The investment team at Wilson Asset Management (WAM) were touring the country in October to meet more than 150 companies to "check the pulse" of corporate Australia. It has found ASX share opportunities in sectors like tourism and mining services.

Let's have a look at some of the companies that the fund manager has unearthed as ideas.

Mining services

WAM said that the outlook for mining services companies is "positive" with commodity prices "continuing to boost activity" coupled with borders reopening. The fund manager noted that Australia's open borders are leading to an easing of labour constraints.

There are various businesses in this sector that the company named, of various sizes. To give context for the size of these companies, I'll quote the market capitalisations from the ASX.

There's Seven Group Holdings Ltd (ASX: SVW) with a market capitalisation of $6.5 billion.

SRG Global Ltd (ASX: SRG) was another pick in the mining services sector, with a market cap of around $310 million.

NRW Holdings Limited (ASX: NWH), with a market cap of $1.1 billion, was another of the fund manager's picks from the sector.

Travel and international migration

While the investment team are noticing strong sales from the retail sector thanks to ongoing consumer spending, WAM is going with a "cautious view" because the impact of interest rate rises are yet to flow through to the industry.

However, in terms of consumer spending, the fund manager named tourism as an interesting sector to look at.

ASX travel shares are being bolstered by the reopened borders and consumer spending shifting from goods to services. It named Webjet Limited (ASX: WEB) as one of the ASX shares that is benefiting from the improvement of movement.

The fund manager also said that international migration is "finally recovering" and this is helping businesses that are involved in education and student placements, with Idp Education Ltd (ASX: IEL) also holding a place in the portfolio.

Getting insights into business performance

At the moment it's annual general meeting (AGM) season, with many companies giving updates as they tell shareholders how FY22 went, trading updates for FY23 and expectations for future growth.

WAM said:

Strong results are not being reflected in the share prices, due to the current uncertainty with the consensus view that a weaker economy will lead to earnings downgrades in the future. This is providing the team with plenty of strong opportunities to invest in companies trading at record low valuations.

One trend is clear, the market has a preference for companies with strong balance sheets that will give them the ability to weather the storm. A select group of companies are demonstrating that strength and taking advantage of depressed share prices by announcing capital management initiatives, including buy backs.

It will be interesting to see how the WAM portfolios develop as interest rate impacts start to flow through to households and ASX share reports.

The post WAM visited 150 companies in October. Here are 5 ASX shares they are super positive on right now appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price is rocketing in morning trade, up 7%.

Below we take a look at the engineering-led mining services and construction group's guidance update and outlook for the 2022 financial year.

What guidance update did SRG report?

SRG Global's share price is soaring after the company reported it expects earnings before interest, taxes, depreciation and amortisation (EBITDA) to come in at the high end of the $45–47 million range previously forecast.

The group's cash position improved from a net debt of $8.4 million in the 2020 financial year to net cash of $12.2 million in FY21.

It reported that due to the nature of the work it carries out, COVID-19 shutdowns have only had a minor impact on its performance and labour. In fact, the company has record work in hand of $1 billion, a 41% increase year-on-year.

Commenting on the revised guidance, David Macgeorge, SRG Global's managing director said:

SRG Global continues to take significant steps forward in the execution of our strategy. We expect our FY21 EBITDA result to be at the top end of previous guidance, underpinned by new contract wins, strong operating cashflows and continued margin improvement through delivering for our blue-chip client base…

I am particularly pleased that we have continued to transition the business towards annuity earnings whilst winning a number of new term contracts in FY21. We have also managed the operational startup and contract execution exceptionally well throughout this period.

The SRG Global share price also appears to be getting a lift from its FY22 expectations. Looking ahead, Macgeorge added that with available funds to drive growth of $88.2 million, plus undrawn equipment facility of $27.7 million, he expects EBITDA in the 2022 financial year to be around 15% higher than in FY21.

SRG Global reports its full year audited results on 24 August.

SRG Global share price snapshot

Over the past 12 months SRG Global shares have gained 106%, compared to a gain of 24% on the All Ordinaries Index (ASX: XAO) over that same time.

Year-to-date, the SRG Global share price has gained 30%.

The group pays a 3% annual dividend yield, fully franked.

The post Why the SRG Global (ASX:SRG) share price is rocketing 7% today appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price will be one to watch closely on Wednesday morning. This comes after the engineering company announced that it has secured a raft of contracts.

At yesterday's market close, SRG Global shares ended the day at 51 cents.

