Noble Group 01 (May 08 - May 10)

[winston]

Not vested. From DBS:-

Site visit by our analyst to Noble Group reveals more upside to valuation, on higher capacity ramp up and lower coal costs.

Earnings forecasts have been revised up by 21.4-27.0% for FY10/11 to reflect higher agriculture and coal target volumes.

Reaffirm Buy call with upgraded TP of S$3.70 (Prev S$3.50), which offers potential upside of 11%.

Separately, Noble Group’s Vice Chairman Harry Banga has sold S$356.2m of shares ahead of his announced withdrawal from "day-to-day executive responsibilities" in June. The placement of 115m shares was done at S$3.10 per shares.

[millionairemind]

Noble Group
Outperform
CIMB-GK Research,
March 26
Close: $3.18

MAINTAIN 'outperform'; target price lifted to $3.75 (from $3.70). We came away from our recent visit to Noble's coal and grains assets in Australia and Argentina positive on its growth path. We have finetuned our FY2010-12 EPS estimates by one per cent on adjustments to our capital expenditure, revenue and profit assumptions. Noble remains an 'outperform' on account of its exposure to the cyclical economic recovery. Our target price has been lifted to $3.75, now based on 14x 2011 P/E, from $3.70, based on an 8x 2011 enterprise value/Ebitda multiple. Given a changing product mix towards higher-value oil products, we believe P/E valuations now more accurately capture Noble's value. Our 14x P/E target is set at a 20 per cent premium to the peer average on account of Noble's strong earnings momentum from assets coming onstream.

We see stock catalysts from any announcement of significant earnings-accretive acquisitions, and positive economic news flow supporting a stronger-than-expected global recovery.

Rising coal production, a potential stake in Australia-listed Macarthur Coal, and continued vibrancy in the coking coal market are expected to underpin rising coal contributions.

[Musicwhiz]

It takes a very very brave analyst to go against the grain, especially when everyone is bullish and recommending a "BUY".

[millionairemind]

Now for some chart action

Broke 314 support and now sitting on 50DMA. Best time to go long on this stock is when it crosses and stays above the 10DMA on a market uptrend

[Aspellian]

Broke 314 support and now sitting on 50DMA. Best time to go long on this stock is when it crosses and stays above the 10DMA on a market uptrend

Why must wait for the price to cross and stay above 10DMA? I thought it could be sufficient if the price doesnt break below its 50DMA on high volume and that it bounced up from its 50DMA support? paisei-me always alot of questions....

[millionairemind]

this one ar... don't know

Everybody has trading rules that work for them...

Alot of stocks are guided by their 10DMA for their short term trends.. go look at Creative, once broken, it hasn't moved above it for the last 3 months.

[Aspellian]

hmmm... maybe 50DMA applies more to US markets? cos often i see US charts with 50DMA and 200DMA. but spore charts like to use 10DMA or 14DMA... as long as TA+FA+Market Direction is right, just hope and pray price goes up-and-up!

[millionairemind]

[Aspellian]

Hi MM,

why you put my latest photo up on the forum?

Now everyone knows how I look like!!

Everyone know also know that I am not a real practitioner of FA, TA or Market Trend but I am a FULL-TIME PRAYist!!

[profittaker]

yet, Noble fall 2.5% today.

News Alert: Latest development on Noble deal with Macarthur Coal

What's New:
Brisbane-based Macarthur Coal (MCC.AU) went into a trading halt yesterday after receiving an approach from Peabody Energy (BTU US), one of the world's largest private-sector coal company. According to the announcement, the latter is seeking a controlling interest in the company for a total cash consideration of A$13.00 per share.

Market watchers said the biggest barrier for a bidder for MCC would be the company's fragmented shareholding and that any acquirer would need to come to a friendly agreement with Citic (22.4% stake), Arcelor Mittal (16.6%) and Posco (8.3%) in order for the deal to succeed.

Our Comments:
A bid for MCC would be the latest in a steady stream of deals in Australia's coal sector, which have seen the ranks of listed coal players dwindle at the same time as resurgent Asian demand has been driving up prices. Looking ahead, we believe this could possibly spark further M&A consolidation on other coal/energy assets.

Recall that MCC is currently in the process of acquiring Gloucester Coal (GCL AU), which is 87.7% owned by Noble Group as well as Noble's 25.3% stake in Middlemount mine JV for A$207.5m. In exchange, MCC is offering to swap 0.84 share of Macarthur shares for every one share of Gloucester share (valuing Gloucester at A$8.16), or cash of A$8 per share. This is higher than the A$7 cash/share that Noble offered for Gloucester in Jun 09. We understand that Noble has agreed to accept the share offer, which will translate to 60.4m Macarthur shares. Noble will eventually emerge as MCC’s largest shareholder with a 24.4% stake.

We think that 3 possible scenarios might play out from this latest development.

Likely outcomes:
1) MCC will proceed with the shareholder meeting on 12 Apr to consider the proposed deal and the Board continues to recommend that shareholders vote in favour of the resolution in that meeting. If it is able to garner majority support, we believe Noble will be the prime beneficiary particularly if a bidding-war breaks out.

2) Given the new offer on the table, MCC shareholders may now want a more favorable share-swap scheme with Noble. As a result, Noble could end up with a reduced stake in the enlarged coal entity. Another likelihood is that Noble's shareholders also want to hold out for a better deal for GLC with the improved outlook for coal markets. China's CIC owns a 14.9% stake in Noble.

3) The worst case scenario would be that MCC shareholders reject the proposed acquisition of Gloucester and Noble's interest in the Middlemount Coal JV. In such instance, Noble may not be able to extract the possible synergies from the enlarged entity and ride the full upside of the commodities boom.