Seatrium    Last:0.091   -

Collapsing margins

Hi shplayer,

I believe you're right. I see a sustained downtrend for the time being.

 

From the FA point of view, my estimate of eps 06 is about 14.5cts. and with the newly acquired yard facilities (ex Bethlehen and Semb Engr), my forecast eps 07 is about 19cts.

At Fri closing of 3.36, this will may P/E 2006 of  23.2X and P/E 2007 17.7X.

Whilst this is a good company with strong fundementals, I prefer to buy on weakness.

My TA reading is there is no signs of a trend reversal yet.....but then again, I am only a beginner in TA.

 

Early sell-off resulted in the price dropping to 3.34, but the price is once again recovering to 3.38 late into the day. My opinion of this is that the stock has bounced off the upwards trendline and probably mean a continuation of uptrend after a correction; there is also no bad news on the continued earning of this stock. Any other opinions?

 

Short term analysis does show a sell signal.. However, due to the strong FA of the company, this stock still has the potential of trend up. Recent selloff, my guess, is a correction.

 

sell if it close below 3.40

 

singaporegal, until recently, I was vested in SembMar. I am paper trading this counter too.....practicing and learning. Your readings confirms my interpretation. Thanks

lynn89, From the FA point of view, company in in a good position with a bouyant rig market, good management, strong balace sheet and historically generous divident payout. However, I am concerned with the current pricing which seems rather demanding. My estimate of its forward P/E is in the region of 30x.

 

From TA point of view, trend has started to change.

But lynn89 may be right about this in the long term view.

I'm very short term... as you can see, about 2 weeks ago, I mentioned that its uptrending... well now its price has reversed.

 

I am of the view SemMarine has good management and good track record. It belongs to my buy-and-hold stock.

 

On a strong TA uptrend now

 

Most analysts are bullish on SembMar, but not CSFB. CSFB has a price target of $2.07 and is bearish for the following reasons:

1. Net profit of $57.5m was short of its expectation of $66m.
2. Operating margins collapsed from 10.2% in Q1 to 4.8% in Q2. The company blamed P-54 and Kristiansand rig, but then admitted that even stripping these out margins were just 5.8% at the operating level.
3. Order flow has also collapsed. YTD orders are just 60% of the levels achieved at this point last year, and 2Q06 orders where < 25% of 2Q orders. The net order book shrunk 12% since the last quarterly announcement.
4. Cash flow from operating activities is negative YTD.
5. Cosco continues to consume more of SembMar shareholders' cash than it contributes.
6. Brazil associate continues to lose money.
7. Delivery dates for most of the ships under construction have been postponed (by agreement  with buyers so no penallties expected).
8. When the assumption of debt is included, the FY06 capex forecast is actually $424m rather than $307m.