Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: UOB KayHian
Company Name: NOBLE GROUP LIMITED
Research House: UOB KayHian
UOB KayHian initiates Noble (N21.SG) at Buy with a $2.50 target, based on a one-year forward P/E of 14.4X, implying a PEG ratio of 0.7X on 2010-2013 core earnings growth.
“Size matters in the commodities business as scale is required for access to capital, amortization of fixed costs, and the resilience of the sourcing and distribution network. We expect Noble to grow further with consolidation in the commodities sector,” it says.
“Size matters in the commodities business as scale is required for access to capital, amortization of fixed costs, and the resilience of the sourcing and distribution network. We expect Noble to grow further with consolidation in the commodities sector,” it says.
It notes, “investors averse to product or geographical concentration risks will find Noble attractive as it has a global trading presence in a broad spectrum of commodities.”
It adds, Noble’s core commodity trading business provides it with a relatively stable net profit margin, “allowing it to benefit from commodity inflation.”
The house likes Noble’s expanding U.S. energy trading network, status as a beneficiary of higher coal prices, while it says sugar and ethanol processing will drive agriculture segment growth and the recovery in soybean crushing margins should sustain.
Shares are off 0.9% at $2.13.
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