Sound Energy #SOU provides an update on a potential farm-in and operational progress in Morocco Watch Now
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I'm still seeing the classic pattern of a large institutional sale hitting a small company's share price.
First, there was the drip feed at a fairly high price to sell off, say, 20% of the holding at a decent price, then the big dump as the buyer searched for volume to offload the bulk of their shares (that was Thursday and Friday last week), and now we have smaller sells into a rising price as the seller gets rid of the last 20% or so of their stake.
There may have been some front-running shorting as well, if news of the selling leaked out into the market too early. If so, the bounce back should be quicker and steeper.
Velo - thing is - this isnt a platinum company, this is a Rhodium + Palladium business mostly from % of revenue by $
This is one of the highest Rh basket % assets out there
TBTT - agreed - changing name to Sylvania Rhodium would probably cause the price to rocket
Adding 'blockchain' would probably yield a 10x! lol
When will the market wake up to this share??
assuming this was lowered to take a large sell order, i wonder if it will snap back fairly quickly or be walked up all nice and gentle....
Crazy short term market activity.
Just look at the Mcap and that cash in the bank.
Sit tight and just have patience.
This sp will shift up violently next, as Covid eventually declines.
I still wonder if a simple name change to Sylvania Rhodium wouldn't send the share price soaring...
Then, again, given the way of the world, maybe Rhodium's name will be changed to something else first.
Reading some posts below there does seem to be considerable focus on Platinum and in a previous post, i said that I too was a Platinum focused observer until I was aware of the prill split and Rhodium prices, i wonder how many are like this?. The dip on the 24th in Platinum & Palladium could explain the dip in SLP being linked to some standard PGM metals trading algorithm, but surely the masses are not calculating value here on half of the production and ignoring the Rhodium?
68000oz at $800oz would give you 39p using a PE of 6, 68000oz at $2050 is where we really are and that is 80p+ area if you assume 60% deductions and 272m shares. If this was selling oil or gold it would be a £300-350m cap with its profits.
Why 38p other than a 50% fib retrace and 25% fallback from the top?........The prill split is Platinum 62%, Palladium 25%, Rhodium 13%. Therefore for each PGM oz that is sold $1073 is Rhodium $478 is palladium and $499 Platinum, each oz gives $2050 and this is a current price. Half the income now comes from Rhodium, if you take out all the rhodium production and apply a PE of 5 to Plat & Pall the SP should be 39p and its 38p. If you apply the platinum price only to the entire production you get the same 38p....Surely everyone knows the prill split here and this isn't just some manufactured retrace? 82p on a PE of 5.
One things for sure it ranks awesome on nearly all accounts on Stockpedias system. It passes IC's screen test to. Whether its price to book or PEG this is a really great value share as it is and any people worried just need to hang tight for industrial demand to kick in OR the big gun corporate value investors/ fund managers etc to swoop in. I think what is also interesting is no director, whether it be mid March or now has dived in for shares. Wonder why that may be.
Neah, not buying that as a causation, PDiddy.
For the last 4 years SLP's SP has rocketed - just rocketed.
Guess what the price of platinum has done in that exact time period?
- It's fallen year after year, non-stop.
Yes, it increased substantially from summer 2019 to Jan this year - (for half a year) but that only brought it back up to where it was at the beginning of 2018 and not the summer high of 2016.
So 4 years of unimpressive platinum price action, falling overall, from start to finish of that time period - yet simply stellar SP performance from SLP.
In fact the decline in platinum is far worse than just the last 4 years. It rose from the 1970's to finally peak at an all time high in 2008 - 12 years ago! At circa something well over $2,000+
Thereafter right to this day, it has not ceased falling. It has lots of little bullish rallies yes, but every single one has been short lived. Not one of those rallies since 2008 has ever climbed back to the 2008 price. Each time it fails to do so and ends with lower highs and lower lows.
Before 2008 the price had been on a 40 year tear, upwards. That came to a halt in 2008. That was it. It's been falling ever since. The rallies in platinum price are short lived and never rise back to previous highs, always peaking on lower highs, than that experienced before.
