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Shares in drilling services provider Boart Longyear have lifted after the company said it expected to have the liquidity to meet obligations to creditors and second-quarter revenue rose from first-quarter levels.
In a preliminary filing ahead of final results to be posted on August 26, the group reported revenue of $224.1 million in the three months to June 30, down from $348.7m in the previous corresponding period but up from $197.4m in the first quarter.
Shares in Boart have recently been volatile after a ratings downgrade from Standard and Poor’s and as the mining services company reviews its refinancing options in the face of weaker demand for drilling equipment. Last week investment firm Centerbridge Partners, known for buying into distressed firms, revealed a substantial shareholding in Boart Longyear of 12.7 per cent.
Is a turn-around possible?
A high-flying company that in the mining boom commanded a price of $22 is now struggling to keep its head above water at 22 cents.
Longstanding down-trend line has been broken, but in last two trading days has coughed up some of these gains.
Increased turn-over volume coinciding with convergence and crossing over of the moving averages.
The next few trading days should show whether investors are willing to buy into the stock replacing profit-taking traders, and to continue the rebound.
The next resistance levels are at 25 and 30 cents. These are possible targets if the recovery story is believed.