked the question, I looked at Skaffold.com and noting the very small change in intrinsic value over many years I said “This business is not going to deliver sustainable long-term outperformance”.

Today’s near-40% share price decline, announcement of a cost blowout, a downgrade to previous earnings guidance and the immediate resignation of the CEO Nick Bowen is a blow to those investors who own the shares of MacMahon and do not own Skaffold.

So many MacMahon investors who panicked today didn’t need to.  If only they had access to Skaffold, they could have seen through it all.

If you are not a member, what are you waiting for?

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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5 Comments

  1. janaka.sooriyaaratchi
    :

    Hi Roger,
    I would like to know your long term view on MAH , given that it has managed to get rid of its unprofitable construction arm.
    I have managed to recover my money from the great plunge (40%) by buying the share offer @ .16Cents
    Thanks
    Janaka

  2. Janaka Sooriyaaratchi
    :

    If I read MAH’s future value from Skoffold (Demo version), it is around $0.86 for the first year. Does it mean that the market value is at a significantly discounted value of 0.3. Is this the reason for the members of yours did not panic with the current plunge in the stock value?

    • Hi Janaka,

      Great question. CHeck out the cash flow evaluate chart. Yikes! Never went near it. You can put a value on every stock and we do, but we also need great prospects for Iv growth, great cash flow and little or no debt and rising or stable ROE. MAH misses on most of these scores. Give the Skaffold team a call to find out how to get the most out.

  3. zoran arnautovic
    :

    MAH
    I may be wrong but just couple of weeks ago Skaffold valued MAH as A1 with MOS of 50% or so, and future loking very good.

    Cheers

    • Hi Zoran,

      I know I have said this about a million times but… ALL the criteria needs to be met. CHeck out the cash flow evaluate chart. Yikes! We never went near it. Massively capital intensive (like an airline) You can put a value on every stock and we do, but we also need great prospects for Iv growth, great cash flow and little or no debt and rising or stable ROE. Have a look at the rising debt, the volatility in ROe and the fact that intrinsic value has not grown in eight to ten years. MAH misses on most of these scores. A1 simply means it has a low probability of permanent catastrophe between this and the next financial report. Give the Skaffold team a call to find out how to get the most out of Skaffold Zoran. It helped us stay well clear of MAH.

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