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...2-years low is $1.365 (14 Dec 12)... there were only 2 days fall below $1.40 over 2 years...
...time to monitor more closely... last: $1.430...
agree, buy in .
cannot loss to ang moh.
support Olam.
I just take the risk of buying in.
Have u take my advice to sell?
stevenk ( Date: 29-Aug-2013 23:43) Posted:
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Obviously there are people who have lost a bundle in this stock and dont want to hear the bad news. Stock prices generally do not go down or up in a straight line. All I know is Olam is one of the most indebted, if not the most indebted, commodity companies and this asset class is not doing so well. At the same time, cost of funding is going up and availability will evaporate once something goes wrong.
Someone has been giving Peter_Pan, Rosesyrup, Octavia etc bad posts ratings often. If you don't like what they say, at least challenge them by replying their post and tell them why you disagree.
Muddy Water narrow escape last year,
still making a lots of noise but
no effect anymore.
Muddy Waters (MW) has just issued a new report on Olam International Limited (Olam), titling its ?Not Changing the Old Ways?, which again raised issues over transparency and corporate governance, as well as remaining skeptical if Olam will operate differently in the future. In particular, the viability of the Gabon fertilizer project was called into question, where MW believed that Tata Chemical (TCL) is highly unlikely to participate in the project. OCBC note that in any case, house current forecasts do not include any contributions from Gabon as have always held the conservative view and would only include the project if it has achieved financial close. While house expect the new MW report to weigh slightly on sentiment, maintaining forecasts for now, given that it has already pared its FY14F core net profit figure by 16% recently. Overall, house maintain HOLD with an unchanged $1.45 fair value.
New Muddy Water report - HOLD - TP $1.45 - OCBCS
1.5 hrs after call on Olam bounce, Olam opened at 141.5 and bounced to close 147.
for more details , see my chart in http://sgxswinger.blogspot.sg/
hello123 ( Date: 02-Sep-2013 07:31) Posted:
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Wish them happy labour day...
singaporean ( Date: 02-Sep-2013 18:33) Posted:
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Aftr running away fm Olam's law suit Muddy Waters has no credibility to commt on Olam's biz and their words sud be read in derision - hv the cheek! Just see this time whether Carson Block dare to short, apparently this time just empty talk.
Peter_Pan ( Date: 02-Sep-2013 08:55) Posted:
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last week got ang moh short this one or not,
ah ma go and ask Christmas present from them.
Olam?s cash and cash equivalents stood at $1.3 billion, up
from $601.8 million a year ago. Free cashflow has also improved to a
negative $316 million from negative $661 million in 2012 and the firm
aims to be free cashflow positive from FY2014 onwards, a target brought
forward by a year after the attack by US shortseller Muddy Waters in
November 2012. See More at http://goo.gl/JtKiBu
Very tiring for these analysts... Keep changing their TP...
HOLD with lower S$1.45 fair value
By Carey Wong
Olam posted FY13 revenue of S$20.9b, up 22%, and was around 5% ahead of our forecast versus reported net profit, core earnings came in much lower at S$314.3m, but still up 13%, and was about 3% ahead of our estimate. Olam declared a final dividend of S$0.04/share, unchanged from last year. In view of the eroding profitability, we pare our FY14F core net profit figure by 16% (but still expect to see decent earnings growth in FY15). This also drops our fair value from S$1.73 to S$1.45, still based on 10x FY14F EPS. Maintain HOLD.
FY13 results just in line
Olam posted FY14 revenue of S$20.8b, up 22%, and was around 5% ahead of our forecast, as it continued to enjoy strong volume growth (+49.5%). However, reported net profit slipped 2% to S$362.6m, hit by higher taxation. Besides higher taxation (in line with our forecast), we also note that margins have fallen across some business segments, core earnings came in much lower at S$314.3m, but still up 13%, and was about 3% ahead of our estimate. Olam declared a final dividend of S$0.04/share, unchanged from last year.
Profitability/ton appears to be lower
Business-wise, the Food Staples and Packaged Foods segment contributed 36% of total 4QFY13 revenue, as revenue jumped 53% YoY, volume +29% but we note that profitability has slipped, with GC/ton down 17% and NC/ton down 12%. Confectionery & Beverage Ingredients was next with 24% contribution in 4Q, where revenue climbed 22% YoY, volume +23% but again we note lower profitability, with GC/ton falling 41% and NC/ton down 42%. Industrial Raw Materials contributed 22% of 4Q13 revenue, but sales slipped 4% YoY, even as volume +30% GC/ton was flat, but NC/ton rose 19%.
Net gearing back at 2.0x
Meanwhile, net gearing has eased somewhat from 2.2x as of end Mar to around 2.0x as of end Jun, and is back to the same level as last Jun. Olam believes that it has made progress on its strategic plan priorities and pathways identified include taking a rebalanced approach to growth and cash-flow generation (aims to be FCF positive by FY14).
