Swiber looks interesting in 2011 due to
1. Supporting macro factors such as rising demand for oil in 2011 projected by IEA and ramp-up in the number of shallow water fixed platform installations in 2011 (according to Infield Systems' latest data);
2. Strong order books of US$800m as of Nov;
3. Likely to announce some contracts in the next 1-3 months;
4. Valuations are compelling against its earnings potential in the next 2 years. Why the lacklustre share price performance?
1. 1Q-3QFY10 results have been uninspiring despite record order books. It is noteworthy that Swiber's 3 major contracts secured from ONGC in early 2010 would contribute meaningfully in 4QFY10 onwards.
2. Despite mgmt being upbeat on the prospects of new contracts, there were no contracts announced since 20 May 10. Nevertheless, I believe it is a matter of timing only. Likely to announce some contracts in the next 1-3 months. Noteworthy points
1. US$100m Convertible bond issued on 16 Oct 09 may put some near term pressure on share price.
Do refer to my blog ernestlim15.blogspot.com for more details on Swiber. I can be contacted at
crclk@yahoo.com.sg
Yes i tend to agree with your analysis on Swiber as well. It has managed to add 3 new vessels and 2 of which are in south east asia and middle east. Overall macro economics is going well for the company. Catalyst should be announcement of contract wins. Both DBS and OCBC has buy calls for swiber with target price around 1.20 to 1.30 region. Not vested yet though......
NextInsight
a hub for serious investors
