Friday, March 25, 2011

DMG ups Otto Marine to neutral, keeps $0.25 target

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

DMG & Partners has upgraded Singapore’s offshore marine firm Otto Marine (OTTO.SI) to neutral from sell following a sharp selldown in the shares but kept the target price at $0.25.

DMG believes Otto Marine shares has been “excessively beaten down”, following a 20% price drop since it reported a quarterly loss of $9.3 million.

While there are concerns such as Otto’s failure to secure major shipbuilding contracts from third parties over the past two years as well as the threat of orders cancellation, DMG said there were also potential upsides from the sale of chartering vessels.
Otto could also benefit from better utilisation of two seismic vessels owned by subsidiary Reflect Geophysical.
At 10:36 a.m., shares of Otto Marine were flat at $0.235. They had earlier risen 2.1% to $0.24.

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