Noble Group 01 (May 08 - May 10)

[grandmaster89]

Generally I do not really bother about a company share price growth using hindsight as a gauge. But I will like to use Noble Group as an example why buying AND holding good companies over the long term can be very profitable.

Here is the Noble Group share price growth over the past decade calculation -

Share price in Jan 2000 - $0.06
Share price today - $3.14

Share volume growth -

2001 - Bonus 1 for 4 (1000 shares = 1250 shares)
2002 - Bonus 1 for 5 (1250 shares = 1500 shares)
2003 - Bonus 1 for 4 (1500 shares = 1875 shares)
2004 - Stock Split 1 for 4 (1875 shares = 7500 shares) [1 share becomes 4 share]
2005 - Bonus 1 for 10 (7500 shares = 8250 shares)
2008 - Bonus 1 for 5 (8250 shares = 9900 shares)

Hence every share a person bought in 2000 would have grown to 9.9 shares in 2009.

Assuming a person bought 1000 shares at $0.06 in 2000, his cost would be $60.

And if he divested from Noble Group today by selling his accumulated 9,900 shares at $3.14, it will be worth $31,086

This implies a profit of a whooping 51,810% !!!!!!!!

This means we shouldn't just sell our counters once a 100-200% profit is achieved. If the growth story is still intact and share price justifies its fundamentals, it may not be a good idea to sell!

[profittaker]

Hi Grandmaster,

I do agree with you for this counter. Noble has been my fav since Jan-2009. I even started a blog to write about Noble. But too bad, I didn't hold it long enough to enjoy the upside ride now. Looking for opportunity to enter this counter again.

On the other hand, price this counter is volatile and sometimes seems to be manipulated. I guess that is because this counter is popular for both long and short.

[grandmaster89]

Hi Grandmaster,

I do agree with you for this counter. Noble has been my fav since Jan-2009. I even started a blog to write about Noble. But too bad, I didn't hold it long enough to enjoy the upside ride now. Looking for opportunity to enter this counter again.

On the other hand, price this counter is volatile and sometimes seems to be manipulated. I guess that is because this counter is popular for both long and short.

Wow back then Noble was merely a $1 stock. I was only vested in Aug at $2.08 so I missed the massive bull run earlier own. Noble is currently trading at PE 15 while Olam PE has exceeded 20 so there is still more upside. Can't wait to see more tangible benefits from the CIC stake - the MacArthur Coal deal was the first benefit. Lets sit back and watch the ride.

[kennynah]

this counter ..... sometimes seems to be manipulated....

Hi profittaker ,

how did you come to this observation?

[grandmaster89]

Port of Rotterdam / TankTerminals.com
8 January 2009

Botlek Tank Terminal, a joint venture between HES Beheer of Rotterdam and the Noble Group of Hong Kong, will build a new tank terminal in the Botlek area of the port. After completion of the final phase the total capacity will be around 500,000 m3 with 53 tanks.

Botlek Tank Terminal (BTT) wants to build 53 tanks, with a total capacity of 500,000 m3, in the Botlek area. During the coming year, a start will be made on the construction of approximately 285,000 m3 on the site of legal predecessor Maas Silo. For the second phase, a section of port basin will have to be filled in, for which a business case will be drawn up in conjunction with the Port of Rotterdam Authority. If the outcome is positive, the surface area of the terminal will double between 2011 and 2014, to around eight hectares. BTT estimates its own investments at €150 million.

From Noble Group Website

[winston]

NOBLE GROUP - Noble Group said it plans to issue $400 million worth of bonds by reopening an existing bond issue due 2020.

[Musicwhiz]

In my humble opinion, Noble and Olam are both super hyped up. Add Wilmar to that as well.

So they should trade at very high forward PER multiples. This means hardly any margin of safety. So no matter how attractive their business models or prospects, they may represent good companies, but poor investments.

[millionairemind]

Those vested might want to take note, something's not right with this counter. Sellers keep coming out

[Musicwhiz]

Those vested might want to take note, something's not right with this counter. Sellers keep coming out

Could it be the high debts? Or the low margins?

I'd say probably a combination of both.

[millionairemind]

haha... all these weren't a problem when market was going up

I don't know la, but these things make me sit up if I got long positions. When sellers overwhelm buyers, stock prices drop. That's all I need to know.

Even though I do my own FAs, I don't believe that there is an "intrinsci value" to a stock where buyers will come to support the stock. If there was, we wouldn't have seen STI at 800 during the AFC.

My FAs tell me which stocks to buy, my TAs tell me when to buy them if I go long..

TA also tells me when to sell them. This is the part where FA will fail. Cos' by the time all the bad news and quarterly earnings are out, the stock might have dropped 50%.