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Hartleys has retained a strong Buy recommendation on RCR Tomlinson (ASX:RCR), describing the stock as the ultimate non-mining services, mining service company - only a third of revenue is resources with a large proportion of that dedicated to opex/continuous improvement/R&D. It is therefore less volatile and presents lower downside risk than traditional mining services companies. RCR has recently reported strong FY13 profit of $37.3mm and a final dividend of 5.75cps - exceeding expectations of $35.4mm and 5cps respectively. RCR is well-positioned to win large contracts from the mining and oil and gas sectors should such projects reach FID. Hartleys cites the compelling track record of RCR's management and low market expectations for this stock as reasons for investing in this small-cap margin improvement company. The twelve-month price target is $3.27 (current price $2.95), implying a FY15 P/E of 8.8x and a free cash flow yield of 9.7%.


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