Why fund managers still see upside in Emeco Holdings' turnaround

Mining equipment rental company Emeco has moved from takeover target to a quiet balance-sheet story, with managers split between exiting and adding to positions.

30 Apr 2026 · 5 min read

Mining equipment rental company Emeco Holdings continues to attract fund managers who see a gap between its cash generation and its share price. Firetrail Investments used its April 2026 Monthly Report to note the business was trading on 6.3 times FY26 earnings, a 20% discount to net tangible assets, while expected to generate around $100 million of free cash flow against a market capitalisation of roughly $572 million.

From takeover target to quiet re-rating candidate

Emeco spent much of late 2025 the subject of takeover speculation, with Tamim Funds Management's October 2025 Article naming American Equipment Holdings, Saudi Arabia's National Mining Company and Australia's National Mining Services as potential suitors following a confirmed approach disclosure. Seneca Financial Solutions and Collins St Asset Management both used the period to highlight the company's turnaround, with Collins St's September 2025 Quarterly Report detailing operating EBITDA growth of 7% to $301.1 million and operating net profit after tax up 22% to $84.5 million in FY25.

We continue to see substantial upside in Emeco as the company transitions the business from a capital heavy rental business to a higher returning services provider.

— Firetrail Investments, Monthly Report, April 2026

Not every holder stayed the course. Ryder Capital exited its position in the March 2026 quarter as part of a broader move into cash to position for volatility, despite having flagged in September 2025 that Emeco traded at just 6.5 times price-to-earnings with a substantial franking credit balance. Elston Asset Management took the opposite view, initiating a new position that same quarter and using its Quarterly Report to detail a mid-life rebuild model that lets Emeco acquire machinery at a discount and rebuild it well below the cost of new equipment.

What managers are watching next

Elston Asset Management's thesis centres on Emeco's shift toward higher-margin maintenance and asset management services, alongside a healthier balance sheet, with net debt down more than $50 million over the year to $143 million. Oracle Advisory Group has separately highlighted the maintenance segment's 83% EBITDA compound annual growth rate over three years as reason to expect a re-rating toward mining services peers trading on low-teens earnings multiples, as the business continues to deleverage and, potentially, reinstate dividends.