BUMI QUICK SNIPPET – PRICE TARGET RAISED TO 300P

UPDATE – TRADING BUY PARTIAL PROFIT TAKE. GIVEN THE LARGE RETURNS OVER THE LAST 2 DAYS, AND IN KEEPING WITH OUR PRUDENT CAPITAL MANAGEMENT APPROACH, WE REDUCE OUR POSITION IN BUMI BY 50% TODAY AT A PRICE OF 278P. EFFECTIVELY LOWERING OUR COST PRICE ON THE BALANCE TO 90P.

I hope readers made good money on Bumi in recent days. 

This is one stock to hold onto and not be tempted to take the current very healthy turn in our opinion. The basis of our original mining sector recommendation has changed given the news this morning but a quick back of the envelope calculation based on current values of PT Bumi Res & PT Berau gives a value approaching 300p for the assets. With a control premium requirement of 20% then shareholders could look for 360p as a cash shell, debt adjust rump value. Discount this back at a high 10% rate over the next 6 months months and 330p is a fair value.

170p was manna from heaven, 200p this morning a pre Xmas gift and currently at 249p still a buy in our book.

Take a look at our record on the About Us page – this year we have achieved over a 95% (that’s right 95%!) success rate on our Calls.

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