"After trading as high as $2.98 in November, RCR's share price hit a low of $1.67 in January. Based on 2007-08 forecasts, this represents a price-earnings ratio of 7.3 times earnings. Investors get the best of both worlds with RCR, a multi-disciplined engineering company that provides services and machinery for mining and general infrastructure projects. It is involved in inspection, maintenance and repair work that tends to generate a reasonable level of recurring income, thereby providing a degree of earnings certainty. At its annual general meeting in October, RCR management indicated it had projects to the value of $80billion in the pipeline. A significant development for RCR in 2007 was the $43.7 million acquisition of Positron. Positron has a strong position in the provision of electrical services to the infrastructure sector in NSW where its expertise in the construction and maintenance of substations and switchboards is well-regarded. This is a new market for RCR but it fits well with its 2006 acquisition of VRBT, a company with a significant alliance contract for power-station shutdowns. RCR has a robust balance sheet with strong cash flow and minimal debt, giving it an opportunity to make further acquisitions in an industry where consolidation is the trend."
BUY, BUY, BUY
RCR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
