Buying Southern Cross Electrical Engineer Ltd (ASX:SXE)
I bought shares in electrical services firm Southern Cross Electrical Engineer Ltd (ASX:SXE). The company's near-term prospects are positive because of a recovering mining industry, substantial upcoming infrastructure projects and a booming commercial property sector. Historically focused on WA and the resources sector, the business is now more diversified following a couple of acquisitions and has $45 million in net cash to pursue further opportunities. Statutory profit is understated as it includes amortisation of acquired customer contracts ($2.8 million last year), a genuinely non-cash charge. The stock trades on a forward price-to-earnings ratio of under 9 which is cheap enough to justify inclusion in the AU portfolio despite its meagre quality.
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