broker report, page-3

I do have the report, which is as at 7 Sept 2009. Has a target price of 72 cents. At the time the share price was 83 cents. Has a Hold recommendation.

Says the value NMS on a DCF. Says they expect NMS to trade at a discount to its more established peers until its track record is established. Key risks to their target price are listed as includinge underperforming acquisitions, poor integration, vessel underutilisation, dilutionary and cashflow impact of earnouts and key man risk. Upside risks include better than expected returns from new vessels, acquisition activity and large contract wins.

Looking at the financials, normalised EPS is forecast to be 6.8 cents in 2010, 7.1 cents in 2011 and 7.8 cents in 2012. With such a conservative growth forecast, no wonder why the DCF is 72 cents! Not sure how helpful a conservative forecast is if it is unrealistic? Just as bad in my opinion as providing too aggressive a forecast.

Just for the record- I sold out my position, but not because I don't think Neptune is a great company with a great future. I just think theres more risk being in the stock market now than over the last 6 months, and will get back into Neptune when the long term direction of the overall market becomes clearer.