SRG Global is an Australia-based international construction, maintenance and mining services company. The group helps build skyscrapers, bridges, dams, transport infrastructures, mining, and oil and gas projects for customers worldwide. In addition, the company offers drilling solutions, civil engineering, and industrial maintenance services.

What's the details of the contracts?

SRG Global shares could be on the move today following the company's latest positive update.

According to this morning's release, SRG Global advised it has won two facade contracts, and a structures contract in Defence.

The first facade contract is for a project with Lendlease Group (ASX: LLC), on behalf of Charter Hall Group (ASX: CHC). The building at 555 Collins Street in Melbourne requires highly specialised works that include glass reinforce concrete cladding elements. It is expected the project will take around 20 months to finish. Works have begun already on the facade feature along with curved glazing throughout the tower.

In addition, the second facade contract entails the development of 60 King William Street in Adelaide's Central Business District (CBD). The scope of the project is to design, supply and install thermally broken high-performance facades. This is estimated to be completed within the next 24 months, with works starting immediately. Notably, the building will be home to the Federal Government agency, Services Australia.

The last of the contracts is again with Lendlease for specialised labour in the Defence sector. This includes structures work at the HMAS Stirling Facility at Garden Island in Western Australia. Most important, the deal represents the first time SRG Global has entered into this space. It is assumed that the contract will be completed by the end of the current calendar year.

SRG Global managing director, David Macgeorge commented:

We are very pleased to have secured these new contracts. These contract wins highlight the diverse service offering of SRG Global and our ability to operate across a broad range of industry sectors with key repeat clients.

SRG Global share price summary

Since June 2020, SRG Global shares have continued their upward growth trajectory posting gains by more than 160%. The company's share price is also within reach of breaking its 52-week high of 52 cents today.

On the valuation metrics, SRG Global has a market capitalisation of $227 million, with approximately 445 million shares outstanding.

The post Why the SRG Global (ASX:SRG) share price will be in the spotlight today appeared first on The Motley Fool Australia.

Macquarie Group Ltd (ASX: MQG), Transurban Group (ASX: TCL) and other Australian construction giants are in the spotlight over a new Grattan Institute report, criticising cost blowouts and a lack of competition within the industry.

The Macquarie share price is down 2.9% today to $149 per share, adding to a loss of 4.15% this month, while Transurban shares have fallen 3.5% today and 2.9% over the past month.

Who's benefitting from the infrastructure boom?

The Australian policy think tank's report centred on Macquarie's "inadequate development" of the Sydney Metro City and Southwest project.

The cost of the rail network upgrade has ballooned by more than half a billion dollars from its original contract of $2.7 billion, despite Macquarie winning the contract after submitting an unsolicited proposal to the NSW state government.

Macquarie's construction of Sydney Martin Place train station alone has risen by more than $200 million "with no justification provided in central documentation".

Meanwhile, Melbourne's West Gate tunnel construction, awarded to Transurban, has been delayed by two years, with no revelation of who's forking the bill for continued setbacks.

Queensland's 2018 rail upgrades for the state's New Generation Rollingstock trains also cost an additional $361 million in refitting to meet the nation's disability access requirements.

In their latest state budgets, Queensland, Victoria and NSW set aside more than $400 billion for infrastructure projects, with the federal government adding another $110 billion.

Grattan argued that state government spending sprees on infrastructure contracts have been overshadowing a lack of financial prudence in protecting against cost overruns.

Grattan calls for international competition

Australian government spending on rail projects is in the top quarter of OECD countries: 26% higher than in Canada, 29% higher than Japan.

Grattan argued that unsolicited proposals for construction projects should be subject to greater scepticism, given construction contracts have been skewed towards Australian companies:

It's common for governments to end up paying firms more than the amount publicly claimed when the contracts were signed, yet we rarely find out the legal basis of the claim, or how the size of the additional payment was arrived at.

Few firms have the technical and financial capability to win contracts worth $1 billion or more. So it's crucial that international firms can enter the Australian market, bringing global innovation and know-how.

In selecting a successful bidder, governments should not weight local experience any more heavily than is justified to provide infrastructure at the lowest long-term cost.

It also argues that governments should be willing to enforce original project budgets. 

When they sign a contract, they should show by their actions that they will not pay additional amounts for risks that contractors have agreed to take on.

In response, the Australian Constructors Association called many of the claims questionable while highlighting the benefits of creating greater efficiencies within the sector.

The ACA highlighted the need to focus on greater issues in construction: from a higher representation of women in its workforce to more focus on preventing construction worker suicide.

