Monadelphous Group Limited (ASX: MND) and Mineral Resources Limited (ASX: MIN) have today been removed from the S&P/ASX 100 (Index:^AXTO) (ASX:XTO) following a rapid descent in their share prices…
Monadelphous and Mineral Resources' share prices over 12-months. Source: Google Finance.
S&P Dow Jones Indices – a global leader in providing and updating market indices – announced its quarterly rebalance this morning.
Of Australia's top 100 public companies, Monadelphous and Mineral Resources Limited were the only two excluded from the list.
Their exclusion from the top 100 index should be cause for concern. And if you still think their share price downturn is just short-term cyclicality, you should know, Australia and New Zealand Banking Group's (ASX: ANZ) warning for resources investors suggests this downturn is going to stay around for a lot longer than many expect.
In a report on resources and infrastructure project spending, published in late February, ANZ said resources spending will drop by 60% in the next three years, from $188 billion in 2014 to just $32 billion in 2017.
There's no denying that mining services companies – like Monadelphous and Mineral Resources Limited – are not the place to invest your money.
No matter what their management teams are promising, or how good their historical performance may be, they won't be able to win contracts and grow profits if there's no work.
Here's a better idea…
