Despite being overtly pessimistic on both the China story and the outlook for mining services, Steve Johnson, the CIO at Intelligent Investor Funds says that...

Despite being overtly pessimistic on both the China story and the outlook for mining services, Steve Johnson, the CIO at Intelligent Investor Funds says that Macmahon (ASX: MAH) is good value based on its assets. We've disclosed some of the stocks we own in the mining services space in Australia. One of them being Macmahon. We're really focused on asset values rather than trying to predict whether the sector is going to recover. We're very pessimistic on it. We think the share price has been beaten down to a level where you are buying trucks, earth movers, equipment for one-third of the value of the kit on the open market. They've gone from growth mode to an environment where we expect them to make lower profits but throw off a lot more cash flow because the capex should now be lower than the depreciation. Watch the exclusive here.