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Noble and Wilmar share prices went down and Olam share price went up yesterday.
Once again, these prove that analysts' reports are not always a good guide, at least in the short run.
Anyway, I am glad that the 'funny pictures' posted by Octavia have been removed as they are not instrumental to healthy discussion in the forum.
Peter_Pan ( Date: 21-Jan-2013 23:29) Posted:
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Ah gong help some people to get out...... Ah gong money is not their money..... Bye bye OLAM....
That is true.
Obfuscate ( Date: 22-Jan-2013 11:32) Posted:
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Ah gong is not invincible, did not prevent CSM crashing from US$100 to US$2+ where its 60% equity interest was eventually sold.
The thing is this one is ah gong's baby. Tough call. Play by ear by placing stop loss.
davidoch ( Date: 22-Jan-2013 08:20) Posted:
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Sold mine liao..cut loss and to avoid the uncertainties
davidoch ( Date: 22-Jan-2013 08:20) Posted:
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Peter,
so far how good is Kim Eng analyse? already in 1.6k profit will set trailing stop..
Peter_Pan ( Date: 21-Jan-2013 23:33) Posted:
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when it falls they might provide more appropriate target price 1.20.
SELL Target price: SGD1.30 (Downgraded from SGD1.42) Maybank Kim Eng
SELL Target price: SGD1.30 (Downgraded from SGD1.42) Maybank Kim Eng
I agree wth sifu counter... 
SELL
Target price: SGD1.30 (Downgraded from SGD1.42)
Maybank Kim Eng
Olam International
The Capex Cliff
Our analysis on M& A strategy suggests returns slightly below par.
We analyse this measuring management’s original guidance against
actual numbers achieved. Our numbers, which are admittedly
incomplete, suggest that returns are slightly below par rather than a
resounding success. We see higher execution risk from FY14 onwards,
where growth becomes even more dependent on many of these
investments reaching “steady-state”.
Banking on one high-risk Gabon project. We estimate that the
projected earnings from this single-project will make up around 15-20%
of management’s USD1b 2016F net profit target and also a critical part
of turning free-cash flow positive. Given the rapid shale-gas
developments in the US, Olam’s inexperience with executing such a
large-scale project, inherent political risk and delays since then, we
think the risk of this project is not fully-factored into share price.
Front-loaded risk. Our analysis on debt shows a worrying front-loaded
refinancing risk, with SGD3.9b to be either repaid or rolled over within
the next 18 months. This coincides with committed capex of SD1.7b
which is also front-loaded. The recent SGD915m rights issue of bonds
does not eliminate this risk, in our opinion.
Highlights the risk of relying on Mr Market. The Muddy Waters
episode highlighted the risk of its dependence on the debt market,
where a sudden spike up in yields caused damage. Ultimately, we go
back to our previous argument that a company that relies too much on
the uncertainty of the bond market/ equity market (7 equity-linked fund
raising in last 5 years) will always be subjected to a higher risk, which
investors would do well to factor in.
Consensus too optimistic, further downside on higher debt cost.
Our new earnings estimate which exclude bio gains are significantly
below consensus. We think the street has under-estimated higher
overhead and interest costs coming from its capex/ debt buildup. We
factor in the new warrants which are now theoretically dilutive, making
up 16% of existing share capital. Our new TP of SGD1.30 is pegged to
12x FY13F, below its 5-year historical mean of 16X.
Maybank Kim Eng
BUY Noble and Wilmar, SELL Olam. Our preferred stock in this sectoris Noble (NOBL SP, BUY, TP SGD1.60), which we believe is mostleveraged to an improvement in economic activity in China and has themost robust balance sheet. We also upgrade Wilmar to a BUY (TPSGD4.65) expecting them to show their strength of scale in the currentlacklustre CPO price environment and ongoing tax regime changes. Wemaintain Olam as a SELL, with a lower TP of SGD1.30. We seesignificant risk from its version of a capex cliff and deem consensusearnings too optimistic, with further downside on higher debt costs notfactored in.
Maybank Kim Eng
Maybank Kim Eng
Definitely.
Hulumas ( Date: 21-Jan-2013 10:36) Posted:
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Weekend BT carried a damaging piece on Olam penned by Michael Dee, ex-Morgan Stanley / Temasek Holdings: a. Olam spending $18.3 mln of shareholders money on underwriting fees to firms that are not even really underwriting, and potentially many millions more on unenforceable lawsuits, while rejecting a few hundred thousand dollars for an independent rating agency review. b. Olam’s unrated perpetual shares were sold thorough private banking channels that should know better: Dee said “having spent 20 years working with clients issuing hundreds of debt issues, I never once did an unrated bond issue”. c. Another important fiduciary responsibility that remains to be disclosed is how many of Olam’s management’s shares are on margin (G Verghese owns > 110 mln Olam shares). d. The ultimate end game remains uncertain as $125 mln of dividends and continuing negative cash flow are funded with ever increasing amounts of debt. Mr Dee concluded that “perhaps Temasek’s plan should be to buy the whole company so Olam can benefit from Temasek’s deep capital base and AAA rating. We would continue to focus on Noble, Wilmar, Golden Agri in the commodities-& -related sector.
Lim & Tan Securities
Peter Pan,
Just get in today at 1.605 now with profit 1.6k, run ?????
Olam Ready to Rally, Muddy Waters Lose the BattleMuddy Waters has failed, again, this time with Olam, despite what you might read in Bloomberg that paints Carson Block as a man that has to hide from the tattooed Asian gangsters that run the stock exchanges of the region, and bravely reveals corporate fraud, nothing could be further from the truth.
Muddy Waters track record is actually dismal and around Asia there are many companies struggling to rebuild their reputations after being accused of criminal wrong doing by Carson Block. The allegations are of cause false, no one has ever been charged with anything Carson Block has accused them of, instead they have just become victims of his PR machine.
But that looks like it is coming to an end, the hyperbole spewed forth in relation to Olam was over the top, the company was going to collapse with in months etc etc. Yet here we stand Olam has the full support of the major shareholders, is in sound financial shape and is ready to move back over $1.80.
On 1/17/2013, OLAM INTER closed below the upper band by 40.6%.
Bollinger Bands are 43.07% narrower than normal. The narrow width of the bands suggests low volatility as compared to OLAM’s normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. The bands have been in this narrow range for 0 period(s). The probability of a significant price move increases the longer the bands remain in this narrow range.
Currently the MACD is bullish since it is trading above its signal line.The MACD crossed above its signal line 20 period(s) ago. Since the MACD crossed its moving average, OLAM’s price has increased 9.15% , and has ranged from a high of 1.720 to a low of 1.405.
So a rally now could turn this bullish and head towards the Muddy Waters average short price that may spark a short covering rally.
Peter_Pan ( Date: 21-Jan-2013 22:09) Posted:
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For Olam, Macquarie Research foresee several tough quarters ahead.
Run road or
Olam will RUN up all the way..........
Long......Olam...
Isolator ( Date: 21-Jan-2013 18:42) Posted:
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Run....
Not short, but switch to Noble will be much better!
Isolator ( Date: 21-Jan-2013 10:34) Posted:
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Short all you can.... Lol