Drilling down for value in the commodities sector
Master Drilling may be one of the undiscovered gems of the mining sector. Despite a full and growing order book, rand hedge exposure, entrepreneurial management and a conservative approach to debt, the specialist drilling company has underperformed companies in the gold and copper sectors.
At R14.30, the shares are 130c below their last peak in May. Compared with the placement price of R7.85 when it listed in December 2012, the shares have gained 78%. But as prices have run up this year, Master Drilling’s shares have added 10%, while Sibanye Gold has doubled and diversified miner Glencore has added 77%.
Master Drilling specialises in