ARMADA - MOVING AHEAD OF FUNDAMENTALS

The favourite oil and gas stock these days seems to be Bumi Armada. As it spring to life from the ashes of corporate debt disease, retailers rejoiced over the good news upon good news from the price of 19 cents to 35.5 cents. From the better quarter results to the sale of FSPO Perdana and heightened by Arab Oil Facilities attack, the goods news have been forthcoming.
 
From the technical analysis point of view, the price next resting point is at 50 cents but the question is when will it reached there?
 
The balance sheet has not changed drastically but it sure seems the rock bottom days are gone. The next catalyst would the reclassification of RM1.5 billion short term debt to long term and the FSPO Claire lawsuit with the results realistically expected in 1st half 2020.
 
But let examine the 3rd Quarter results, a rough guestimate of the results to be released in November 2019.
 
3rd quarter profit estimated as per 2nd quarter 64 mil
Estimated purated savings from FSPO Perdana estimated 70 mil/year 17.5 mil
Net book loss from sale of FSPO Perdana, original book value 300 mil (150 mil)
 
Expected loss for the 3rd quarter (68.5 mil)
 
Question arise are we jumping on the band wagon too soon? Its fine for long term holders but for the short term traders, is it too much euphoria in the stock and a consolidation of recent gains is justified?

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