Rhigos
05 Feb 2016
Re: Bankruptcy risk, Altman Z number sporty investor,Yesterdays sharp rise due to fall in value of US dollar compared against other currencies. See my post on RIO board for more info.A week or so ago I contacted ShareScope because the data they were showing (a subscription service for software and data) for VED did not seem to make any sense. They looked into this and last week I got this reply:"I've had a look at the profit data for Vedanta Resources and, although the difference between the reported and the normalised post-tax profit values seems absurdly high upon first look, there is a perfectly reasonable explanation for it.The post-tax loss reported by Vedanta (£m -2557.87) is mostly down to a huge write-off of their assets (around £b 4.6). As the normalization process exists to strip reported profits of extraordinary items, once the asset write-off is removed the normalised profit becomes £m 3431.59, which amounts to the profit made by everyday operations (in Vedanta's case, selling ore)In most cases the normalization process tends to strip a company of extraordinary profits (for example from the sale of an office block) as this would give the false impression of a huge increase in operational earnings, but in Vedanta's case is shows the opposite."I believe the huge exceptional write down may make application of Altman X number inappropriate. I do not think there is a high risk of VED going under but DYOR. SP however might fall again. The SP fall in the few months can be explained by the very large write-down of around £4.6 billion. At yesterday's close Market Capitalization was only £622m, to put size of write-down in perspective. ShareScope gives no brokers recommendation which is a bit ominous for a FTSE mid 250 company.I think SP will double or more this year but I may be over optimistic because VED by far my biggest looser.
sporty investor
04 Feb 2016
Re: Bankruptcy risk, Altman Z number Rhigos, Is the Altman Z number analysis revealing anything new following the recent set{s) of results from the company? Thanks in advance.
sporty investor
04 Feb 2016
Reason for today's rise? Is it overall sector improvement? or, any favourable news about retrospective taxation in India?Even cairn energy has shown some modest rise.
sporty investor
28 Jan 2016
Vedanta Limited Q3 results Any analysts here able to comment on the Vedanta limited's (subsidiary of Vedanta) results, announced today? Some positive momentum in the sp this morning. As per the RNS on 12-01-2016, production results scheduled for tomorrow.
sporty investor
27 Jan 2016
Q3 production update to be released in two days. Hopefully, encouraging to the present share price. Positive news about Indian economy bringing any positive impact on Vedanta?
oldjoe1
22 Jan 2016
Re: VED, Says OIL AS Bottomed............. VED VeantaWell this broker was bullish on the stock ..........08 Jan Haitong Securities Buy 227.05 703.00 351.00 ReiteratesSP Target 351p
oldjoe1
22 Jan 2016
VED, Says OIL AS Bottomed............. VED Vedanta Resources.[link] has ‘definitely’ bottomed: Vedanta Resources</b>Katy Barnato1 Hour AgoCNBC.comAs crude oil prices rally back above $30 per barrel, the chairman of India's Vedanta Resources told CNBC that the only way for the commodity was up. "Definitely we are at the bottom, but in India a lot more has to happen. The (new) Modi government has come and people have a lot of expectations. The sense of urgency has come," Anil Agarwal, the group chairman of the London-listed commodities giant told CNBC on Friday from the World Economic Forum in Davos, Switzerland.Agarwal added that low prices were "hurting everybody," but that Vedanta was advantaged by being diversified across commodities including oil, copper, iron ore and aluminium. U.S. light (WTI) crude futures rallied by around 4 percent early on Friday to trade above $30 a barrel, having plummeted to 2003 lows below $27 a barrel on Wednesday.Oil prices have plummeted since mid-2014 by around 70 percent due to a worsening supply-demand gap. The U.S. and Iraq have increasedproduction, while the OPEC group of oil-producing countries has held supply. Meanwhile, demand growth for energy has slowed, largely due to the deceleration in the Chinese economy.The International Energy Agency warned on Tuesday that continued oversupply would put extra strain on the market.The rout in oil prices has hit commodity producers like Vedanta Resources hard. Its share price has declined by around 22 percent this year.Vedanta's oil and gas operations comprise of the assets of Cairn India in India, Sri Lanka and South Africa.Vedanta Resources has revenue of around $13 billion.
sporty investor
11 Jan 2016
Is the slide ending any time soon? Ved sp is declining significantly, almost every trading week. Surprisingly, Indian economy is one of those which are doing okay. And, Vedanta's majority businesses are in India. Is the present sp, a real indicator of the true value of its assets? Time for the company to clarify.
shangha1
11 Jan 2016
Re: Bankruptcy risk, Altman Z number Thanks for this useful information.
Rhigos
04 Nov 2015
Re: Bankruptcy risk, Altman Z number LINTON5,"Your not Appleby on Lse are yi,"I am not Appleby and not trying to drive SP down as I am long VED. I was doing some research looking for shares to buy and decided it was worth looking at Altman Z to reduce risk of buying a company that goes bankrupt. Happened to notice that VED had a very low (bad) Altman Z score. Later found that normal 5 factor criteria only applicable to manufacturing companies. Even with modified 4 factor Z score VED is risky due to level debt. The flip side is that if things go well for VED SP will shoot up.
LINTON5
04 Nov 2015
Re: Bankruptcy risk, Altman Z number Your not Appleby on Lse are yi,he's trying like a bear to get price down to buy in.one of the worst type traders going. Lost all respect for him
Rhigos
28 Oct 2015
Re: Bankruptcy risk, Altman Z number meisterx,A fishy comment about Altman's Z-score. Edward Altman who was Assistant Professor of Finance at New York University when he developed the measure.[link]
meisterx
17 Oct 2015
Re: Bankruptcy risk, Altman Z number What a load of carp.
Rhigos
15 Oct 2015
Re: Bankruptcy risk, Altman Z number It has been pointed out to me that standard 5 term Altman Z number is not very suitable for non-manufacturing companies such as miners and that modified 4 variable version more suitable:[link] calculated score using modified weighting and 4 variables (missing out 5th variable sales, turnover / total assets) and got modified Altman x number of 1.687 which is still in danger zone but a lot better than 0.191 the 5 variable one.
Rhigos
14 Oct 2015
Bankruptcy risk, Altman Z number Altman Z number puts a figure on bankruptcy risk:[link] <1.8CAUTION 1.8 to 3.0SAFE >3.0Following (discredited) story of GLEN possibly not having any value for investors I looked up the Altman Z number for GLEN which at 1.82 was in the caution range. I am aware that VED has a scary amount of debt so I looked up its Altman Z number and it is very worryingly low at 0.191. This suggests if any adverse situations damage profits SP will plummet. Servicing debt must take up a lot of the companies profits. Gearing is around 1,000%, on the plus side ROCE is a healthy 13.4% and as a result of all the borrowed capital ROE is a huge 196.5%.Motleys Fool article suggested if Cairn India deal does not go through VED will be in risk of bankruptcy.VED has a very high risk of bankruptcy, according to Atman Z measure . IF nothing goes wrong I can see SP shooting up- but - IMO definitely a punt share not for widows and children.In future I am going steer clear of shares in any company with high debt.
