Sunday, October 19, 2008

NOL - Stopped Bidding For Hapag we see...Go to Sotheby's

On 10 October 2008 , NOL made an announcement that they are no longer bidding for Hapag Lloyd. Why? Is it a wise move...Let's look at NOL's financial strength to find clues.

Income Statement( ABOVE)

NOL's gross margin is 12.6%. ( Not high, but its the container business remember...competitive and high fuel cost.)
NOL's net profit is 4.3%. ( ?????.WTF?World Trade Federation. With the impending recession, what do you think the net margin profit will be?)

Balance Sheet (ABOVE)

NOL's debt repayment : Current Assets less than Current Liabilities. (hmm..)

Cash Flow (ABOVE)

NOL's cash flow from operations are positive BUT when deducting capital expenditure. Its negative! ( What we are doing here, in JARGONIC terms is calculating free cash flow. In simplified terms, its just the excess cash over the cash that must be spent on sustaining the business..Like most human beings get cash for salary, and we need to spend cash on food, or education e.t.c to live in this world..and the excess is free cash flow!)

Worth of Company (ABOVE)

NOL's worth of the company is US$1.85. Its worth as of now 19 Sep 2008, S$1.5. (But this is common now!....cheapskate companies everywhere! So no big deal!)

The Baltic Dry Index measures the demand for shipping capacity against the supply of Bulk carriers. See how it has plunged! A very strong indicator of the upcoming storm.......SGDividends say brace yourself....incoming......

Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team

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