What next for Bumi?

We included Bumi Plc in our Dream Miners Stock Portfolio (link here – http://issuu.com/spreadbetmagazine/docs/spreadbet-magazine-v9_generic) which was released yesterday and it looks like the “market” is handing us an interesting opportunity. Here’s the explanation for the fall from todays Telegraph – ”the sell-off in Bumi continued as the company fell 54.2 – or 21.7pc – to 195.9p. It is rumoured that a loan to the coal group’s major shareholder, the Bakrie family, which is secured on Bumi shares, could be called in at the end of September. A spokesman for Bumi declined to comment.”

If the above is true then this presents investors with a potential gift as of course any pressure on the stock will and has pushed the price lower but, the valuation is becoming excessively disjointed from the fundamentals with the stock now trading at a shade over 2 times EV:EBITDA and around 3 times historic earnings. Given the recent history of friction between Natty and the Bakries I wonder whether Nat will take the stock the banks may sell from underneath the Bakries. One things for sure, Nattys no fool and I wouldn’t discount such a scenario as it would resolve a lot of issues for him. Of course Samin Tan may take the stock which would, if crossing the 30% threshold (he already holds just under 24%), trigger a full blown bid.

Here’s the chart over the last 10 days – one of the most oversold I’ve ever seen.

If the stock opens lower Monday we’re in with our hands full.