25.9.12

Comparison of Olam vs Wilmar

Recently, commodity stocks are in the limelight.. because it is continuously affected by the global turn of events...

I saw in hardwarezone that people are looking to buy into Wilmar.. and so i would like to give my second thoughts and compare Olam vs Wilmar...

WILMAR
Fundamentals

The cashflows, net profits are inconsistent and dividend yield is low at 1+% if you divide the dividend per share with the share price accordingly.



Another thing is the "Current Liabilities", which i highlighted up there. It's astonishing 11x of its Annual Net Profit! 

The Debt is part of the "Bank term loans/short term/pre-shipment loans/trust receipts/bill discounts" and part of it is used as pledge... but i don't see a clearer picture and would likely avoid it.

Technical

Wilmar seems to be still stuck in a consolidation phase and shows no sign of clear breakout towards the top. Discretion is the better part of valour here...

Let's look at Olam then...
OLAM
Fundamental

I am able to obtain Olam 10 years financial data from its website and it really open my eyes wide...



It's amazing to see how their sales has been so consistently increasing... and ROE at 21.3% annually!
Olam really looks like what Warren Buffett will invest in to me...

Technical

Olam is on a steady uptrend now... but current markets are facing a slight pull-back from the Europe Woes (germany not doing well, china + japan tensions grow blah blah blah...).

Despite all that, a good entry would be around $1.95 to $2 :)

So what do you think of my comparison of both Olam and Wilmar? Any comments is deeply appreciated and can allow more ideas to be shared around. :)


Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

9 comments:

  1. [quote]The cashflows, net profits are inconsistent and dividend yield is low at 1+% if you divide the dividend per share with the share price accordingly.[/quote]

    you should do the same for Olam, I would not see too much difference between these two in term of cashflows/net profits, current liability/net profits, etc.

    talking about bias....

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    Replies
    1. I have already included the 10 year financial performance of Olam... The net profits are steadily increasing..

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  2. if Warren Buffett will invest, he will not invest in both shares :)

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    1. What's your take on what he will invest in Singapore shares?

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    2. Basic warren buffet rule is focus on business that generate a lot of cash flow, both company are negative in generating cash flow.

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  3. Hi James, do you think it is a good time to enter into olam now?

    pie

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    Replies
    1. Hi Pie,

      Sorry for late reply. I think based on the trendlines "Channels"; anything in the range of 1.98 to 2 is a good buy. You can set a stop loss if it crosses below the support line.

      Please remember to not just take my word for it. Exercise due diligence for you trade. :)

      Good Luck!
      James

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