Tuesday, February 22, 2011


Olam: CLSA has a conviction Sell with $1.60 TP, citing mispriced risks. Note that export incentives from Nigeria make up a significant chunk of Olam’s profits (30-40%), with also ongoing concerns about internal controls given significant differences between unaudited and audited nos. every yr without any impact on the reported net profit…..

Add that export incentives dependent earnings, negative EVA, and concerns about internal controls would warrant a significantly higher risk premium and lower multiples.

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