It said it always "advocates for maximising local content wherever commercially practical in a competitive bid process" and backed the efficacy of 'market-led proposals' such as Macquarie's Martin Place project.

The Grattan Institute's latest report on the cost of Australian infrastructure provides some useful recommendations that unfortunately are overshadowed by poorly supported claims that further damage an already fragile construction industry.

If we could just halve the gap in productivity growth between the construction industry and other industries over the past 30 years, we could construct an extra $15 billion of infrastructure every year for the same level of expenditure and employ an extra 15,000 people. That is equivalent to constructing another three Western Sydney Airports every single year.

Construction share price snapshot

So, is the Australian construction and industrials industry "fragile"?

You may think that record government infrastructure spending is good news for the biggest construction companies on the S&P/ASX 200 Index (ASX: XJO)? Think again.

Some ASX infrastructure and construction giants have performed relatively poorly, despite record spending and the ASX hitting its highest value over the past few weeks. Take Transurban and Decmil (ASX: DCG), for example. Their share price has fallen a respective 2.7% and 44% over the past 12 months.

And despite Australia's infrastructure boom, it's slightly more challenging to track the overall sector performance due to the diversification of many of its companies and the lack of a construction index on the ASX. Some companies are still performing well.

Recent losses in the Macquarie Group share price are possibly a result of controversial reports around its business handling of Nuix Ltd (ASX NXL), but it's still up 42% over the past 12 months.

Meanwhile, strong performers like Boral Limited (ASX: BLD) shares are up 13% this month and 162% over the past 12 months. The SRG Global (ASX: SRG) share price is also up by 113% over the past year. 

The post ASX construction giants under fire over cost blowouts, lack of competition appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price is on the move in mid-afternoon trade. Its shares reached a 52-week high during the first few minutes of the market open. However, some profit-taking has led its shares to slightly pull back to 49 cents, up 6.5%.

The milestone achievement comes after the company announced a new contract with iron ore powerhouse Fortescue Metals Group Ltd (ASX: FMG).

Let's take a closer look at the deal.

What did SRG Global announce?

According to its release, SRG Global advised it has been awarded a 5-year term contract to provide multi-disciplinary services to Fortescue.

Under the Master Agreement for Maintenance and Shutdown Services Agreement, SRG Global will service Fortescue's mine, rail, and port assets throughout Western Australia. This will initially include providing rope access and electrical maintenance requirements across the Pilbara region.

SRG Global noted that the locations include Christmas Creek, Cloudbreak, Firetail, Kings Valley, and Eliwana mine sites. In addition, rail and port infrastructure assets will also be serviced.

The 5-year contract will generate around $150 million in revenue for SRG Global, depending on the number of works completed.

The services agreement is expected to take effect immediately.

Words from the Managing Director

SRG Global Managing Director, David Macgeorge, welcomed the new deal, saying:

We are delighted to be selected as a key partner to FMG and to provide critical maintenance and shutdown services across their Pilbara operations for the next five years. This is another significant step forward in our strategy to build a portfolio of annuity earnings, with quality clients, to deliver long-term sustainable growth.

SRG Global share price performance

Over the last 12 months, the SRG Global share price has gained more than 30% for patient investors.

During the market rout caused by COVID-19, the company's share fell to an all-time low of 17 cents. However, its share gradually picked up over time to reach a 52-week high of 50.5 cents today.

The post Why the SRG Global (ASX:SRG) share price reached a 52-week high appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price is lifting higher today. This comes after the company advised the ASX market that it has received two contract awards.

In mid-morning trade, the SRG Global share price is up 2% to 50 cents.

SRG Global is an Australia-based international construction, maintenance and mining services company. The group helps build skyscrapers, bridges, dams, transport infrastructures, mining, and oil and gas projects for customers worldwide. In addition, the company offers drilling solutions, civil engineering, and industrial maintenance services.

Contract awards for SRG Global

In this morning's release, SRG Global advised it has secured two new contracts, worth $45 million in total.

The first deal, awarded by GFG Liberty OneSteel, will see SRG Global deliver engineered access solutions at the Liberty Steelworks site in Whyalla, South Australia. The agreement will run for an initial 3-year period, with an extended 2-year option.

The second deal, entered with Pit N Portal Mining Services, is for drilling support at RED 5 Limited's Great Western gold mine in Western Australia. Under the agreement, SRG Global will provide production drill and blast services as well as the supply for explosives to uncover mineral deposits. The contract is set for an initial 12-month term.

