Goldfield Corp (GV)

[Rawnoc]

I believe the author addressed that here:

"With more than double the industry leader's margins, Goldfield's margins are bound to come back down as the company encounters competitive forces in the industry which will cut EBITDA by roughly half assuming the company can find a similarly sized replacement project for the current CREZ project rolling off in 3Q13. Worse case, the company is unable to find a similarly sized project and is left levered up, having taken on debt to buy the equipment required to service the existing contract.

In the best case scenario: assuming peer leading margins (more than 50% less than today's) and a replacement contract for the current CREZ contract, GV shares are worth 50% of today's price or about $2.30 per share.

In the worst case scenario: a return to operations as they were prior to February 2012 (date of current CREZ contract award), GV shares should return to where they were at that time. The 5 day average close prior to the announcement of the contract was $0.32 per share."

I'll say if I was a long I wouldn't be comfortable with him calling it a "challenge" which seems a little extra cautionary. Also merely replacing the lost business isn't enough as the valuation already reflects that from this level.