Blue chip with PE of a penny - Golden Agri

greenrookie
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12 years 6 months ago - 12 years 6 months ago #7489 by greenrookie

Blue chip with PE of a penny - Golden Agri was created by greenrookie

With the referendum vote scrapped, I am prepared to put some money (from sale of Eratat) into work again. I notice that there are some blue chips at sub 4 PE, 2 caught my attention DBS and golden agri.

I dun have that much capital to "play" DBS so case closed. Golden agri is trading at trailing PE of 3.6. It's worth a punt.

Why, 1H results has been outstanding, withs strong growth recorded. If you follow the company recent announcement, unilever has resume purchases of palm oil, it's subsidiary SMART in Indonesia has reported strong Q3 growth in indonesia.

Yes, there is some concern with weak COP prices, but if the indonesia subsidiary is doing well, that risk should be contained. Sunday times article mention annual sales value of oil palm to double over next 8 years.

Lastly, it's has been a laggard in recent days rally, it closes 1 cent lower when most of other blue chips are rallying on Friday.

It will announce it's results on Friday. If there is a earning season rally this week and next, it could be a potential short term gainer, and if market conditions are bad, you should be able to sleep well having bought an blue chip at low valuation and with the sector expected to show growth in coming years. (admin, can help with formatting too? iPad can't do paragraphing)

Last edit: 12 years 6 months ago by niadmin. Reason: formatting

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niadmin
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12 years 6 months ago - 12 years 6 months ago #7490 by niadmin

Replied by niadmin on topic Re:Blue chip with PE of a penny - Golden Agri

Yes, greenrookie: Golden Agri does look attractive ....

Excellent article by FT for yr enjoyment:

>>
Flayed by environmentalists, denounced by animal lovers and abandoned by western consumer products groups, Indonesiaâs Golden Agri-Resources ought to be on its knees. So why is the countryâs biggest palm oil producer by sales achieving soaring sales and record profits?
Singapore-listed Golden Agri looked in serious trouble in mid-2010 as western consumer products groups such as NestlÃ©, Unilever, Burger King and Kraft Foods stopped buying its palm oil products, worried by a clamorous boycott campaign by Greenpeace, the environmental activist group.
Greenpeace pulled no punches, producing a series of hard hitting reports on the group, which it refers to by the trade name Sinar Mas. The content is complex and disputed, but the argument is clear: Golden Agri destroys virgin forest, releases trapped carbon and threatens rare animal habitat.
Faced with this pressure, NestlÃ© and other western companies quickly bowed to Greenpeaceâs boycott demands. Just over a year later, though, Golden Agri looks more victorious than vanquished.
Six weeks ago, the group reported an increase of 166 per cent in net profit to $411m for the six months to June, compared with the equivalent period for the previous year. Revenue was up 127 per cent to just over $3bn. Earnings before interest, tax, depreciation and amortisation rose 115 per cent to $561m, roughly double last yearâs equivalent, and nearly four times the 2009 level.
The conclusion seems to be that the Greenpeace campaign had little effect on Golden Agri, in spite of its success in pressuring western food manufacturers to stop buying. The truth, though, is more nuanced.
Golden Agri and other palm oil producers are benefiting from a historic run-up in prices that has changed the economics of the industry. With crude palm oil trading in Kuala Lumpur at about M$3,064 ($992) a tonne on Tuesday the plantation groups are making nearly M$2,000 a tonne more than their costs of production â an awfully big margin.

Full article by Financial Times at: www.ft.com/cms/s/0/82d2d6e2-e33f-11e0-bb...0.html#axzz1cwBiayot

Last edit: 12 years 6 months ago by niadmin.

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greenrookie
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12 years 5 months ago #7516 by greenrookie

Replied by greenrookie on topic Re:Blue chip with PE of a penny - Golden Agri

Look out for the wall of 67 cents to come down with the release of results. Wilmar oil palm business is doing brisk business in Indonesia, I exPect golden agri to turn in stellar performances. As long as ItAly don't explode

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Val
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12 years 5 months ago #7539 by Val

Replied by Val on topic Re:Blue chip with PE of a penny - Golden Agri

Golden Agri has indeed done well in 3Q but the stock price is stuck at 66 cents. Nonetheless, this business deserves our admiration and I'm considering buying the shares.

In 9M2011, netprofit hit US$520 million, a 105% increase year on year. Palm products output and average CPO prices were at historical highs.

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greenrookie
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12 years 5 months ago - 12 years 5 months ago #7545 by greenrookie

Replied by greenrookie on topic Re:Blue chip with PE of a penny - Golden Agri

The wall of 67 cents has indeed come down.
It hit a high of 68.5 cents as of 1300hrs, I believe that there should be 1 more leg of gain for this counter.
1) STI should still gain tomorrow, judging by the futures of US and european markets, and the DAX has cross 6000 again, DOW if it is to rise again tonight, will further strength the support level at 12000. News out of europe is generally still positive, Japan and US has also good news over the weekend/ today. All these should provide positive momemtum.
2) Golden Agri, being the one of the most actively traded component stock of STI should track the market higher, given the high liquidity and the correalation of STI index.
3) Golden Agri is low on valuation as compared to the STI index stocks, be in in terms of trailing of forward PE. Compared to commodity peers, like Wilmar, Noble, Mewah, Golden AGri results is most impressive.
I would take profits if the party is still on tomorrow, because I see Iran as a possible spoiler going forward. With so much focus on Europe, People seem to forget about the supercommitte and the looming Iran problem. I believe the supercommittee will underdeliver, enjoy the party while it lasts.
Good luck

Last edit: 12 years 5 months ago by greenrookie.

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yeng
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12 years 5 months ago #7548 by yeng

Replied by yeng on topic Re:Re:Blue chip with PE of a penny - Golden Agri

greenrookie: selling out so fast? for just 2 cent gain? this blue chip is still at low low PE, isn't it? i was just thinking of going into the stock!

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