Stock Spotlight - Ausenco Limited (AAX) 8-5-09

By Jason Fittler

Ausenco Limited (AAX) specialises in the engineering, procurement, construction management, project management, commissioning and operation of mineral processing plants.

AAX has completed projects in 33 countries, covering the processing of minerals to produce gold, copper, nickel, silver, cobalt, lead, zinc, uranium and mineral sands.

Buy low and sell high is how you make money, given the current slow down in the resources cycle you have to think we are getting to the low for this stock.

At present a number of their major projects have been delayed, still they have taken the necessary steps to cut costs and keep the operation moving. Currently AAX is paying a 9% fully franked dividend which is expected to be maintained.

The risk is more projects are differed or cancelled.

The upside is that differed projects are resurrected and a steady conversion of new projects.

Keep in mind that the resources sector has only slowed, not shut down. This is not a stock which I expect to rush off, but, if the resources slow down is nearing a bottom then now is a good time to pick up a small holding.

When resources start to recover AAX will be in a prime spot to benefit, will you. It may not happen overnight but it will happen.

PS. Need more information on Ausenco Limited ? Give us a call at ABN AMRO Morgans Townsville, (07) 4771 4577 we are always ready to explain and help.