Noble Group

IMHO, the concern on Noble is no longer on the short-term liquidity. It was eased by the recent restructurings and asset disposals. I agree with CY09's view on the company survival solely from the liquidity point of view.

The new concern on Noble, IMHO, is on the earning power. The 1Q loss was from the core business, after the last disposals. It might indicate that Noble is no longer relevant in its market, due to whatever reasons(s).

A one-quarter result is non-conclusive. Mr. Market is probably over-reacted. Wait-and-see for another 1-2 quarters, is probably the best strategy, IMHO.

(14-05-2017, 01:14 PM)CY09 Wrote: Most of Noble's ordinary shareholders equity is tied to the fair value gains of its derivative contracts.

The question is how long and the % of the derivative contracts can be liquidated to cash. It will be nice if Noble can be as transparent as it was on its presentation for period ending 31st March 2016, to state how much of its contracts were expiring before 4 years and beyond 4 years (will be better if they can make it 2,4 and beyond 4 years).

The lack of this set of data is hindering my analysis unlike 1 year back

<Still Interested in Noble if the price is right>

Well the derivatives on Noble's books are already deemed to be worth nearly nothing at today's valuation, its bonds are now distressed grade and its 5 yr CDS spread is at a record high, everything points to bankruptcy being priced in at this point. This isn't going to be a much better price than this if you think the market is wrong.

Imo this company is worth nothing, so no price, however low is going to entice me to put money in it.

Bonds pricing say so but equity pricing, it is saying the derivatives are 15% of its book value.

So who is right?

(15-05-2017, 01:51 PM)CY09 Wrote: Bonds pricing say so but equity pricing, it is saying the derivatives are 15% of its book value.

So who is right?

Mr. (bond) Market and Mr. (equity) Market are having different modes? 

Unlikely both are right since Mr. (equity) Market has a higher risk than Mr. (bond) Market.

Best course of action is to avoid this stock for now.

(15-05-2017, 04:04 PM)YMPL Wrote:

(15-05-2017, 01:51 PM)CY09 Wrote: Bonds pricing say so but equity pricing, it is saying the derivatives are 15% of its book value.

So who is right?

Mr. (bond) Market and Mr. (equity) Market are having different modes? 

Unlikely both are right since Mr. (equity) Market has a higher risk than Mr. (bond) Market.

Well, then if you want to considering investing in Noble, you should restrict your considerations to investing in its bond. Since there is a clear arbitrage here (i.e one prices in bankruptcy, the other prices some value). If you do not have enough capital to purchase the bond, then I would suggest you completely avoid the company. 

I think the bond maturing in 20 March 2018 would be the best to look at now considering it has more of a long-term issue. But I cannot and will not predict the future of this company, please do your due diligence before investing. 

(https://www.bondsupermart.com/main/bond-...0906440333; https://www.bondsupermart.com/main/bond-...1577338772; https://www.bondsupermart.com/main/bond-...G6542TAE13)


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In other news: New chairman, may help with the restructuring?
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https://www.bloomberg.com/news/articles/...ader-noble
by Jack Farchy on Bloomberg

"Man Who Helped Bury Lehman Turns to Saving Troubled Trader Noble"

"Paul Brough, a British-born former KPMG LLP executive, was appointed chairman of Noble last week as the company’s stock and bonds plummeted. The Hong Kong restructuring veteran’s most recent jobs include liquidating Lehman Brothers’s assets in Asia, running what emerged from the bankruptcy of plantation developer Sino-Forest Corp., and restructuring failed fishmeal supplier China Fishery Group Ltd."

to play on the safe side, the 2018 bonds will be better. This is because Noble's CA is more than CL. Of course, if noble decides to fold before that date, then unsecured creditors will be grouped together.

If I am the mgmt with net worth stuck with this company's shares, I will proceed to unwind my derivative contracts without renewing new ones. The inflow of cash will be confidence booster and a buffer for me to do buybacks. This is of course based on the premise that the derivatives are actually worth 80-100% of its stated book value.

Quote:This is of course based on the premise that the derivatives are actually worth 80-100% of its stated book value.

The only ones that have seen the book are the Noble management and most likely the "strategic investors". So far, there is no sign of any of "strategic investors" since 2015 coming out with money to rescue Noble, unlike Olam or even FSL trust.

So, are those derivatives worth the stated book value?

See the book liao and still not taking out the wallet, kind of strange if Noble is such a bargain??

When in doubt, stay away.

The last longs who subscribed to the share issue are caught at .20 ( 2.00 after the 10:1) share reverse split
longs are very curious species.

Stock is at .59 (0,059 before the share reverse split) -70%

Noble is cheap as it has never been before.

"Interested in Noble if the price is right"

The price is right now I think CY09. what are you waiting, jump ?