And yet despite all that - SLP has 10-bagged it's SP in 4 or 5 years when read from it's peak earlier this year. So don't think the current SP retrace can be laid at Platinum's door.
Also the chart of platinum price appears to be mirroring the FTSE so far - a sudden big fall to mid March and ever since has climbed half way back to the prices before the month of March.
So from mid March to currently, platinum has "overall" increased, not fallen. That just about describes most stocks performance this year.
To me this is obvious, check the platinum commodity price its reached a new low. Lack of demand in automotive sector is filtering through to the commodity price and thus this companies share price. The share price drop may still continue due to this.
I'm plum out of thoughts on what's the root cause of this current, notable retrace in the SP. Have ruled out insider trading whispers, winks and nods to the cognoscenti, that maybe a poor trading result coming up in circa a month and a half or so, is a concern.
Nothing approaching a profit warning in any previous RNS releases, just the expected usual all companies are issuing: That Covid is a factor going forward.
So have to agree with several comments over the weekend on perceptions that some institutions believe Covid could potentially now hit hard in South Africa, as it's mostly not been in the news like other hard hit countries.
One post mentioned checking the Johannesburg Stock Exchange but it had revealed nothing. Realised that for years I have never sorted out a source for instant access to ALL the world's exchanges in one click, so wanting to check out the JSE myself I Googled and came up with a smashing site
Not only does it have charts on every exchange in the world (130 odd) but true to the second part of its moniker, it has a pack of economic stats on every country too. Number of infected patients, number of hospitals in each country, number of beds - for every country in the world, plus all the usual GDP per head/unemployment/interest/inflation figures plus a review of the next 2 or 3 years likely increase/decrease of every country's stock exchange.
So thanks for the mention of JSE - it got me doing what I've been meaning to do for years. Feel mightily empowered now. Got an opinion on every county in the world now LOL!
And I too, could see nothing of concern in the JSE stock market trends (as someone mentioned they'd checked too)
- in fact if you removed the exchange name at the top, it looked just like the FTSE chart! So nothing exceptionally bad occurring there, that might be impacting on SLP's current SP malaise.
- That's a lot of knob puns since your post on the SP "dickin' about".
Now the SP is in the 30's it's giving me the willies, so there'll be no John Thomas puns from me, especially whilst I'm waiting for a likely pin-prick visit only, by the SP into oversold condition :) :)
Yes, I've noticed a severe divergence between accumulation volume and price (whilst accumulation volume has done nothing but continue rising non-stop since the current SP retrace commenced in June (never falling below the uptrending average accumulation volume metric, that's been running in place since April) it only dropped through that uptrend from Thursday morning last week - and instantly converted into a downward distribution volume diving through the previous uptrend and caught up with the retracing price; so as from Thursday/Friday last week, they're now both singing from the same hymn sheet and are at last in synch. Strange. Unusual behaviour; took all of June to self-correct. (Price normally 'corrects' to volume - not the other way around).
ie., the old mantra of: " volume precedes price".
Wonder if it's been anything to do with the company, drip feed buying, it's own stock back, that has muddied the water of any notable seller in the background? Other than that - can't explain it. Then again it is AIM! :)
And thank you too, Mjedwards. Much appreciated.
Only one thing - felt a little concerned when you posted:
". . . will now give it til Tuesday at least, based on your notes. "
So a word of warning called for here:
Do bare in mind my notes are based on my highly personal opinions; best guess "probabilities" - not certainties, and yes, I do make mistakes. So, no better and no worse than any other PI's opinionated comments.
Hope you've got your sceptical switch turned on (but not cynically) of online posters comments, and test them first for unintended owner-bias, against your own strategies.
I think the comment directly after my post, helps sum-up what I'm trying to allude to, namely:
" . . . your thoughts are certainly well appreciated by me, and as like any view, I’ll take it with a dab of salt and draw my own conclusions. . . "
Here's my penny's worth...