SRG Global will start both projects immediately.

What did the managing director say?

SRG Global managing director David Macgeorge, welcomed the progress, saying:

We are very pleased to have secured these two term contracts, adding to our recurring annuity earnings.

Importantly, the GFG Liberty OneSteel contract is with a repeat customer, providing new services in addition to our existing refractory services term contract.

The Pit N Portal contract was specifically targeted as it builds upon our mining services portfolio of high-quality growth commodities whilst diversifying SRG Global's customer base.

About the SRG Global share price

The SRG Global share price fell more than 50% in March due to COVID-19 impacts. Since then, its shares have gained more than 175%.

Based on the current share price, SRG Global has a market capitalisation of $220 million.

The post Here's why the SRG Global (ASX:SRG) share price is climbing today appeared first on The Motley Fool Australia.

What's driving the SRG Global share price higher?

The SRG share price is on the move today after the company revised its 2021 financial year guidance for earnings before income, tax, depreciation and amortization (EBITDA) to $42–45 million, up from $38-42 million.

The company forecast its first half FY21 EBITDA will be $19–20 million, and highlighted that $550 million of contracts with repeat and targeted clients have been announced since 1 July.

SRG Global now has $1 billion of work in hand, up 41.5% since 30 June.

Looking ahead, the company stated it expects further near-term contract wins with its repeat and targeted clients.

Commenting on the revised guidance, David Macgeorge, managing director said:

SRG Global's strategy has been to shift towards a greater proportion of annuity / recurring earnings, with a disciplined focus on core business, core clients and core geographies. This strategy puts the company in a very strong position to continue building momentum into 2021, providing the confidence for our upgraded guidance for FY21…

The company is well-placed to continue to fund future growth requirements with our strong liquidity / balance sheet position. The improved financial performance and guidance is underpinned by our recent contract wins, record work in hand position of $1 billion and a high level of annuity earnings. The outlook for SRG remains positive given the company's exposure to diverse sectors and geographies, quality commodities, a tier one client base and growing levels of infrastructure construction and maintenance expenditure.

What does SRG Global do?

SRG Global is a construction and maintenance services company. Its operating segments include construction, asset services, and mining services. As part of its construction business, the company supplies integrated products and services for the development of complex infrastructure. These include bridges, dams, high rise towers, car parks, and hospitals.

With the SRG share price up more than 14% in the first two trading days of December, investors are clearly pleased with the upgraded guidance.

The post Why the SRG Global (ASX:SRG) share price is up 5% today appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price rose as much as 3.9% yesterday before closing the day flat at 26 cents per share. The recent SRG Global share price movement came after the company announced it had been awarded a major new maintenance contract.

SRG Global is an engineering-led specialist construction, maintenance and mining services group with a global portfolio of work including Emirates Tower in Dubai.

What moved the SRG Global share price yesterday?

Yesterday morning, SRG Global announced it has secured an 8-year contract for the the provision of inspection and specialist maintenance services on the Auckland Harbour Bridge. The contract is with the Auckland System Management Maintenance Alliance, and the ultimate client is the Waka Kotahi New Zealand Transport Agency.

Works under the contract have commenced and will conclude in 2028. In total, the estimated revenues under the contact are approximately NZ$25 million, notwithstanding any additional capital works.

This helps to provide the company with annuity style revenue streams. Accordingly, the company has a strategy of increasing recurring revenues versus project based earnings. This change in strategy has been largely driven by the impacts of the COVID-19 lockdowns. 

In the announcement, SRG Global managing director David Macgeorge commented:

This is a significant award for SRG Global and our New Zealand operations. The Auckland Harbour Bridge is an iconic piece of New Zealand transport infrastructure and we are pleased to extend our long-term relationship with Waka Kotahi New Zealand Transport Agency under this new agreement with the Alliance.

SRG Global share price

The company expects to generate an underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $20 million–$21 million in FY20. Additionally, it forecasts a growth of 50% EBITDA for FY21. The growth expectations are due largely to a forward order book of $707 million and an opportunity pipeline valued at $6.2 billion. 

The SRG Global share price has opened today's trade up 1.96% at the time of writing. This values the company at $113 million with a price to earnings ratio of 18.64. At this price, the company has a trailing 12 month dividend yield of 3.85%.

The post ASX small cap SRG Global secures new NZ$25 million contract appeared first on The Motley Fool Australia.

This could be the best investment opportunity that Australian investors have had in a decade.

Those are the words of portfolio managers from Perennial Value Management.

