Noble: Noble’s return to an asset-light strategy over the past two years has given it one of the strongest balance sheets in a decade.
In Feb 2015, a little-known outfit alleged Noble’s accounting practices were misleading, particularly in its accounting for Yancoal as well as the recognition of fair-value gains. Noble completely rejects the accusations: it has provided significant clarification on these issues and its auditor, Ernst & Young, has signed off on its 2014 accounts since the allegations were raised.
Given CLSA's expectation of ROE recovering to the mid-teens and positive EVA and operating cashflow, the stock looks undervalued. BUY with $1.51 TP.
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