Monday, August 29, 2011


Noble: +4.8% at S$1.515, remaining well bid amid bargain hunting after slumping to an almost 2-yr low at $1.30 last Mon. DMG, which rates Noble at Buy with $2.00 TP says the stock is among those which have experienced a severe share price correction, though any earnings contraction is unlikely to be as severe. Add that the recent selloff offers a buying opportunity; Noble's results were below street's expectations, and led to a downgrade in street FY11/12 EPS estimates.

Coupled with the global sell-down in equity markets, Noble''s total return has fallen 26% since end-Jul11. However, it says despite a weaker economic outlook, house continue to like the counter for its earnings growth momentum, and still expect a strong 27% core earnings growth for FY11 to act as a share price catalyst." Likes Noble's stable earnings growth (46% CAGR from FY07 to FY10), acquisitions that provide steady income streams and small exposure to upstream assets. Orderbook quotes suggest $1.54 cap in the near term.

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