The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Cash rich, asset rich, making money and rewarding shareholders with good dividend even when basket prices are low.
Very happy to be holding and adding here with NAV well over 90p
DYOR
Very difficult to predict Rh prices as we have seen the last few years, just at the start of covid everyone was sleeping here and missing the rise in RH price getting too engrossed in Platinum lines and charts. Cash now is around $108m or 33p a share. On $7k Rh cash adjusted per of 5 equates to 81p on $4100 its 66p. I think this is as much as you can expect. I'm quite sure this will get pulled down to sub 65p and then let's see if SLP decides to buy any..........they have refrained so far from buying so why should you buy? Tach, they pulled out $3m in cap ex spend last quarter, that was the only reason for the slight cash build and i don't like management who say "excited about things" in results when it is actually very poor out there. To make this a wow valuation and a 50% possible gain you need Rh to be over $13k, at that level i can see some possibly being interested but the house broker has $5k for LT RH price and everyone is convinced electric is the future and china is very much behind electric cars. I live in a very popular location for Chinese tourists and they are not here, China is not spending.
Tach
I totally agree with you re the price of rhodium and harsher emission standards as I mentioned in my posting yesterday.
Edison have projected Rh prices of 6000 for 2024 and 7500 after that (2025+) they also have a target rice of 118p for SLP. Harsher emission standards in 2025 should lift the price to support and it really depends on a China recovery as well. Left field we have the exploration/ JV threads which aren’t priced into your estimates Bangrok which is fair enough as they are mainly potential-think there is value there though personally. Management are top draw in SLP though which counts for a lot, I’m happy to have a core holding and trade round the edges.
Bangrak
Thank you for providing this thought provoking posting to the group who follow and own shares in Sylvania Platinum.
Yes, RH is the driving force behind the huge profits in 2020-21 and obviously, that is used in ICE mostly from China. Forecasting what it will be is difficult but I'm seeing China's adoption of electric vehicles grow well each month and glass manufacturers use alternatives, i see no huge increased demand now or positive sentiment towards ICE/RH. I think the entire electrification is far-fetched due to the reliance on China for its Rare earth minerals & other costs, but Vietnam has large stores of these minerals so I'm watching what happens. I'm going to assume that the market gives SLP a continued PER of 6-8 max, I calculate the last 3 years' peaks have averaged 6.6. Rh I'm giving an average 2024 price of $5500 which gives me a PAT of $24m, eps of 9c so 72c or 60p, a base was forming at 65p and I think this will go there again maybe lower as investors are not seeing the value here or a bounce in RH. I totally get the thinking that cash here should make a difference but I'm not seeing the trading system's account for cash, even if I use a per of 4 and include cash i get 70p. One I'm invested in that demonstrates this forgotten cash theory is Costain where the net cash pile is 48p a share and the price now is 47p but it still makes a decent profit too. I see these as no-brainer valuations that will sort themselves out when people stop whinging on about "difficulties" in the economy. I genuinely think that a lot of people assume these people who work for IC and brokers have some kind of gift but in reality, they are just normal people, also i think people who are l;ess experianced think the data on thigs like stocko is gospel but as this has proven its only as good as the date it uses, and if that dadta is incorrect (like using $13k rh) you get nasty surprises.
Bangrak
I followed advice to buy shares in this company from various sources but most especially the Investors Chronicle and built a substantial holding in this company. I had not realised how important the price of Rhodium was in relation to its future profits. I am surprised that the price of the shares has only gone down by five pence when it going ex dividend is taken into account. What do you feel should be the correct price of the shares in this company please may I ask you. I could be wrong but I believe that the price of Rhodium in the longer term may be higher than we anticipate because I believe for multiple reasons that electric vehicles will not become the norm for most people so there will be a demand for Rhodium in ICE and hybrid vehicles. I believe its likely that emission standards will change and more rhodium will be needed in ICE and hybrid vehicles. I used the cash from the sale of part of my holding in Sylvania Platinum to buy more shares in Ramsdens. You may wish to have a look at this company as it seems a great buy at the current share price.
