LLUB for short term?

mtsfernando · 1 LLUB for short term? Wed Mar 21, 2018 4:19 pm

mtsfernando

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LLUB has dropped to Rs.107.8.
Speculating that the dividends for FY2018 will remain at Rs.12, the current dividend yield is 11.2%. The stock is undervalued and seems like a good investment at first glance.
Any news on why the prices dropped so low? Any affect from crude oil price increases?

MRF · 2 Re: LLUB for short term? Wed Mar 21, 2018 10:09 pm

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The price dropped is due to the fall in profits of the Company as per their FS

EquityChamp · 3 Re: LLUB for short term? Fri Mar 23, 2018 7:35 pm

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The price can drop towards 105-104 range because foreign players are shedding due to pressured financials. If you collect based on long term view as well as DY then try to collect at current levels. However keep in mind that the bearishness of the stock is still intact.

point · 4 Re: LLUB for short term? Sat Mar 24, 2018 11:46 am

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Also keep your mind their main business future and mother company performances. A foreign company holds no big assets in a country they pay profits as dividends so no asset value in a liquidation

EquityChamp · 5 Re: LLUB for short term? Wed Mar 28, 2018 7:09 am

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If you want to select LLUB as a medium term investment better to wait till you see some stability in their earnings. Because the stock is yet to stabilise which means more downward pressure exists.

EquityChamp · 6 Re: LLUB for short term? Tue Apr 03, 2018 2:18 pm

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The share reached a new 52W low today hitting 104/-. Chances are high to see even 100/- on this sentiment. So better to continue waiting.

EquityChamp · 7 Re: LLUB for short term? Mon Apr 09, 2018 9:42 am

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EquityChamp wrote:The share reached a new 52W low today hitting 104/-. Chances are high to see even 100/- on this sentiment. So better to continue waiting.

LLUB has reached 99.9 on 6th April. So those who continue to watch can be smiling with a sigh of relief. Let's wait a bit more and see whether there is any reverse in the market sentiment happening. Basketball

thankrishan · 8 Re: LLUB for short term? Tue Apr 10, 2018 12:11 pm

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This is a good buy even at this price, Since this is a dividend rich stock and the current price is really cheap. But i am sure this will fall further low due to the market sentiment.

Guess this will fall below 90 levels in short term.

EquityChamp · 9 Re: LLUB for short term? Wed Apr 11, 2018 7:08 am

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thankrishan wrote:This is a good buy even at this price, Since this is a dividend rich stock and the current price is really cheap. But i am sure this will fall further low due to the market sentiment.

Guess this will fall below 90 levels in short term.

Possible scenario.

kadik · 10 Re: LLUB for short term? Wed Apr 11, 2018 12:41 pm

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We cant expect same devidents as last year. They dont have much cash in hand too.
correct me if i'm wrong.

DS Wijesinghe · 11 Re: LLUB for short term? Wed Apr 11, 2018 1:14 pm

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Chevron Sri Lanka unit says competition increasing, margins eroding

ECONOMYNEXT – Chevron Lubricants Lanka has said profit margins were getting squeezed with intensifying competition and rising costs and the industry struggling with excess blending capacity.

Net profit at Chevron’s Sri Lanka unit fell 26% to Rs. 2.6 billion in 2017 from a year ago.

“The decline in net earnings was mainly due to margin erosion as a result of increased input costs and decline in volumes due to intense competition,” Rochna Kaul, Chevron Lankan chairperson told shareholders in the firm’s annual report.

Managing Director Kishu Gomes said Chevron Lubricants Lanka’s volumes and revenues dropped by 10% and 9%, respectively in 2017.

“The decline in volumes was primarily a result of the decline in sales in the domestic retail market, while we recorded healthy growth stemming from exports to Bangladesh,” he said.

Sri Lanka’s lubricant industry is mature and competitive with thirteen players and three blending plants operating with excess capacity, Gomes said.

“The government may issue additional licenses during the year, which will further change the competitive landscape.”

The steep rise in base oil cost, compounded by the depreciation of the rupee against the US dollar and the gradual increase in commodity prices, caused significant inflationary pressure on costs during the year, Gomes said.

To counter the mounting cost pressure, the company increased prices.

However, this strategy was not effective in the retail market, as consumer disposable income was compressed by the rise in inflation, Gomes said.

Prolonged droughts and floods affecting several districts disrupted the regular momentum of economic activities during the year, which also curtailed lubricant consumption, he added.

“The rise in consumer inflation and disruption of economic activities due to inclement weather may have also resulted in longer oil drain intervals than usual amongst a segment of consumers.”
(COLOMBO, April 10, 2018)