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Noble to hold from OCBC

September 28, 2010 Leave a comment

OCBC

Noble Group Ltd: Recent rally calls for caution

Summary: During its meeting with the investment community yesterday, Noble Group (Noble) reaffirmed its commitment to building the business over the medium to long term. Its strategies of connecting low-cost producers to high-growth markets, investing in stable revenue-generating assets and building critical mass in selected commodities remain intact. In addition, the group plans to leverage on its strong balance sheet to capture investment opportunities that may arise. We view value accretive investments positively; however, the group’s ongoing expansion may elevate its operating expenses, and this could weigh on its near term earnings. Despite its 2Q10 earnings falling short of expectations, Noble’s shares have appreciated by 20% since its result release, outperforming the STI’s 6% gain. We are turning cautious on the stock following its recent run-up. In our view, a strong set of 3Q10 earnings is required to justify further share price outperformance. We are keeping our S$1.97 fair value estimate intact, but trimming our rating to HOLD on valuation grounds. (Lee Wen Ching)

previous post on noble nuclear exploration

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Noble in nuclear business

September 27, 2010 1 comment

Looking at the article, it’s posted at 4:41 pm, which is 20 mins before the market close but yet the price is not bullish. Something is just not right. Why is big players shunning this stock? Is the nuclear business not going to improve the earnings? Or is it because there are a lot of barrier and obstacle getting the business going.

Noble Group, which counts China’s sovereign wealth fund as a shareholder, plans to expand into supplies of nuclear fuel to meet rising demand from China and India, its executive chairman said.

The company bought a 5.1% stake in USEC Inc., a U.S. provider of enriched uranium producing 50% of the fuel in the world, Tobias Brown said in an interview in Singapore today. Of all the nuclear plants being built, about half are in China, he said.

“We are looking carefully at the provision of nuclear fuel to Asia,” said Brown, 47. “There’s no doubt that one cornerstone of energy production in Asia will be the use of nuclear power generation.”

China’s demand for uranium may rise to 20,000 metric tons a year by 2020, more than a third of the 50,572 tons mined globally last year, according to the World Nuclear Association. India’s needs will grow 10-fold to 8,000 tons as it quadruples nuclear-power capacity to 20 gigawatts, according to Jagdeep Ghai, finance director at state-owned Nuclear Power Corp.

Noble is keen to secure a share in the provision of processed fuel as opposed to mined raw uranium because the barriers of entry to uranium enrichment is steep, Brown said.

USEC has U.S. regulatory clearance to sell enriched uranium to mainland China, the New York Times said in a report in June.

And to digress a bit, another news hit Golden Agri, one of the commodities counter in SGX. I’m just worried bad news starts coming out slowly with STI getting quite toppish. Maybe this news has dragged down the commodities sector.

Golden Agri-Resources (E5H.SG) last off 0.9% at $0.575, underperforming other Singapore-listed plantation stocks, as potential risk of more customers ending business with unit Sinar Mas (SMAR.JK) weighs, says Dow Jones.

Concerns stoked by recent comments from global industry association Roundtable on Sustainable Palm Oil that Sinar Mas not complying with its code of conduct.

Companies like Burger King, Nestle, Unilever have already stopped doing business with Sinar Mas following Greenpeace’s allegations of destructive planting practices.

“The comments by RSPO will further complicate Golden Agri and Sinar Mas’ efforts to regain customer confidence,” says Deutsche Bank, which has Hold call with $0.59 target. Still, BNP Paribas, which has Buy call with $0.76 target, says any damage to Golden Agri likely minimal; “the market is unwilling to pay a premium for the RSPO-certified CPO.”

Orderbook quotes tip $0.56 support. Indofood Agri (5JS.SG) +0.9% at $2.31, Wilmar (F34.SG) flat at $6.17, First Resources (EB5.SG) +5.3% at $1.19.

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Noble Grp gapped up

September 21, 2010 4 comments

This baby finally made a run, hmmm I mean sprint. It gap up 7 cents and is up by 11 cents currently because of the acquisition. The volume is so high that it reaches the 70million half day already, which the daily average is only 35 million. Next few days will be important to see if the resistance can be broken.

This is a very good business as the debt can be easily recovered within 3 years and add 20% increase to their bottom line. Will it go back to the historical high?

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Noble Grp change of trend

September 6, 2010 2 comments

Noble Grp has made a strong indication of trend change with breaking both the trendline and horizontal resistance at $1.67 accompanied by high volume. Now its a good chance to buy on dips. Nearest support is at 1.67 and resistance at 1.75. Taking half at 1.75 is a good choice if several bearish candlestick happens around that region.

As mentioned before, buying low and selling high is only part of the game, managing risk and reward will bring you wealth.

Double bottom projection has failed as pointed out by a friend it is hard to reach back to 1.48 as it is the price China Govt bought into the company.

