STX OSV

Am playing it safe --- won't enter unless it's below $1, despite the strong 3Q11 results. U read Credit Suisse comments:

● In the outlook statement, the company noted that there is limited visibility on new order intake due to challenges faced by shipowners in accessing financing. STX OSV has secured approximately NKr6.6 bn of contracts YTD, below 2010 orders of Nkr12.6 bn and our estimate of Nkr11 bn.

● We believe order momentum should slow down, with tighter credit conditions and policy uncertainty following the Norwegian government’s decision not to grant Eksportfinans a permanent
exemption from European Union’s Capital Requirement Directive. In addition, the potential placement of shares by STX Europe could be a dampener to share price in the near term.


● In light of growing headwinds, we reduce our target price from S$1.60 to S$1.30, based on a sector average 2012 P/E of 7x. We maintain our NEUTRAL rating on the stock.

2 men can look at a girl and have very different reaction. JP Morgan seems to luv this STX OSV, and has a  SOTP price target of S$2.00 and OverWeight rating.  This would be 8.4x / 9.4x FY11E/ FY12E earnings.

Credit Suisse sees all the warts, and has a TP of $1.30 and a  neutral rating.  I will just play safe with this gal, and consider it only at $1 and below. Wat do you think?

This is cool!
Analyst has a mind of his own. Chia Jiunyang of OCBC


According to media reports, STX Corp has decided to sell its entire 50.75% stake in STX OSV to Italian shipbuilder Fincantieri and private equity firm Carlyle Group, and will sign a preliminary agreement with the buyers by the end of May 2012.

The selling price was believed to be S$1.60 per share; this has resulted in the recent slump in STX OSV’s share price. However, nothing was announced to date, raising questions if the deal is already dead or still under negotiations.

Market rumours or mind games?

Faced with the plethora of market rumours surrounding STX OSV, we urge caution. M&A activities are highly confidential and it is unusual to have so many leaks. Therefore, the possibility that some rumours are made to influence a particular outcome cannot be ruled out. Parties in a deal (in general, not referring to STX OSV per se) may have conflicting interests and may seek ways to increase their bargaining positions, or weaken the opposing party’s positions. To illustrate, a seller would want buyers to believe that they are not desperate to sell so as to obtain a better pricing (and vice versa for buyers). Business rivals could also be interested in blocking a particular transaction for competitive reasons.

Maintain BUY; FV: S$2.00 STX OSV’s share prices slumped recently on rumours that (i) STX Corp will not seek a management premium, and (ii) when no MOU was announced for the supposed Fincantieri deal. We think the market has overreacted. Even if there is no deal, STX OSV remains a strong company with a good track record. With a PER of 6.5x and estimated dividend yield of at least 5%, we keep our BUY rating (FV unchanged at S$2.00) on the STX OSV. (Chia Jiunyang)

STX OSV is oversold. Analysts have a more positive view of STX OSV than the market seems to have. Good luck everyone.