Swiber - Grossly undervalued

Swiber has produce an impressive 2Q08 gain in revenue and profit yoy at 398.1% and 251.1% respectively. To be honest I was expecting profit to be around the 200-215% and I’m pleasantly surprised with this quarter’s result. my full review can be found here just my own analysis, hope to hear from others too. looking forward to your review mw

thanks ... nice blog

Swiber -- Grossly undervalued? On surface, I would fully agreed with kennysjq. The issue is however, with the sector that it operates in. Most of the fund managers are pretty heavy weight on the marine sector last year. As the market meltdown continues, I seriously doubt that there would be funds inflow into this sector. On the contrary, I believe that funds that are heavily exposed to this sector would cut position to prepare for redemption. Note that some of these funds got in at very early stage, they are sitting on good, if not marginal profit. Cutting positions on marine companies would dress up their portfolios. Do remember that stock market is always 12-18 months ahead of business fundamentals. The company may start to show the financial results now but the share price decline has already started.

Had a quick look at these two 10-times bagger. Ezra\'s fleet of mainly AHTS fetch more charter vs Swiber\'s diversified fleet. So Swiber also want to cheong AHTS, ie. add AHTS fleet size 30% a year over 2008-2010. Means orders placed last 2yrs at peak of newbuilding price cycle. Then the debt just keep ballooning: Go same direction as Ezra, whose leverage is 5 times that of Swiber liao (net debt to equity Ezra 36 vs Swiber 7). Ezra and Swiber same kind one - offshore supply chain they want to bao ka liao. If one job cannot execute then oil major still want them or not? Izzit har?

Dear all, my review of Swiber\'s 1H 2008 Financials and prospects has been posted on my blog at sgmusicwhiz.blogspot.com . Feel free to visit and leave comments, thanks ! :laugh: A small snippet: \"Swiber has outlined its plans for growth in the next 5 years, and this will mainly be underpinned by its fleet expansion which will take its fleet from the current 30 vessels (to date) to 39 by the end of FY 2008 and then to 48 by the end of FY 2009. Their vessels are mainly to cater for higher value and larger EPCIC projects in which Swiber occupies a niche market, while at the same time, they are also providing offshore support services (OSS) through their fleet of AHT and AHTS. However, Swiber intends to capitalize on its unique design for Equatorial Driller (ED) to take the company to the next stage of growth. Their immediate focus is to secure a drilling contract either in West Africa or Brazil, while at the same time finalizing the shipyard which is supposed to build the vessel.\"

MacGyver wrote:

Swiber -- Grossly undervalued? On surface, I would fully agreed with kennysjq. The issue is however, with the sector that it operates in. Most of the fund managers are pretty heavy weight on the marine sector last year. As the market meltdown continues, I seriously doubt that there would be funds inflow into this sector. On the contrary, I believe that funds that are heavily exposed to this sector would cut position to prepare for redemption. Note that some of these funds got in at very early stage, they are sitting on good, if not marginal profit. Cutting positions on marine companies would dress up their portfolios. Do remember that stock market is always 12-18 months ahead of business fundamentals. The company may start to show the financial results now but the share price decline has already started.

MacGyver has a point. i can see where ure coming from which is why i try my best to stay away from stocks owned by institutions as much as i can. funds, institutions, they have bosses and people to report to, and quotas to meet. this deadline shortens their holding power and makes them want to realize their gains now and in this case even more so since they\'re most probably sitting on a neat profit. however if a company\'s fundamentals are there, there is always the possibility of the funds pouring back in. as it is value investing is such and for a young investor like myself, only time can tell if im right!