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Courage Marine: Added at 10.5c a share.

Monday, September 5, 2011

It has been some time since I wrote about Courage Marine. With the BDI in a downtrend, there was no reason to go long on this counter. The last time I did something pertaining to this counter was a divestment when news of a dual listing in Hong Kong was made known.

However, as I like the company, I have been tracking its performance which is of course closely tied to the BDI as most of its revenue is derived from spot rates.

The BDI was consolidating for many months. Since hitting a low in early 2011, 1,250 has been established as a support, four times tested no less. 1,500 was breached recently and retested successfully as support. The BDI has broken out of its consolidation phase and we could be seeing a trend reversal starting in earnest.

Courage Marine's share price went lower than its low of end 2008 recently. This means that the market expects the company to do worse than it did in the last recession but with the BDI breaking out of its consolidation phase to the upside, the fundamentals seem to suggest something else.

So, I have tip-toed back into Courage Marine, re-initiating a long position in the company. Technically, I am wary of initiating too big a long position because the declining 20dMA could push price lower again. If price were to overcome the 20dMA convincingly, we could see 12.5c and 13.5c tested next.

Related posts:
Courage Marine: Profit warning.


Drizzt said...

looks like a time to relook courage marine

AK71 said...

Hi Drizzt,

Indeed. ;)

kopikia said...


Today Courage marine is plunging, any comments? I look at the financial statement, per you analysis, the balance is strong, cash rich, low debt. Too bad, they are now burning cash due to negative profitability.

However,i will continue monitor since a $118mil(NBV at Sept 30) business is selling at $88mil (market cap value @ 0.08/ share)now.Almost 34% discount.

AK71 said...

Hi kopikia,

I was looking at Courage Marine's share price as well and wondering about the same thing. :)

FA tells us this company's numbers are OK. What worries investors is probably the outlook for the global economy. Shipping is expected to suffer due to higher capacity and lower demand.

As for TA, the very thin trading volume would magnify the effects of any wild swings in prices. So, TA could be quite unreliable in such instances.

However, for what it is worth, looking at the charts is still the way to spot supports. The last low was 7.5c and Fibo lines show support at 7.2c. If price should go that low, I could add to my long position.

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