NOBLE: "Take a contrarian view, accumulate stock..." says DBS Vickers

Excerpts from DBS Vickers' report

ICEBERG HAS posted a series of questions on its website for Noble’s AGM today. Nothing new, the questions posed by Iceberg are a restatement of its allegations in its previous 3 reports.

Meanwhile, in a filing with SGX, Noble Group reassures that liquidity headroom of $5.1b is “more than enough” to cover total debt outstanding and targets 35% payout ratio. Our analyst keeps his HOLD rating on the stock.

Stock price (17 Apr 2015)	89.5 cents
52-week range	82.5 cents – $1.4335
PE (ttm)	19.6
Estimated P/E (12/2015)	8.0
Market cap	S$5.93 billion
Price/book	0.96
Dividend yield Bloomberg data	1.1%

On the charts, Noble Group shares have held above the c.85cts level despite the 3 Iceberg and single Muddy Waters reports that attacked on similar issues.

This suggests price resilience at $0.85 and further signs of a trough.

The stock’s volume and price action in the past 1-2 weeks also indicate likely price stabilization and basing pattern in formation.

We note that substantial shareholder Prudential has raised its stake in Noble Group by 19.2mil shares (from 5.0188% to 6.1055%) at average price of $0.882 in the past 1 month.

From a trading perspective, we take a contrarian view and advocate investors to accumulate the stock at current level, above $0.85.

Counter Name	Last	Change
AEM Holdings	2.370	0.020
Best World	2.470	0.010
Boustead Singapore	0.960	-
Broadway Ind	0.128	-
China Aviation Oil (S)	0.920	0.015
China Sunsine	0.410	-
ComfortDelGro	1.490	-
Delfi Limited	0.895	-0.005
Food Empire	1.280	0.030
Fortress Minerals	0.310	-
Geo Energy Res	0.315	0.005
Hong Leong Finance	2.500	-
Hongkong Land (USD)	3.070	0.040
InnoTek	0.525	-
ISDN Holdings	0.310	0.005
ISOTeam	0.042	-0.001
IX Biopharma	0.043	-
KSH Holdings	0.245	-0.005
Leader Env	0.051	0.001
Ley Choon	0.046	0.003
Marco Polo Marine	0.067	0.002
Mermaid Maritime	0.141	0.003
Nordic Group	0.340	-
Oxley Holdings	0.087	-0.002
REX International	0.138	0.002
Riverstone	0.815	0.015
Southern Alliance Mining	0.445	0.015
Straco Corp.	0.490	-
Sunpower Group	0.210	0.010
The Trendlines	0.069	-
Totm Technologies	0.022	-
Uni-Asia Group	0.830	-0.005
Wilmar Intl	3.490	0.040
Yangzijiang Shipbldg	1.760	0.040

Counter Name

Last

Change

AEM Holdings

2.370

0.020

Best World

2.470

0.010

Boustead Singapore

0.960

Broadway Ind