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?

Comments

Post a Comment

Popular posts from this blog

INTA BINA - ROCK BOTTOM GEM

Image
The lack of catalyst in the construction Industry has resulted in the sell down of construction stocks which has hit rock bottom bringing about attractive valuations. The main catalyst the revival of Bandar Malaysia has failed to materialized so far with no news of an extension or a cancellation. The announcement of the revival in April 2019 has brought temporary euphoria to the construction sector as the mammoth project is expected to produce economic multiplier effect to the industry and indirectly the overall economy. It has exceeded the 3 months deadline for the payment of the remainder sum and signing of an actual agreement. We wait patiently for the further development from the Ministry of Finance.   In the meantime, there is value to be found in certain construction stocks. One of them is Inta Bina Group Bhd.   Inta Bina Group Bhd is a construction company  on the main board . It builds various types of buildings including residential, commercial, industri...
Read more

SM TRAK AND OPCOM - BIG HO HAA OVER NOTHING?

With the government commitment to expand Malaysias IT infrastructure, many IT companies surges forward on this expectation particularly the optic fiber segment. I met a friend from this industry and asked if this is a great opportunity for these companies. The answer is no. The number of companies that are able to produce 5G fiber optics which carries up to 100 times the 4G speed are only a handful in this world in the region of 4 companies. So, does these Ace (hic) companies have the technology to produce the needed optic fibres? Over exuberance or fact. You decide
Read more

EKOVEST - LATEST STUMBLING BLOCK

It is sad that the latest news for Ekovest only serve to remind us of Pakatan Harapan government flip flop behaviour in making sound economic decisions, there is now no believe or trust that a go ahead from the government is as the word meant to be. Many have even started calling this administration the u turn government. It is no wonder foreign funds are running away from this country. This only give rise to lack of confidence and mistrust amongst business community. Not surprisingly we are one of worse stock market performers in South East Asia. I believe the patting themselves on the back should stop and re-examine themselves. Back to Ekovest. The delay is government is non decisive on weather to sell the entire piece of land or retain 40%. It is also link to 2 billion bond issue to facilitate the moving of the army base (so called). The conundrum is weather retention of the 40% JV would bring ROI to the government sufficient to service the bonds. Or alternatively sell the whole l...
Read more