As regards Covid-19, there's a big difference between operating an underground mine and working on the surface, either in an open pit environment (like Tharisa) or in a tailings recycling situation (like SLP and JLP). Underground miners will be seriously hampered by social distancing regulations, but it should be far easier for surface operators to adapt to the new normal.
As regards the PGMs market, at the moment both supply and demand have suffered for palladium and rhodium - it seems roughly equally. As almost all rhodium production comes from South Africa, and it is simply irreplaceable in many of its applications, I'm confident that it will soon be in deficit again, and I think it likely that it will make new all-time highs in 2021. (Remember, rhodium is the largest contributor to SLP's revenues). IMO, palladium should continue fairly strongly, (Covid-19 has convinced many people around the world it's better to own a car that take public transport), and platinum will continue to drag along behind in the $750 to $1,000 per ounce range.
It's fair to say that the Stockopedia dividend yield number is derived from a house broker (Liberum) note, and not from anything the company has said. However, SLP do have the cash to pay an absolutely huge dividend if they wish to do so. Or to buy back a lot of their own shares. Or a bit of both. I guess we'll find out their plans in late August when the annual results come out.
P/E here is ridiculously low, and all other metrics are appealing. Trading volume has been very high over the last couple of days. I assume the share price will rise back to more "normal" levels once the seller is done.
Looks like the Covid 19 situation in South Africa may be affecting the Palladium mines. Which may explain the shire price drop. However, if the mines have to close this will probably send the Palladium prices higher which may mean more profit for miners in the long run.
Also from a chartist perspective the 36 - 37p area has acted as support several times in the past 1 year so won't be surprised if it does so again this time around especially as the price is oversold on the daily chart. I did buy at 38p a few months ago and will consider topping up this week. Palladium prices may start their bull run again when motor sales pick up over the next 6 - 9 months as well.
Not to talk of the dividend yield. Stockopedia gives it a yield of 22.98% !
One thing I can see that is negative is the Covid situation in SA - it's picking up a pace. Whether this has something to do with the sell of I'm not sure. I looked at the JSE and it's up since March like other world markets so maybe I'm well off the mark, but I do agree with other posters that this is a really good entry / top up point. However, if there is any credence in my thinking then it may still have a little further to go. I do think the bounce will come - this company is strong on so many fronts. It's all a matter of timing. Just to give people confidence, I'm thinking of topping up on Monday so I can almost guarantee a 5% uplift before markets open!
The MM's destroyed more than a few who bottled & bailed on brilliant half year results end Jan. Walking the SP down 20% to 36p before reality and a strong ST article took it up to the mid 60's within weeks.
MM's made a fortune.
Same will happen again, particularly if that elusive sustainable divi becomes part of the story.
38p is a complete joke, fill your boots.
So the question remains, which cheeky bastard has been loading their sacks into this at a preferential price? Haha. Whatever bro, 70p by Xmas.
Fkin spell check haha. Pin prick. I’m sure you have a perfectly fine colour pink, brown or black prick. LMFAO.
Massive buys **
Perfect summary Velo, your thoughts are certainly well appreciated by me, and as like any view, I’ll take it with a dab of salt and draw my own conclusions. Why I like hearing your views are simply I rarely pay much attention to charts. Contrary to tigers thoughts early, abd having double checked on the stock exchange site itself, there were indeed massive bits towards the end of play so without question, this SP has been purposefully (absolute joke) marched down to this point and I’m expecting a huge reversal some time soon which may conducive with some of your pink prick assessments. It wouldn’t surprise me to see this ride back up to the mid 50’s towards the end of the month. All the best!
( Concludes: Part 2 of 2)
. . . I've made some nice plays on oversold conditions and intend carrying out more. So if and when the SP does retrace further and becomes oversold you can start counting the days to the SP terminating this retrace. IMO? - 80% to 90% certainty of that - should the SP continue down and cross over into oversold territory next week.
SLP was floated on the market back in spring of 2011.
It immediately sank all that year, continued sinking throughout 2012, and 2013, and hit the floor in 2014. And stayed there. In other words had you held SLP from when it floated, your investment would have been devastated over the 4 or 5 years and lost 90% of it's value!
However from 2014 to roughly the summer of 2016 you could have picked that SP floor low, almost at will, over those years as it trundled along the floor: Hence my curiosity of Stoodio's reasoning who bought in those years for mere single pence! It was a disaster area.
- and the perfect time to buy!
Contrast that to my trying out the CANSLIM strategy this year, that said buy SLP earlier this year at 57p! The reason I did, is because I could see the history of the SLP performance; one of a glorious explosion of non-stop growth since 2016 to date - a ten bagger in the SP, if the recent high before the March crash is used as a high marker from the lows of 2014/15 etc.,
So when you look at this 38p area in relation to all that, it sits quite 'normally' and doesn't look anything at all like the 2011 to 2014/15 years of non-stop decline!
PS. Ever heard of Fibonacci?
Just done a Fibonacci retrace from that 2014 low to the recent high and the 50% retracement level is coming out just 3p-ish below tonight's close.
Would all tie in nicely with the SP entering oversold condition from next week.
(However, my favourite is the 61.8% golden ratio which lies further south at a terrifying 28p-ish).
28p would mean I would top up again; I'm happy as Larry to get my average into the 40's, because if there is further trouble I can easily see an escape in the 40's where that trick would be much harder to pull of at my old 57p.
So, looking for an oversold condition to develop next week and then can say for certain that this bearish retrace has a visible use-by date on it.
Possible that it merely pin pricks RSi 30 on the day and doesn't enter oversold and bounces off that border quite quickly; as usually there's some public 'bad news' that propels stocks into oversold condition (some don't easily recover) and as there is no publicly known bad news about for SLP I'm placing some faith in the 50% retracement level of 35p-ish area - but not ruling out lower.
In fact why guess; just let it unfold. No specific poor results or bad news about so recent years history suggest this retrace could turn out to be nothing more than just - one of those things!
Long rumination post - so go get a cuppa first :)
(Part 1 of 2)
Not only has the SP sunk to close tonight on 38p - but all trend lines, all indicators, are resolutely and hellishly bearish without exception, and forecasting even worse to come.
So much for truly glorious fundamental balance sheet metrics eh? (And they are exemplary - so unless a bit of insider trading is going on with funds moving out before the finals are published in late Aug/early Sept now that the full 12 months trading year closed on Tuesday, it's fair to say that there's not a hint of a catastrophic failure in the trading year just finished; but maybe speculation going forward? Whatever, not a hint of balance sheet impropriety from any source).
So is this retrace just some sort of cyclical thing?
I must say, looking at the long term trends the current SP position doesn't look out of the ordinary - it's something that will only become apparent in hindsight, but right now (if it terminates in this vicinity) it feels quite disturbing for those living through it. All the previous sub 200 day averages mentioned further below, would have induced the same queasiness. No one could say with authority they knew for certain it would end those retraces - but they did end - and return to their previous upward trajectories.
The most important of the long term trend lines, the 200 day moving average now lies north of the SP. However IMO I think mean reversion will pull the SP back above it. As for several years now there has been no historic characteristic of a declining 200 day ma holding permanently. Tonight makes 3 full days where the SP opened below the 200day ma and closed below it. Not good.
But not yet the end of the world so to speak, as a bit of mean reversion may well pull it back as it did in April after the March crash,
then at the end of 2018
and before that as it did in the summer of 2017,
and the serious spell in Oct 2015 through to summer 2016.
All of them were hauled in, by mean reversion returning the SP to the 200 day average and then to continue its upward trajectory - but it would have been discomforting to live through on a day by day basis.
So recent years, supports the SP enjoying a return to living above the 200 day average price - should the finals, and the coming fwd year not disappoint.
The Relative Strength Index is sitting at the dangerous RSi 30 border tonight at RSi 31 - below which the gates of hell open up, but also can be quite cathartic.
In fact, despite my topping up the other day at 42.7p I quite hope it does descend down through the gates of hell and enters a true technical oversold condition - as it would signal:
A) Seller exhaustion
B) That a termination of the retrace was on the cards within days/week.
(Part 2 continues) > > >