Noble Group 01 (May 08 - May 10)

[winston]

Not vested. From OCBC:-

Resilient to changes in operating landscape. Noble Group Ltd (Noble) has proven its ability to manoeuvre the rapidly changing operating environment, thanks to its robust risk management framework and experienced management team. The group impressed with strong earnings growth both during the commodities boom in early 2008, as well as during the bust in late 2008. For its 9M08, earnings surged 174% YoY to a record US$438.4m. Notably, it swam against the tide and turned in a 145% YoY acceleration in 3Q08 earnings despite the sharp slump in demand for commodities during the quarter.

An additional boost to 4Q08 earnings. In addition to its already strong FY08 earnings, Noble will get a boost from the disposal of its stake in Australia-listed iron ore producer Portman Ltd (Portman). This arises from the sale of its minority stake to Portman's majority shareholder Cliffs Asia, which has launched a takeover bid for Portman. Having made a three-fold profit from its equity investment, Noble will recognise a one-off gain amounting to A$117.7m, or approximately US$76m, in its 4Q08 financial results. We expect the gain to bump up our FY08 earnings estimate considerably by 11% to US$609.9m.

Diversification builds resilience. The deteriorating global macroeconomic outlook will no doubt pose challenges across the board. Softening demand and tumbling commodity prices will add uncertainty to Noble's earnings outlook. Nevertheless, we take comfort in the group's business model which generates earnings from a diversity of activities, namely marketing fees, assets and arbitrage. Further diversification is derived from its pipeline of varied commodities spanning energy, agriculture and metals. We believe that the group's structure will smoothen out fluctuations within each asset class and spread out its overall risk.

Reiterate BUY rating. We have updated our FY08 earnings estimate to include Noble's gain from the Portman sale. Our FY09 forecast remains intact. We are rolling over our valuation to FY09, and trimming valuation parameter to 8x (from 10x) to account for the deepening macroeconomic uncertainty, bringing our fair value estimate to S$1.83 (from S$2.33). Nevertheless, we believe that Noble will be able to ride out the ongoing uncertainty, and as such maintain our BUY rating on the stock.

[learn2win]

It is staying above the 40 DMA which is the previous resistance. Good sign?

[iam802]

I saw price-volume divergence on your chart.

[blid2def]

50d MA and Ichimoku chart here: viewtopic.php?p=36349#p36349

Not clear that this is a long opportunity yet.

[iam802]

wait for it to break $1.00 (psychological barrier)

[learn2win]

wait for it to break $1.00 (psychological barrier)

Break $1.00 then move by 1 cent. more profit....

[millionairemind]

Published January 8, 2009

Noble Group says shipping unit insured for oil spill claims

NOBLE Group Ltd, a Hong Kong-based commodity supplier whose shipping unit is being sued in California after an oil spill, says the business is insured for such claims.

The suit includes claims for clean-up costs and damages to natural resources, Noble said yesterday in an e-mailed response to Bloomberg queries.

The unit is insured for any civil liability arising out of the incident, the company said, without specifying an amount.

The state of California on Tuesday filed a suit against unit Fleet Management, which operated the 900-foot Cosco Busan that struck a bridge support in San Francisco Bay in November 2007.

Noble already faces charges in the US that it falsified documents to cover up its role in the ensuing oil spill that killed marine life, disrupted fishing and closed beaches.

The claims will have no impact on the company's financial results because any costs to the company will likely be covered by insurance, said Chris Sanda, an analyst at Daiwa Institute of Research, who has a 'buy' recommendation on Noble.

'Sea accidents happen all the time,' he said, adding the incident will probably not increase Noble's insurance premium.

Noble shares have risen 18 per cent this year, after losing almost half of their market value last year, as the global economy slowed, raising concern that demand for commodities will slump. The shares added 1.7 per cent to S$1.20 at the Singapore close yesterday.

The case, filed in the Superior Court in San Francisco, also names as defendants John Cota, the ship's pilot, Seoul-based Hanjin Shipping Co and Regal Stone Ltd. Cota was charged last year with lying about his medications on annual medical reports and negligence for polluting the bay. He pleaded not guilty.

'At the time of the incident, the ship was sailing under compulsory pilotage and Cota was the state pilot who was assigned to the ship by the local Pilot's Association,' Noble said yesterday.

California law requires every foreign ship carrying more than 300 gross tonnes to be served by a San Francisco Bar pilot if passing through the Golden Gate, or be manoeuvred on waters inside the gate, according to the San Francisco Bar Pilots website.

Noble's unit manages 190 ships, according to the federal indictment. -- Bloomberg

[winston]

If Noble is found guilty in falsifying those documents, I'm not too sure that the Insurance Company would pay for those damages.

[Mr_Boring]

If Noble really did so, I see no point investing in an unethical company.

[winston]

Noble is a big group. As long as the top leaders are not doing it, then it is ok.

I'm always a bit wary about investing in companies where the turnover is very high and the margins razor thin. There's not a room for error. And in times like this, black swans have appeared and will continue to appear.. I think