Why the Ausdrill share price climbed 8% today

Ausdrill Limited (ASX:ASL) has a stretched balance sheet.

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The Ausdrill Limited (ASX: ASL) share price climbed 8% to $1.56 today despite the $1 billion member of the leading S&P/ ASX200 Index (ASX: XJO) releasing no specific news to the market.

This makes such a significant share price move for a reasonably large and liquid company rather curious, with potential drivers of the move being a sell side broker rating upgrade or a buy side asset manger buying into the stock.

Ausdrill's share price is still down around 35% over the past year after the mining services company delivered a $61.1 million net profit for fiscal year 2018, which translated into basic earnings per share of 17.4 cents.

It also announced the $697 million acquisition (on an enterprise value basis including substantial debt) of drilling business Barminco and announced an ambitious forecast for 20% – 30% underlying profit growth in fiscal 2019 excluding the impact of the acquisition.

Ausdrill now has $63.1 million cash in hand but more than $480 million in "borrowings" and as such its share price is likely to remain volatile.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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