Lamprell (LON:LAM) make oil rigs. Demand for the product is high, and after a series of mishaps in 2012, the stock is up 49% YTD. Impressive as that is, most of the gain occurred in January. It is currently trading at 140p – a price that is had attained way back in February.
I had sold out of Lamprell in two stages: one in June, and one in July, having realised a tidy profit of 42% over a period of 9 months. I felt that the momentum had stalled – and this has been an accurate call (so far).
The shares have been more-or-less range-bound in the region 130-150p since February – although there have been periods when it went both above and below this figure. Over that last couple of months the shares have shown support at around the 140p level. So the share may be interesting to those who like to trade ranges, but it is of no interest to momentum investors. Although LAM has posted a loss at the last full year and interim stage, it is cheap on a PBV and P/FCF basis. It also looks reasonable on a forward PE basis: analysts are forecasting 14.18p for 2014, which would put it on a PE of about 10.
My concern is that the company has been worryingly quiet of late. Although they are getting their finances in order, there has been no news of new contracts. My real worry, though, is that in the last two years, they had announced their results date in July. The results themselves are usually published towards the end of August. There has been no such announcement this year.
Given the bad communication that has taken placed with LAM in the past, albeit under different management, this “going dark” on shareholders is somewhat ominous. I had written about GAH (Gable Holdings) earlier this year, when management had failed to inform investors upfront when they could expect results. Sure enough, they were released on the last day of the month, a Friday. The share price was slaughtered.
It may be nothing, but I’m filled with a sense of foreboding.
We shall see.
139.9p
