Australia | Jul 18 2006
By Rudi Filapek-Vandyck
The Rinker (RIN) saga is turning out as a bit of everything for everyone, the only thing that is not happening is for the share price to pick up.
The company reported its first quarter results this morning and management took the opportunity to reiterate its profit guidance for the year. The general expectation prior to the event was that market expectations would be pulled back past the event.
The question that comes naturally to mind is how much value should we put into management’s confidence past the first quarter? A point reiterated by Credit Suisse analysts this morning.
At Intersuisse, one of the staunch supporters of the stock in recent times, there is no room for such thoughts. The analysts have slightly pulled back their profit expectations, but at the same time have reiterated their positive view regarding owning the shares for the near future.
"We see many postive aspects in RIN’s latest result that confirm the company is actually continuing to perform very strongly in the USA … and has strong prospects of continuing to do so because of its shrewd strategy of focusing in the high growth states of the USA and also having a strong ongoing workload in heavy construction and infrastructure projects", Intersuisse analysts comment.
If you are an investor who can handle some risks associated with a company whose earnings are predominantly derived from overseas (US), Intersuisse maintains its belief this stock is a Buy for you and will provide you with "superior returns".
The broker now forecasts an EPS of $121.4 for FY07, against $ 102.3 last year, to improve to $ 135.4 in 2008.
If only the share price would rise again… At 12:09pm Rinker shares were down 38c, 2.58%, at $14.33.
ABN Amro Warrants reminds us all that technical support lies at $14.10 and the last time the shares hit support they bounced back swiftly.