CIMB doesn’t like commodity plays and has made negative comments abt midstream commodity supply chain players Mewah, Noble and Olam.
Not time to buy yet: Noble is trading at its eight-year historical mean, while Olam is trading at 1.5 standard deviations below its mean and Mewah is trading at 2.5 standard deviations below mean. Despite their more modest valuations, we believe it is too early to turn bullish on this sector. Consensus estimates do not appear to have fully reflected their earnings risks, in our view. Our FY12 earnings per share estimates for all three stocks are 4-46 per cent below consensus. Further downgrades by the Street may be de-rating catalysts.