Wolf Money(Wilmar International)

 

I took a position in Wilmar International. All the bad news seem to be pouring at the company. From allegation of corruption in China which the company has denied to industrial actions at Wilmar Sugar Australia. There is no shortage of bad news at Wilmar.  

Two quick points. I am buying Wilmar due to the appointment of George Yeo as their independent director. The appointment gives Wilmar great geopolitical insight in the countries they operate. George Yeo, our ex-foreign minister has bought shares in the company at an average price of $3.105 as disclosed on the 7th June announcement. Although he is yet to be proven as a great stock pundit but I believe he will add value to Wilmar’s board greatly. 

(The SGD 25b stake in Yihai Kerry is more than the market cap of Wilmar International)

The second point, Wilmar has extensive reach to two most important markets of the 21st century. India via listed Adani Wilmar and China via listed Yihai Kerry Arawana Food Group(YKA). YKA has a market cap of more than SGD 29b which Wilmar owns 89% of the company. The stake alone is worth more than SGD 25b vs 19.3b market cap of its listed Singapore parent. Effectively one is getting YKA at a discount and the rest of Palm Oil and Sugar businesses, Wilmar Adani and other subsidiaries for free without consideration for its debt. The high debt which some analysts raise might mistook the company as a debt laden company but most of the debts are trade financing related for purchasing of commodities. Commodities are as good as cash in the eyes of management. 

I can’t proclaim to know the complexity of Wilmar’s business but the stock is trading close to 5 year low. It does look cheap on first glance. Share is trading at 9x p/e with a price to book ratio of 0.73x. It appears cheap enough for me to start an initial purchase. The stock comes with a 5.5% yield at the time of writing.  

Major support for the stock at 3.07 and $3.00(green line). Trading range between $3.00 to $4 over the past decade.

(Support at $3 held up well over the past decade)

Please consider following us on telegram for the latest update on Lone Wolf investor by clicking on the link below. No form filling, no payment required, no collection of data, no data mining, no hard selling, no obligation. 

https://t.me/joinchat/oCgkD3sQFRMzMWM1

Disclaimers 

All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.