LabroyMar   

Labroy Marine

When analysts start re-rating a stock upwards openly in the media, it's time to walk away from it.  They are suffering from "indigestion". Allantanhc's advice to be cautious makes sense when prices surge upwards for too long.  As the share market is  CASH STRAPPED (one of the reasons: liquidity is being sucked up by IPOs) there has been no broad based rally since March 1999  even for  mainstay stocks with strong fundamentals, except for the occasional spikes due to contra rotational play.  The stock market  seems unlikely to get out of the  "POVERTY TRAP"  for some time when for most stocks "the average return with a market adjustment is dead even, 32% for both China and the other IPOs" (extracted from an article entitled "Singapore's main board investors and the Chinese 100" in  August 2006's Pulses)

 

It is displaying signs of efficient execution with its first 2 rig orders and CIMB believes that more orders will follow, maintaining its winning momentum.



Its efficient execution has resulted in analysts re-rating the stock upwards.

 

With prices remaining flat and volumes decreasing, agree with allantanhc that caution is needed in the short term.  TA can be very deceiving!

 

   Uptrend is there but the price seems to be consolidating within an upward channel after hitting $1.72 on 4 Sep. Caution is needed in the short term as the price may move either way from here. However, longer term is still positive.

 

The OBV (On-Balance Volume) is trending upwards as can be seen from Sharejunction Chart. The OBV is running parallel to the price upwards. The price will move up and down, but the trend will be up.

 

Agree that there may be a third wave but FA and TA don't seem to suggest the start of the third wave without any dip or consolidation.   While prices are moving higher, the OBV line has been dropping.   This negative divergence shows the uptrend would not persist non-stop.  Please trade with caution and not be "stung" by the stings of a "stingray".        

 

Started on the 1st wave in Nov05 at 80c (approx) to reach $1.62(approx) in April06. Then 2nd  wave down to $1.14(approx). Now it is on a 3rd wave up to the resistance at $1.96 (approx), so approx another 30c to go. Then it will retrace back on the 4th wave with support at $1.56 (approx).

 

I think this counter is on a downtrend. Check out its Acc/Dist and RSI.

 

Thanks Nostradamus Elite for the helpful advice. I was just sounding a word of caution to others not to be carried away by the upswing. The  sudden upswing on 30 August with heavy volume (total: 17352 lots; highest $1.71, lowest $1.62), saw it closed at $1.67.    In another upswing on 4 September (total volume: 8576 lots) , it closed at $1.67 (highest $1.72 - 1 lot done; lowest $1.67).  Daily total volume has been receding after 4 September -  not a good sign? The narrow margin and decreasing volumes are a sign of in-house traders (who often don't pay any brokerage) at work and rotational play, isn't it?.  .    

 

Hi hikitty,



Labroy has better fundamentals than Global Voice. Apparently, 30 Aug was not the peak yet. With heavy volumes, you must see whether the stock is going up or down. When there's continued buying, the price goes up and up.

 

Read the following posting at another site. Thought it may be of value to those who are interested in Labroy Marine.

"At S$3.50, SembCorp Marine is valued at S$5.152 Billion (1.472billion shares).
At S$1.67, Labroy Marine is valued at S$1.386 Billion (830million shares).

Recent Q2, 2006 results showed that SembCorp Marine earnd about S$50 million (operating profit), while Labroy Marine earned about S$17 million (operating profit). Labroy Marine earned about one third (17/50) of SembCorp Marine, and yet was only valued 26.9% (1.386/5.152) of SembCorp Marine.

With the current price of SembCorp Marine (S$3.50), relative valuation demands that Labroy Marine be priced at S$2.07 (1/3 of S$5.152 billion / 830million shares).

Given that Labroy will only start to book earnings from the rig building in the second half of this year, earning will likely to be higher in the second half. Also, it can handle 4 more rigs. In addition to these 4 rigs, understand from CIMB report that Labroy still has about 30% of that 40ha of land undeveloped in BATAM! Will it be used to build more rigs or ships? Either way, it will add to earnings!"

 

if reported by the local, i wont hoot abt what they say. in fact i will cfd short those counters. but when int'l fund house at work, it pays to take some notices. so far so good. those that heed my recommendation to buy on 23rd aug. huat ah!

 

It is likely to dip the next few days as no stock has moved upwards non-stop  or else the sky becomes the limit for its price.  Heavy volume is often  a sign that both contra long and contra short players are at work, as suggested by "Allantanhc's" 23 August posting.  .   When too many brokers recommend a "buy" on  a stock,  it often dips after their recommendations.  Global Voice was recommended as a "buy"  as its fair value, according to certain brokers, is 25 cents. It was then holding for some time at 18 cents.  It has dipped all the way to 13 cents after their  "learned" recommendations.  It's best not to believe those who may have an agenda in a stock.

 

   With today's upward surge, I reckon that the counter has pierced through its uptrend channel. Couple with heavy volume, this is a bullish signal. Congrats to those who are holding this stock.

 

It rose to a record high of $1.69 after Merrill Lynch initiated coverage on the firm with a "buy" call and a 12-month target price of $2.46.



"Labroy Marine has made a decisive strategic foray into the offshore sector," Merrill analyst Tse Wei Choo said in a research note. "We believe its entry is extremely timely, as fundamental indicators point to a strong sustained offshore environment for years to come."





Merrill said that Labroy recently completed the first step for its initial rig order, adding that it expects further offshore rig orders in the months ahead to serve as re-rating catalysts.

 

my expected target for labroy will be min $1.70-1.75 mid target is $1.9, max target is $2.15

Rate: 3.5/5

 

what stocks to buy depends on your trading philosophy... are you short term or long term?

 

any stock worth  to buy now.Please recommend.Thank you.

 

   This stock hit an all time high of $1.64 on 11/5 but corrected significantly to a low of $1.11 on 9/6. It has been on an uptrend since then with many positive reviews along the way. Look set for it to challenge the all time high set earlier. Just broken the resistance at $1.55 today. Technically, 1.56/1.57 would be a suitable entry point with SL set at $1.45. Otherwise, you may wait for it to break the all time high. If the volume is high, you may join in. Just sharing my view for reference only.

 

Hmm... thought of entering too. But afew months ago, there was an artical said "Better be caution as they are building the rig 1st time. And if they fail, there will be huge losses occur" So should I entre now ? Or wait till more rig contracts are signed and see that they have the capability of building rig ?