Lesson learnt is to give the stocks 2 months plus to settle when a new CEO or director is leaving. It just reminds me of several cases that has happened before for example Straits Asia.

Given the earnings will climb/exploded in 2013 (check out from Bloomberg Terminal), I hope to see that Noble will consolidate and slow down its acquisition to improve the earnings as too high a leverage can be also very dangerous.

Do watch out for possible flag formation to for re-entry. It is a pity that given my current working conditions, I can only see some “action” during lunch time. Actually I am quite confused talking to my friend since they have went through the down-turn. Talking about how hard it is to cut-loss while waiting for technical rebound while at the same time saying they are investor.

Seems to me everything is base on feelings which is unlike me. I need a precise entry and exit so as to remove the emotional part in trading or investing. There are several reasons why as it has been explained from my previous post on “Never Lose Money.”

Vested at 1.72

2010Sep-Noble Grp-800x600

Breaking out of trendline

*Disclaimers applies.

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High selling pressure on Noble

2010Jul-Noble Grp-800x600 daily

high selling volume on friday close

2010Jul-wkly-Noble Grp-800x600

044 GMT [Dow Jones] Noble Group (N21.SG) halted pending announcement at 0230 GMT. Shares closed +1.2% at S$1.72 yesterday. Supply chain manager earlier today announced stepping down of Richard Elman as chairman, with current independent board director Tobias Brown replacing him as executive chairman from September 1. “He (Elman) built up Noble from day one but he had previously made known his plans to retire gradually. It’s part of an ongoing process to refresh their senior management team and shouldn’t have any major impact on the share price,” says analyst at Singapore bank. Elman will remain as Chairman Emeritus. Noble says more senior management changes expected to be announced in coming months

FA Basic:
PE 13, EPS USD0.145, NAV S$0.7376

TA:
Long term downtrend turning to sideway.
RSI as well as stochastic is picking up on thurs before the drastic fri drop
All MA lining down perfectly for shortist
Super high volume of 80 million

Looking at the technicals, I was wondering why I bought into noble in a trading range with STI already near the 3000 resistance and a downtrending line nearby. If I follow my plan and enter on the breakout of the line at 1.76-1.77, I wouldn’t be caught in this situation. So why? Partly, I think its complacency of believing the range can hold coupled with the bullishness of the market and noble is one of the few stocks that is not moving during this mini-run up back to 3000.

1.60-1.63 is the nearest daily support and as it confluence with the Fibonacci support, it might be able to hold. The earliest signal to get is a bullish reversal candle forming at the region. First thing first, I would wait for the trend line to break to time my entry. If a reversal is in the making, then the line should break before 22 aug with 1.60 holding.

But given the high volume, it will be good to see the volume subside before it happen too.

My friend has been very bullish about Noble reason is that the major shareholder is the Chinese Government!

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STI halftime: bearish mode continue

Even with Dow recovering 100 over points, STI currently broke its minor resistance at 2930 and hopefully to be supported at 2900. As of now, the market sentiment has changed from sideway to bearish market as a lower high is in the formation.

Noble just broke its support its support at $3 and is down 9 cents. Such bearish sentiment! So what has went wrong with this counter? The ex-ceo might have his last laugh. So for now the strategy is to stand sideway or wait for a lower high to form before engaging a short.

Property sector seems not able to be supported. Will also go down under if this trend continue. Nan dao its the sell in may and go away phenomenon? It’s a pity since the last rally, it doesn’t went up as much as the other sector. Capitaland is also my shorting target since this counter is also weak  fundamentally.

New bidders for Macarthur’s

April 9 (Bloomberg) — New Hope Corp. Ltd., an Australian coal producer, offered A$3.71 billion ($3.4 billion) in shares to buy Macarthur Coal Ltd., higher than a rival bid from Peabody Energy Corp.

New Hope offered 2.7 of its shares for every 1 of Macarthur’s, valuing Macarthur at A$14.58 per share, the Ipswich, Queensland-based company said today in a statement. Peabody raised its initial offer to A$14 a share this week. Macarthur closed yesterday at A$14.36.

New Hope joins Noble Group Ltd. in battling Peabody for Macarthur after shipments of coal to China last year tripled and prices doubled. China’s imports of coal used to make steel are forecast to rise 5.6 percent to 38 million metric tons this year, according to a Macquarie Group Ltd. forecast.

Both the New Hope and Peabody bids are conditional on Macarthur dropping a planned all-share takeover of Noble’s Gloucester Coal Ltd. that would see Noble become Macarthur’s largest shareholder.

Combining New Hope and Macarthur would create a coal company with a market capitalization of more than A$8 billion, New Hope said. It is being advised by Pitt Capital Partners.

Seems like the trouble for Noble Grp never ends isn’t it?