According to its latest monthly report, the investment company's portfolio managers, Sam Berridge and Andrew Smith, have been very busy buying shares following the coronavirus crash.

They commented: "Seeing what we believe as the best investment opportunities in a decade we have moved close to fully invested with 1.2% cash at month end with 65 positions in the portfolio."

How is Perennial investing during these turbulent times?

Although the money managers have been busy buying shares, they haven't just been buying everything that has been sold off.

Perennial quickly adjusted its portfolio and cut loose the shares which it believes will be vulnerable in this environment and loaded up on stocks that are likely to experience strong demand.

Two of the shares the company has been buying are meal kit company Marley Spoon AG (ASX: MMM) and biotech company Genetic Signatures Ltd (ASX: GSS). The latter has an efficient test for COVID-19 which has recently been approved in Europe.

This has proven to be an astute move by the money manager. Both Marley Spoon and Genetic Signatures have been very strong performers since the start of March with gains of 326% and 69%, respectively.

Where should you invest now?

Perennial has taken advantage of share price weakness to buy the likes of payments company EML Payments Ltd (ASX: EML), ecommerce company Kogan.com Ltd (ASX: KGN), investment company Navigator Global Investments Ltd (ASX: NGI), and telco Uniti Group Ltd (ASX: UWL).

It expects Uniti Wireless to benefit from strong broadband demand and sees Kogan as well placed given it is a pure online retailer.

Outside this, the company has been putting capital to work in existing investments which have been caught up in the selling but have more defensive attributes that are poorly understood by the market.

One of these is Limeade Inc (ASX: LME). It believes the employee experience software solutions provider is well-placed to benefit from the work from home initiative and notes that it has a strong balance sheet.

Perennial's portfolio managers also see opportunities in the mining sector and have added equipment rental company Emeco Holdings Limited (ASX: EHL) and engineering company SRG Global Ltd (ASX: SRG).

They explained: "Our discussions with numerous industry participants and our read of government policy leads us to believe the Australian mining sector will not be subjected to a compulsory shutdown of operations."

"Innovations to avoid the spread of COVID-19 by the miners and their contractors have been impressive to date. As a result we view the large selloff in mining services as another attractive area to invest capital," they added.

Foolish takeaway.

I think Perennial Value Management is spot on with its assessment and now is a great opportunity to start investing in the share market.

The post This could be the best investment opportunity for ASX investors in a decade appeared first on The Motley Fool Australia.

The SRG Global Ltd (ASX: SRG) share price closed 10% higher yesterday to $0.385 following the announcement of a major new construction package award for a project in Perth.

One The Esplanade project

Yesterday, SRG Global announced it has secured a $72 million integrated construction package for the One The Esplanade project at Elizabeth Quay, in Perth's central business district.

The new construction package was awarded to SRG Global by Multiplex. It incorporates the complete concrete structure as well as the design, supply and installation of engineered curtain wall facade for the new building.

Upon completion, One The Esplanade will comprise 29 levels and 54,000 square metres of office floor space, and be able to accommodate approximately 3,000 people. The new deal continues the successful long-term relationship that SRG Global has had with Multiplex.

SRG Global commented that the project is a premium commercial development and upon completion, is set to become the new headquarters for Chevron Australia. SRG added that contract works for the new project are expected to commence in May 2020 with a total duration of approximately two years.

Commenting on this new package award, SRG Global managing director David Macgeorge said:

"We look forward to working closely with Multiplex to deliver this significant project. Elizabeth Quay is an iconic development precinct with a multi-billion-dollar pipeline of work and SRG Global is proud to continue our involvement in the ongoing development of Elizabeth Quay."

Previous financial results announcement

Yesterday's announcement followed SRG Global's release of its 1H20 financial results earlier this week on Tuesday.

To recap these results, SRG Global recorded revenue of $267.1 million for the six months to 31 December 2019. This was a 12% increase on the $238.5 million achieved in the prior corresponding period (pcp) of 1H19.

The company attributed this increase in revenue to the commencement of new contract wins in its Asset Services Segment. In addition, the company gained significant project revenue on Civil projects, delivered by strong performance in this segment.

SRG Global commented that it believes it is well-positioned for solid, sustainable growth in FY21 and beyond. This strong position will be driven by significant work in hand totalling $737 million and a growing recurring revenue base. In addition, the company has the potential to capitalise on an opportunity pipeline that amounts to $5.7 billion.

The post Why this ASX construction share closed 10% higher yesterday appeared first on The Motley Fool Australia.