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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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REA Holdings

October 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.

  • Epic Code:
  • RE.
  • Price:
  • 613p
Indonesian palm oil producer REA released excellent interims, with pretax profit rising 86% to US$36.9m on revenues 50% ahead at US$75.5m. This came thanks to an increase in production, with fresh fruit bunches of almost 290,000 tonnes (H1 2010: 246,684 tonnes) as well as a rise in prices from US$809 / tonne to US$1,196. Key to future growth is increasing its planted area and it hopes to plant up to 5,000 ha this year. Hardman & Co are forecasting eps to increase from US 97 cents to 149 cents (90.3p) this year and 186 cents (111.6p) next, which  drops the prospective PE to 6.8 and then 5.5. This is clearly very cheap in view of the expected growth rate and consequently the directors are considering a possible listing and ...

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Related Articles

REA Holdings - Palm oil firm looks cheap compared with rivals (March 2011)
REA Holdings - Huge eps growth triggers spike (November 2010)
REA Holdings - Palm oil producer eyes steep increase in growth (July 2010)

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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