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Vard Holdings: Bloodbath.

Wednesday, October 15, 2014

When a reader asked if I might be nibbling at Vard Holdings, I took one look at the charts and said I would need dentures made of titanium before I dare think about it. See comment: here.

If we look at the weekly chart, we will gain insight into why share price hit 63c before rebounding. That is where we find the 150% Fibo, a relatively strong golden ratio. With share price closing above the 138.2% Fibo, we might see immediate support forming at 67c.

Vard Holdings: Weekly chart.

However, with such a high volume sell down today, there could be a follow through and, in such an instance, the question to ask is whether we might see the 161.8% Fibo tested and that is, approximately, at 59c.

Weekly momentum oscillators, and I am looking at the CMF and the MACD, are not supportive of a reversal. With lower lows looking set to form, unless there is a dramatic reversal with higher volumes on buy ups in the next two sessions, we could see a lower share price in due course. Any near term rebound in share price would probably be selling opportunities for both stale bulls and short sellers.


There are many types of mushrooms in the woods. This mushroom, I am not able to tell with confidence if it is edible or not. So, I am not nibbling.

When in doubt, I stay out. I have a delicate stomach.

Related post:
Vard Holdings: Initiating coverage.

17 comments:

pf said...

I was burnt by this stock twice. Sigh.
Once a yr or so ago and another time early this yr. Dun dare to play le... lol.

AK71 said...

Hi pf,

Well, since your motivation was to trade the stock and it was just play money, I guess you did not have too big an exposure. Sometimes, gambles pay off. Sometimes, they don't. ;p

Sillyinvestor said...

The bloodbath is caused by profit guidance issued by Vard.

When the actual report is out, we can then asess how serious the cost overrun is.

This year dividends fly fly away liao.

However, maybe when all news is bad, Brazil then Europe and Romania, it is time to dig deep to see if the crisis will past? It is owned by italy a gong u know.

Btw, I am not vested. Will look when there is blood, that's all. Happen to be already looking before blood spill.

AK71 said...

Hi Mike,

I made some money here many moons ago. I wasn't sure if the problems in their Brazilian yards were temporary or more enduring. So, I decided not to hold.

It seems that they have problems in their European yards now as well. -.-"

James Wong said...

The twin effects from the profit guidance and the weakening oil price/outlook of oil had caused an over the top widespread panic on this stock.

I agree with Sillyinvestor that we are unable to ascertain the seriousness of the cost overrun.

I bought into Vard early this year at $0.81 before the orders started to rack in. I did not liquidate my shares back in Jun 2014 as I felt that the company would have had a great run till the end of the year.

Anyway, I'm still silently optimistic with this stock as I did experience how this stock went up steadily from its low. Perhaps I might trim my TP after weighing in the cost overrun.

In my opinon, it might be a good time to enter for those who are willing to bear with it for a little while.

AK71 said...

Hi James,

Thanks for sharing your perspective on Vard Holdings.

I hope that results will not be as bad as feared as I do know of people, including fellow bloggers, who are heavily invested.

teny123 said...

hi ak71,
Sorry abit out of topics, How about triyards?

AK71 said...

Hi teny,

I don't know about Triyards' fundamentals but in terms of TA, an important long term support is at 67c. If that should break, we could see a retest of lows seen just a few months ago.

E H said...

Brazilian economy is in a funk. I wonder if KepCorp and Vard made the right decision to move to Brazil in such a big way.

Sillyinvestor said...

Hi AK,

Vard has heavily impaired for Brazil operations, so highly unlikely further impairment is needed, they have leftover sums from
Last year and made further provisions.

Too bad, the buck now move on Europe and Romania which is their home turf, what excuses do they have ???

Also, they tried to solve the Brazil labour issue by sending more expatriatea over...

Now they need good hands at Europe too LOL.


Anyway, still waiting for the QR

AK71 said...

Hi Mike,

Actually, I wonder at the capabilities or even the motivations of the owner and management. They don't seem to be very competent to me. -.-"

Janice said...

Hi ASSI,

I would like to find out whether are you still holding on to Yongnam & Marco Polo?

I am also holding on to these two counters.

How do you determine when to cut loss or when to hold?

Thanks for your advice

AK71 said...

Hi Janice,

You could be interested in this blog post:
Managing exposure in AK's investment portfolio.

AK71 said...

Vard Holdings' second-quarter earnings took a dive amid a slowdown in activity due to the slump in crude oil prices.

Net profit for the three months ended June 30, 2015, plunged 58.6 per cent year on year to 58 million Norwegian kroner, the company said on Tuesday.

Translated into Singapore dollars as at June 30, the drop was even steeper - the Q2 earnings worked out to S$10 million, a 64.3 per cent plunge over the same period, the company said on Wednesday.

Earnings per share fell 64.1 per cent from the previous year to 0.85 Singapore cents.

Vard shares were down half a cent to finish at S$0.485 on Tuesday.


Source:
http://www.businesstimes.com.sg//companies-markets/vard-holdings-q2-earnings-plunge-586

James L said...

Hi AK

Vard has extended deadline for its tender offer of $0.25. As this offer has turned unconditional and will expire by 26 Jan, may I ask what will happen if one does not accept this offer?

Thanks!

James L said...

Hi AK

Vard holding exit offer has now turned unconditional. Would you be able to talk to yourself what this means, and does it mean that we should accept the offer?

Appreciate your advice. Thanks!

AK71 said...

Hi James,

It has been a long time since I was a shareholder. I have no idea what is going on now.

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