Icarus Signal New Entries For Today

This story features MONADELPHOUS GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: MND

Daily update on share prices and consensus price targets.

By Rudi Filapek-Vandyck

Swick Mining Services ((SWK)) falls in the same broad category of ASX-listed companies as Monadelphous ((MND)), Lycopodium ((LYL)) and Walter Diversified Services ((WDS)); they are all part of a broad group of service providers expected to benefit from the anticipated capex frenzy in the energy and mining sectors. Many companies in this group have surged above consensus target, often assisted by the fact that only one or two major stockbrokerages actually cover the stock. A consensus on the basis of one or two expert calculations is for obvious reasons less consensus than when seven or eight put in their 2 cents worth of valuation calculations. Just ask Monadelphous whose share price has been jojo-ing above and beneath consensus price target for weeks.

Earlier this year, when investor optimism rallied sky high, Swick Mining's share price surged above consensus target, which at the time was higher than where it is today, and promptly received punishment for it (see chart below). With the share price once again approaching target, the obvious question is: will Swick join the likes of Lycopodium and Walter Diversified, whose share prices have remained above target, or will this become a repeating exercise to the downside?

The obvious observations to highlight is that all data available on the FNArena service are based upon one stockbroker only (sorry, but nothing we can do about this). The second observation is that if present forecasts for FY12 prove correct, Swick Mining shares should put in a firm rally at some stage as the shares genuinely look a bargain on those FY12 estimates. Does this mean the risks are to the upside from here?

Swick and ConnectEast ((CEU)) both are the latest newcomers in the group of companies approaching consensus price target. No newcomers entered the list of stocks trading above target, which is probably related to four days of persistent weakness in the share market (something likely to reverse on Thursday).

Biotech hopeful Pharmaxis ((PXS)) saw its European proposal being rejected and the share market didn't exactly take the news lightly yesterday. No surprise thus, the shares have now entered the Bottom 50 of FNArena's Icarus Signal, alongside small miners PanAust ((PNA)) and OM Holdings ((OMH)). The inclusion of PanAust requires a special mentioning. The shares are cum one-for-five consolidation and Credit Suisse has simply pre-anticipated the changes this will do to EPS forecasts and price targets. FNArena will update its data shortly. So don't make the mistake that PanAust is all of a sudden worth a lot more. This stock will disappear from the Bottom 50 in no time. (Apologies for any possible confusion caused).

Shares in OM Holdings have been in freefall ever since they tried to rally above consensus price target in February-March. If investors ever needed a classic example of the Icarus Signal, OM Holdings seems to be the one to look at on the chart in Stock Analysis.

Investors should consider the information and data are provided for research purposes only.

Stocks <3% Below Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%) 1 SWK $ 0.42 $ 0.42 1.20% 2 CEU $ 0.48 $ 0.48 1.47%

Stocks Above Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%)

Top 50 Stocks Furthest from Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%) 1 PXS $ 0.76 $ 3.68 384.21% 2 PNA $ 0.75 $ 1.35 80.40% 3 OMH $ 0.93 $ 1.43 54.05%

To see the full Icarus Signal, please go to this link

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms