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You can tell ‘em I said it :)
Price is looking strong. I'm reminded of my ski trip, and on the journey to the summit on a coach winding up the mountain, the views were stunning! Enjoy the ride:)
A bit of profit taking from the 5-10 percent profit day traders. Werent many, so looks like the next leg up could be starting early. I think the "handle" will come probbaly around the 120p level, before we go on the offensive to the 150p level. Break on that, and the summit is wide open for the taking.
Haha come on baby into the blue sweetcheeks :)
Thanks for the Rh update – yes, at 14,200 that’s now just a measly $100 below the prior (absolutely puny) prior Rh high of 14,300 on the 7/8th Oct.
Bear in mind, not a single prior high has been surpassed by Rh since May, not one!
– the very definition of a bear market. And still to be proven by Rh.
So it bears repeating, of all the failed breakout attempts by SLP’s SP this is the very first time since May, when this retrace commenced, that the SP has succeeded in breaching its first prior high of circa early September.
Clearly, the SP is now inching slowly ahead of Rh events, suggesting to me the market is re-evaluating its stance on the SP as the market gains a more nuanced expectation for the future of Rh & the chip crisis.
Rh, first has to “prove” it’s following likewise, by rising higher than that puny Oct7/8th high of 14,300 and march on the genuine previous swing high of late Sept which was at 14,500
It’s quite a thing to say the SP is moving ahead of Rh recovery since it collapsed from the ATH in May, but that’s exactly the case currently!
Rho up smidge again today.
£1.10+ end of week.
Shake out done. Orders clearly filled. Back up we go. Textbook.
I just added more
1 small volume sell takes the SP from £1.08 to £1.03? Have a word.... :)
Utter manipulation! Seen it so many times. Zero reasoning behind it other than shaking out weaker holders. My god. Disgraceful! Haha.
sp is looking weak today .....just a blip I guess
Fully expecting a move over £1.10 this week. Let's see :)
There are a few, but not for the best reasons.
Ratios, valuations etc... are very useful filters. But it's important to look at the business and wanting to be part of that. Phil Fisher has a great body of work on qualitative aspects of businesses. And in the end, that's what matters the most.
Setbacks happen. Environments change.
To navigate capricious waters, one needs a stellar crew on a solid ship. The P/E is just the starting point.
Quality matters as much as does valuation.
Not many out there with P/E 2, enviable.
Valuations are a futile business and it highly depends on the buyer for whom the valuation is made.
You can use ratios to compare and estimate, you can use DCF or whatever else (I use a modified version of the Graham formula). Whatever one does, the resulting figure will be a guess.
That's why I prefer to have a margin of safety. Usually, 30-50% -- which incidentally is my guaranteed rate of return when I'm right, and a sensible protection against downside when I'm wrong.
Thus said, if one cannot see that a business that is debt free, has 100+m cash and trades at a P/E around 2 has at least the margin of safety mentioned, well then I am truly perplexed.
P/E is a useful metric. Because SLP has zero debt and lot of cash, the P/E ratio is even better value than the numbers suggest. For example, lets says company x has the exact same price and earnings as SLP. However, X has $ 5million in the bank and $30 million in debt, where as SLP has zero debt and $106(+20)=126 million in the bank. They both will have the same P/E ratio. P/E doesnt take into account debt or cash. Thats why the enterprise valuation is better in SLP case to see true value, as it unsually high cash balance and zero debt. But it is important to compare P/E against peers to see if the price relative to earnings is fair.
Lets look at wages. Lets say in the UK, the average wage for a cleaner is 8 pounds/hour. If cleaner Bob gets 4 pounds an hour, he knows that he is being underpaid on average, and should ask for a pay rise. Cleaner Jill, gets 12 pounds and hour so she's best to keep her mouth shut. Now adminstrator Chris, gets 12 pound an hour also. He gets paid the same as Jill, so he's happy? No because the avearage wage for an adminstrator is 15 pounds and hour. You get my drift?
So SLP's P/E is below its peers by a significant amount. However, the risk with SLP is the volatility of RHO. Thats why the current valuation is where it is. There are also some theorists who believe that PGM will be redundant in the near future. That also contributes to the low valuation However, we know that Rho's prices is linked with car sales, which in turn is linked to microchip shortages, so i this case, looking at the RHO prices daily, one can in fact predict in advance where SLP's hare price is going to go. That the beauty of this share, it takes seconds to check the RHo prices, and if it were to break key support levels I woud sell, but its looks like the downward trend is reversing to an uptrend- not quite confirmed yet but close.
However , as with any share, something unexpected can happen that could tank the share price, but that applies to all shares. Thats why, investing is not zero risk.
I tend to follow the price, using fundmental and technicals, as a guide, rather that trying to predict it. You can get an idea of where a price should be though using price momentum, and resistance and support levels, and looking at the balance sheets. However, sentiment and where we are in a market cycle(bull market, bear market, sideways market etc..) has a powerful hidden influence on the prices of all shares. A rising tide lifts all boats, just as falling tide does the opposite,
(Concludes) > > >
. . . The truth is no one knows for sure. That's the whole point. Was it Bangrak who posted recently of valuing the SP as only being worth £1.20?
I think he was using DCF but the only common thread is that all DCF users will come up with entirely differing valuations from each other but are united in dismissing everyone else's!
The difference between you and marineclark, is that he is consistent - whilst you are inconsistent. Game, set and match to marineclark's viewpoint.
I give consideration to his views - none to your DCF views.
PS. If it takes a year for £1.50 to arrive as you prophesise, I will of course apologise.
(No pressure on marineclark then who says sooner rather than your later :) :)
". . . -£6 is just being silly IMHO with SWS using a DCF log based on sky high base rather than normalised earnings and applying silly growth rates and even sillier discount rates. . . "
- Poppyc@ck and balderdash! No one knows anything for certain, least of all you.
And Quiggers @
" PE ratios have nothing to do with valuation/fair value/ intrinsic value.
PE ratio is pricing and just one of many such pricing formulae. "
- Utter baloney, a total misunderstanding of P/E's,
I find P/E ratio's best used to discover where the market places a particular stock in relation to all it's competitors within its own industry. In other words it assists in revealing current market SENTIMENT towards a stock. And that's invaluable!
DCF valuations are extremely unreliable, overrated, and many authoritative articles on the internet citing DCF as past its sell-by-date for reliability.
I mean, what the hell is this obsession with using 60% as the discount rate otherwise if not, you'll go straight to hell?
Who told you to use 60% as the life or death discount rate %?
Did god whisper it in your ear?
Did Buffett phone you to make sure you only use that?
The end result is that since your first post on SLP (in July I think) you've changed your DCF valuation constantly, never adhering to your own valuations for more than 10 minutes, and yet you chirp on as if only your way matters, and no other.
Here's a sample of what I'm referring to -
Quiggers 13th July @
" fk it. Im all in. Bought the dip. Now 40% of portfolio up from 30%.
When u believe... you believe.
200p is there.
Nothing has changed. "
- So 200p, is that your evaluation then in July, just gone? And to back that up, you later reinforce your certainty 3 days later on the 16th July with:
" Intrinsic value can change overnight. But not the case here. SLP still a 200+p stock and it doesn't need Rh to be at these current levels either. "
- Okay I get it - 200p it is, but with a "+".
(Then 2 days later you adjust your stance to now declare):
" I arrive at DCF equity valuation of £1.76 on the following assumptions: . . ."
- What? After twice citing 200 your beloved DCF is still reliable and now offers up £1.76?
Well, okay £1.76 it is then.
Then on 18th July you demonstrate why all DCF valuations are so unreliable by posting:
" One can always increase to say 15% to 20% in which case the intrinsic value will be lower, around the 1.40 mark as I see it "
Hmmm as you 'see it'. But this week you now see it as currently £1.50? LOL! Can't keep up.
So with that inbuilt unreliability - why so certain, and so dismissive of others opinions?
The truth is no one knows for sure. That's the whole point. Was it Bangrak who posted recently of valuing the SP as only being worth £1.20?
I think he was using DCF but the only common thread is that all DCF users will come up with entirely differing valuations from each other
No worries Quiggers. I disgree with you but my track record has been pretty good the last 12 months. This will be multibagger number 7 for me. I havent always been right with every share, but when the price doesnt react the way I expect or if the price sits around doing nothing for too long, I sell for better opportunties. Its helps manage my risk way.
Bear in mind, that SLP is a small cap, though approaching the lower end of midcap, and small caps often multibagger in high numbers compared large caps to you refer to in the S&P 500 index which at best will double. SLP has alrady ten bagged for some people who bought in early. A two or three bagger from current prices is not so difficult a proposition, when RHO prices start go back up to previous highs. All IMO. DYOR.
28% off at the moment. So I`d be happy to take that return in 12 months given that the average return of the best performing index - the S&P 500, is (on average) over the last 50 years, about 10% (which also smashes the vast majority of hedge funds)
PE ratios have nothing to do with valuation/fair value/ intrinsic value.
PE ratio is pricing and just one of many such pricing formulae.
150p in one year, crikey, its almost 150p already. As RHo prices recover the price will return to 150p and above, possible even by next month, given the recent rally from bottoms. The 50 percent was due to profit taking and drop in RHo prices. Now that profit taking is out of the way and we have formed a new, higher base, 200p is in 3 to six months, IMO. 150p in one years is silly.
We had discussion about PE ratios. 3 pounds by industry standard is fair value., given the volalility risk of PGM. Current pricing assumes total collapse of PGM prices.
Any takers on seeing higher than £6 ? Is that the new record valuation?
-£6 is just being silly IMHO with SWS using a DCF log based on sky high base rather than normalised earnings and applying silly growth rates and even sillier discount rates. It is GIGO.
I`m hoping for 150p within a year.
Tiger, I hope everyone is aware of the movements of all 3 over the past few days :)
Palladium, Platinum and Rhodium all up relatively significantly. I'm fully expecting this to continue hard into next year now. Hence my December 31st prediction :)
slight tickle on rhodium, that should please stoodio, get the vpn warmed up :-)
Tiger, completely agree. And man it's like a broken record, BUT, I'll say it again. SLP grease the palms handsomely of their community and rural workers, all above board and accounted for.
Man, you cannot beat simply 'doing good by people'. It always pays off. And SLP do it better than most. And look at what's in our cash till :)
oh, i have no concerns, quite the opposite, apart from russia, no country i wont invest in
country risk (esp africa) wildly overdone, gives us bargains
money derived from africa exactly same as that from sheffield (and damn sight more attractive)