Coffey Takeover Provides First Big Mining Services Win
Just three months ago, in our June Quarterly Report, we were lamenting the lack of a big winner in our basket of mining services companies. That changed this afternoon with a takeover offer for Coffey Group (ASX:COF) by US company Tetra Tech (NASDAQ:TTEK). The board recommended offer price, $0.425, is a massive 130% premium to today’s closing price of $0.185. Apart from having a meaningful impact on the Forager Australian Shares Fund’s unit price (we had 3.6% of the Fund invested in Coffey before the bid was announced), this piece of news highlights a number of important facets to our mining services strategy. First, there is value to be had in the space. Second, buying a basket is a sensible way to play it. One big win more than makes up for a few inevitable losses. Third, buying beaten up stocks that other fund managers wouldn't buy with their mother-in-law's money is something we do well. Click this (VIEW LINK) to read the full blog
Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.