MENU

Emeco shares continue to slide after profit downgrade

Earthmoving equipment leasing firm Emeco Holdings (ASX: EHL) yesterday announced a further downgrade to full year profit expectations. Previously management had guided the market towards operating net profit after tax earnings in the range of $40 million to $44 million. Yesterday this guidance was reduced to between $35 million and $36 million.

Given the previous guidance had been issued just two months earlier it is a dramatic revision. In response the market sent the shares down to a new four-year low, closing the day at 30 cents per share. In early trade this morning the company’s shares were down another 3.5 cents to 26.5 cents.

It has been a horrendous start to the year for investors in mining service stocks. Since the start of January, while the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has gained 2.2%, many mining service stocks have halved in value. For example Emeco has declined by 52.5%, Ausdrill (ASX: ASL) by 62.7% and Macmahon (ASX: MAH) by 54.5%.

Foolish takeaway

There certainly looks to be value on offer amongst mining service stocks. The problem for investors is that no sooner do they adjust their expectations, than they are often required to re-adjust lower still.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.