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  "documentTitle": "Olam International Ltd. (SGX:O32)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "presentationDate": "2012-11-27 00:00:00",
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  "notes": "This page is a text-heavy research note detailing why Olam is difficult to model, citing analyst estimate variance and opaque accounting practices.",
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      "text": "Analysts have no idea how to forecast Olam’s CapEx, and all seem to have greatly underestimated FY2013 levels based on Q1.",
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      "text": "Analysts have no idea how to forecast Olam's CapEx, and all seem to have greatly underestimated FY2013 levels based on Q1. The analysts generally drive their models off of two ratios that Olam frequently proffers as metrics by which to measure its business: Gross and Net Contributions. GC and NC are largely irrelevant in our view because they exclude Olam's significant – and quixotic – staff costs. Further, Olam has subtly changed the definitions of GC and NC from one fiscal year to the next.",
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      "text": "Analysts' annual revenue and earnings estimate ranges are substantial, and indicate that analysts do not know how to model the Company. Despite already being in Q2 2013, the 19 estimates for FY2013 revenue range from S$18.2 billion to S$23.3 billion (28.0% greater). The 19 FY2014 ranges are even greater – from S$19.4 billion to S$27.8 billion (43.3% greater). Only two analysts had ventured guesses at Q1 2013 numbers, which is yet another sign that they do not know how to model the Company. Interestingly, Olam's reported Q1 2013 revenue of S$4.7 billion beat the average of the estimates by 34.5%; yet, the reported EPS exactly met the two-analyst consensus of S$0.016, with the help of fair value and biological asset gains, which it took for the first time ever in a Q1 period.",
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      "text": "Olam's seemingly outsized Level 3 derivatives holdings are potentially risky, and are impossible for outsiders to analyze (in terms of risk and accuracy of valuations). The tremendous fluctuations in Olam's income tax rate indicate that the composition of its profits changes substantially from year-to-year, which certainly makes it hard to understand the business.",
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      "text": "“Complex business makes Olam vulnerable,” Financial Times, November 21, 2012. — Financial Times",
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      "text": "55 “Complex business makes Olam vulnerable,” Financial Times, November 21, 2012.",
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