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New Britain Palm Oil - Shares oversold on 2012 PE of 8.6

November 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Although the shares have retraced in line with the weak market, New Britain released sparkling interims, with the highlight being a three-fold increase in underlying pretax profit to US$149.8m on revenue that doubled to US$404m. This came thanks to a perfect storm of a 36% rise in production to 1,295,230 tonnes of fresh fruit bunches alongside a 42% increase in average crude palm oil prices to US$1,122 / tonne. Gross margins rose from 45% to 50% while cash holdings increased from US$2.7m to US$115.9m. It also has total borrowings of US$301m.The company has now sold forward 85% of expected full year production at US$1,082, which looks decent business as the spot price has fallen to US$1,000, reflecting worries over euro debt crisis ...

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New Britain Palm Oil (October 2012)

New Britain Palm Oil (April 2012)

New Britain Palm Oil - Explosive growth from PNG palm oil grower (August 2011)

New Britain Palm Oil - Very strong growth expected from store expansion (July 2011)

New Britain Palm Oil - Gain to date: 153% (April 2011)

New Britain Palm Oil (November 2010)

New Britain Palm Oil - Acquisition transforms prospects for palm oil producer (April 2010)

New Britain Palm Oil - High quality palm oil producer looks good value again (December 2009)

New Britain Palm Oil (September 2008)

New Britain Palm Oil - First major acquisition since float (July 2008)

New Britain Palm Oil - Broker initiates coverage with 800p price target (April 2008)

New Britain Palm Oil - Exciting new issue in red-hot palm oil sector (February 2008)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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