Lower S$1.45 fair value
In view of the eroding profitability, we pare our FY14F core net profit figure by 16% (but still expect to see decent earnings growth in FY15). This also drops our fair value from S$1.73 to S$1.45, still based on 10x FY14F EPS. Maintain HOLD. ....last: $1.44...
Muddy Waters, LLC
www.muddywatersresearch.com
info@muddywatersresearch.com
Olam International: Strong Sell
September 2, 2013
Director of Research: Carson C. Block, Esq.
Not Changing the Old Ways
We continue to believe that, in a world where capital is allocated to maximize economic
efficiency, Olam?s shares have no value. The Company has simply borrowed too much
money, and then invested in projectsthat will not generate sufficient returns to repay its
debt obligations. In this note, we will only briefly comment on Olam?s FY 2013 results.
(Numerous analysts have already done so.) Instead, we will focus on qualitative points
that cause us to believe Olam is not really turning over a new leaf.
Olam?s FY 2013 results display the pathologies we noted in November 2012:
? Adjusted return on average assets was only 1.8%. (We adjusted net income to
S$261.8 million by excluding from Olam?s operational profit after tax all
biological gains and changes in measurement of derivatives.
1
For an explanation
of how and why we make adjustments to Olam?s net income, see our initial report
dated November 26, 2012.)
? Allowance for doubtful accounts more than halved from S$22.6 million to S$9.6
million, which made FY 2013 a less unfavorable a comparison to FY 2012.
? Inventory write-downs were only S$115,000, versus S$15 million last year, which
also made FY 2013 a less unfavorable comparison to FY 2012.
? Free cash burn was S$800.4 million, and Olam spent S$1.1 billion on acquisitions
and investments in FY 2013.
The big picture issue is that we are skeptical Olam will operate differently in the future.
? There have been no changes to the board since our initial report. This board had
been complacent, at best, as Olam went on its borrowing and spending binge. It
was evidently more concerned with the messenger than the message when we first
spoke critically of the Company.
Olam?s board has ossified. The average tenure of Olam?s independent directors is
11.4 years. Olam?s IPO was only eight years ago. Only one independent director
1
We do not ignore asset impairment charges because we see these as a likely understated, and recurring
function of Olam?s business.
Page 2has been appointed since Olam?s IPO, and that was five years ago. These
gentlemen have become too vested in Olam?s mistakes to deal with them
effectively.
? CEO Sunny Verghese said nothing during the call, which might be interpreted as
the Company transitioning to a future without Mr. Verghese. However, what
would really change if Mr. Verghese were no longer CEO? Olam has a tightknit
? probably insular ? core of top managers who have worked together for many
years. Were the Company?s new leadership to come from the existing pool of top
management, which seems to lack diversity of views, what would really change?
? Olam continued to essentially invent its own performance metricsin a
continuation of past less-than-best practices. For the FY 2013 results, Olam
altered its definition of free cash flow, thereby excluding cash interest, taxes, and
certain working capital account changes. (Our initial report explains the
irrelevance of Olam?s invented gross and net contribution metrics.)
? Olam was asked what its average cost of debt is, and Mr. Anatharaman did not
answer the question with any specificity.
? More birds in the bush are better than one in the hand. Olam steadfastly refuses
to provide real transparency into the Gabon fertilizer project. Reading between
the lines, Tata Chemicals (?TCL?) is highly unlikely to participate in the project.
Rather than acknowledging this, Olam stated that it is happily looking for more
possible partners who are willing to buy in (so that Olam can sell down). We
believe the reality is that TCL no longer views the project as attractive (if it ever
did). Our recommendation is that Olam fall on the sword, admit to investors it
wasted significant money on dredging, and terminate the project.
? This brings up perhaps the most significant point: Despite Olam?s new strategic
plan that calls for capital spending to be curtailed (notwithstanding the Company
responding to our initial criticism by defiantly pledging to increase capex and
investment), Olam has not admitted having had a problem. In other words, the
Company has not acknowledged that it made a number of investments that will
not ?gestate? into returns in excess of their costs. It is well settled that the road to
any recovery begins with an acknowledgement that a problem exists. We have
yet to hear anything of thissort from Olam. Investors really need to understand
why this problem exists, and how the Company proposes to fix it. Lacking this
transparency, investors have no basis to form opinions as to whether the Company
is likely to improve its performance.
1.39 good price to pick up...
luminol ( Date: 30-Aug-2013 15:25) Posted:
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Olam got unlimited healing potion supply. XD
Doesn't seem to get hurt badly.
Time to pick up some!
biturbo ( Date: 30-Aug-2013 15:11) Posted:
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