June 20-24, FA/TA for Oceanus

19/6/11

June 20-24, FA/TA for Oceanus

June 20-24, TA for Oceanus

Trend - DownTrend
Momentum - Oversold
Volume - Very low
Candlestick - NA
Support - 0.19 (Near to Fundamental Support line of 0.185 which is aligned with NAV.)
Resistance - 0.24

From TA prospective, even since the news of a possible M&A, it had moved up to 0.28 quickly. Since then, it has begin it slow and surely descending path - breaking the 0.24 and also the 20D MA cross down 50D MA - resulting in new 0.21. Just looking at TA, it should hit its 0.19 very soon.

Table 1: Calculating Enterprise Value / EBITDA as Entry

June 20-24, FA for Oceanus

From FA-quantitative analysis - We can use the simple Asset Approach (using NAV as entry) or Earning Approach (PE as Entry). Recently, there is another approach from Earning Approach to detect a more holistic valuation of an Enterprise known as "Enterprise Multiple" or simply in pure formula ("Enterprise Value / EBITDA). You can read my "FA Knowledge for more information".

In this Oceanus, the EM is about 5.43, which means Over-value if compare to current PE of 11x.

Table 2 : Use Financial Ratio data as entry.

From a FA - Financial Ratio Analysis, and base on which School of Thought.

At the moment, Oceanus still does not have any value investing, at the current rate of descending, this stock might soon be of value investing from "Discount NAV" aspect. Once it hit below 0.185, this stock should be one of your LONG list.

Note: One of value investing principle is also to avoid stock that don;t paid Dividend. This is one of those company that don't paid dividend. Depends whether you subscribe to School of Benjamin or Warren.

From FA - Qualitative Analysis,

I would suggest that you download the Annual Report 2011 and read it. It is not a difficult business that you cannot understand. It is one of the world largest inland Abalone Farmer. One thing to note, is the restaurants business that is still incurring losses but looking at report, they are trying to get rid of those money losing restaurants. At least, one positive sign.

Who are the backers for Oceanus in Dec 2010?

- Citibank and Merrill Lynch