SembMarine is a tough nut to crack

SembMarine is a tough nut to crack, Share already fallen considerably (7.7 % this Month), and the selling to institution in mass qty of $2.55 had capped its upside limit. Also in comparison to its peer, Keppel Corp trades less than 3.5times its forecast 2006 earnings. As such SembMarine looks risky and expensive, considering it had rose 165% already for the past 12 month.
Reuter Analyst expect; “net profit of about S$39.6 million ($23.4 million) in the three months to September 30, up 81.7 percent from S$21.8 million in the same period a year ago”. This news already in the market since 9.35 am today. Yet the market was only greeted with a lukewarm response. From experience, this is bearish indication. Of course, for today it may oscillate up and down. Could be more on the upside!!. But be warned. This could be the last dead bounce!!!
Considering the very bearish sentiment on recent periods, and its messy mother, the Semb Corp’s court case and the rumour of more potential mass selling of SembMArine, it is better to be more conservative on this corporation.
I know, oil is going up and their order book can last for many years; even way beyond 2008. But with unclear future to our “very nervous Singapore trader.”, I think it is better to be careful. I shall expect, price to go up but be very prudent !!! The unexpected down swing may explode without further warning in the face of the announced result even though it is a good one. Remember “ Buy on rumour sell on News!