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Sembmarine – leveraged play among oil companies (29 Apr 19)
By Ernest Lim's investing blog  •  April 29, 2019

Dear all,

This week, Sembcorp marine (“SMM”) caught my attention amid positive industry reports and its strengthening chart. I have started to accumulate SMM with my usual take profit target of a few bids, if any.

Let’s look at the basis, and importantly, the investment risks.

 

Basis

a) Analysts are turning positive

Based on Figure 1 below, average analyst target price for SMM is around $1.93, representing a potential capital appreciation of around 12% from the current price $1.72. It is noteworthy that JP Morgan has turned positive on SMM last month with a target price of $2.10, after six years of underweighting SMM.

Figure 1: Ave analyst target $1.93

Source: Bloomberg 26 Apr 19

b) Chart is supportive

Based on Chart 1 below, SMM breached its trading range $1.60 – 1.72 on 23 Apr 2019 and touched an intra-day high of $1.81 on 24 Apr 2019. With

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By Ernest Lim's investing blog
I am an avid investor, trader cum remisier. I am a Chartered Financial Analyst® charterholder, as well as, a Chartered Accountant of Singapore. I have published articles on a wide range of topics on finance and investment, ranging from market / sector outlook, technical analysis and fundamental analysis etc.
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