Owls you're welcome, and if it helped direct anyone else toward reality and not paid-for corporate & media BS then that's good. Here is some more house broker BS.....Ben the broker now dropped Rh to $7k from $13k but still has Rh as $5k longer-term. So that's $7k for the year and it's done $4k after 25% of it, and the best bit he has...............$52m PAT this year 2024 after they did $1.8m in Q1..........explain HTF you get $52m PAT with $7k RH ............why not check your calculations Ben before massaging them substantially upwards?
Well Platinum is up over 2% today
5p ex-div tomorrow will see another 6% fall but SP should stay in 70s IMHO.
GLA
Good opportunity to fill-up before tomorrows ex-dividend!
You won't be buying then
My target price to buy given the current basket price remains below 50 pence.
.
Bangrak
Thanks for your warnings I held 2.2 million shares in Sylvania Platinum but after reading your recent postings I sold over half of them at an average price of around 83p. Thank you for your valuable insight regarding this company.
$1.8m net profit is obviously well below what I had predicted but the sales adjustments brought it down so if you remove them the net would have been nearer the $5m I had predicted many weeks ago. You still have to remove cap-ex from this to get a true figure and consider that it's the interest generated on the cash balance that resulted in a cash increase. Plenty of warnings have been given here and I'm sure some will jump on any chance to add on the slightest increase in RH. The reality is this is not what it was and far too many people got misled by brokers and Simon who got it wrong. This is making no real profit down here and won't until there is a substantial change in RH prices.
This looks better than I had expected.
Good production numbers.
Operational gearing tells its own story when you compare bottom line profit and basket price for this quarter with those of the previous quarter.
Sylvania is still a relatively small company, with plenty of room to grow/expand. It's a bit of a leap of faith, since it depends on how well it is run. Thus far I was quite happy with how well the business is managed. The BOD has my full confidence and support.
Leadership counts.
As far as my take on the future is concerned: we would need to see a lot more will to build infrastructure to replace ICBs (so far it's lacklustre). There are many questions regarding the feasibility of moving the economy onto EVs in such short space of time. Supply of raw materials and the associated high environmental costs of their exploration are another.
I would not be surprised if eventually higher emission standards are rolles out, forcing existing ICBs to upgrade their catalytic converters as well as stronger emission controls on power plants (and other relevant parts of industry).
The time frame quoted by governments is unrealistic. Governments were never competent and efficient. Why, all of a sudden, should they be now?
So I keep holding and adding judiciously when prices are tempting.
Both interesting comments.
Personally I tend to trade minimally ( as I can make companies spike magically by selling!) - I just like to build positions and leave them unless there is clear indications that there is something amiss. I can see the basket price is way down and I expect much weaker results, but I categorise that as cyclic and thus I'm a 'hold' - I will take the divi this time. If what Lynx says comes to pass ( a drop back to 60/70 with Rh continues to climb back up then it will definitely be on my list to add at that price, but not at current price. I think some may be adding pre-exdiv which is helping the climb too.
I think investors are sunbathing on the railway, Lynx.
Can't believe it is back at 85 pence. Sure, Rh is up 25% in just a week or so, but the current Rh price is comparable to or marginally lower than the Q4 average when net profit was just 3.1musd. Pt and Pd both still about the same or marginally lower than Q4 average. Q1 profit will be trivial. Q2 at these levels might be 3musd. So let's be generous and say profit after tax of 10musd for the year to June 2024. Strip out the cash pile and this still trades on a much higher multiple than it ever has since I first invested. I'm not trying to annoy anyone with these comments and perhaps I've got things all wrong. I have no position right now. I'm happy to consider where I'm mistaken here.
Thoughts on how share price might move over the next couple of weeks? IMO, I think it will remain relatively stable at this price and we might then see a drop to high 60s / low 70s at the end of the month when it goes ex-divi and a modest (albeit expected) Q1 profit is announced based on a quarter with RH at $4.1k. However, if this happens, there could be a very attractive entry point .. particularly if RH does not revert downwards..
The increase in the price of Rhodium
Any idea what is causing the price to spike?
And Rh back over USD5,000. A bit of SP support from that after the Q1s if it really looks like the bottom is in.
Q1 results are Monday 30th October.