Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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LW
Edison forecast 11.3 cents EPS for 2021 or about 8.5p. I personally suspect slightly lower, but I like to be conservative. So the question is - why is it undervalued? Your answer seems to be ‘market mechanics’, mine is ‘reservoir risk’. I guess in time we’ll know if either of us is right.
Yes, Daltry.
I think investors' loss of confidence is a consequence of share price collapses rather than a cause of them.
As you say, somehow the price has been manipulated down and then we get all the rationalisations, which we never used to hear, such as 'too many shares.'
According to some posters, you couldn't justify a rising share price because of the enlarged share capital.
Yet it used to be unheard of for a successful growth company's shares to stand still.
HUR's have lost about two-thirds since flotation, and yet we're hearing it's 'probably' undervalued now.
LongWait - The thing is that Hedge Funds weren’t around years ago. They are piranhas . THEY DON’t look for value. They look for opportunistic weakness. I do believe that they have orchestrated a collective attack on a very popular share with vulnerable private investors. They are using other people’s money and alongside market makers, who provide their liquidity. I can’t accept there is so much loss of confidence whilst the firm is generating serious income? I also think Dr.T is a little naive about how ruthless AIM is! The Hedge funds have huge capital, whereas the PIs do not. Let’s hope, selfishly, they find another victim soon, and move on. It’s gone down too far for me to even contemplate selling. GLALTH
Thanks for your replies, and for the reminder LW, you win some you lose some, no longer holding BTW :)
'The price has probably under shot fair value IMHO, due to sentiment - but in those cases the bottom is always difficult to judge.'
I agree that it's difficult to figure out where the bottom is; in fact, you can only figure it out much later.
I don't agree with your use of 'probably'.
The price was last at this level four years ago; consider where the company was then.
The company is on course to earn about 15p per share p.a. from 2022.
On a modest prospective P/E ratio of 10, it would be 150p.
I believe in former times, it would have been on such a rating, but something strange has happened: there has been an unprecedented loss of confidence.
I've been following the market for a long time and I don't think this existed until the last few years.
The fact that someone can say he 'thinks' the SP has 'probably undershot fair value' when it's on a prospective P/E ratio of about one (which used to be unheard-of) and at a discount of 87 percent to NAV proves my point.
Worked
Full year results will be available next month. In-house broker forecasts are for a EBITDA of $87 last year and $245 this year. I suspect this year will be lower - very POO dependent.
As to why the current share price, my view is different from LW. Without repeating arguments, there are concerns about how sustainable the reservoir is because it's novel for the UK. The price has probably under shot fair value IMHO, due to sentiment - but in those cases the bottom is always difficult to judge.
We believe the price has been manipulated downwards and that the fact that scare stories have appeared online - and factually-questionable articles written by financial journalists too - seems to be beyond coincidence.
I see you haven't had much luck yourself:
SXX
09 Aug 2019 14:55
Price: 9.40
Will finish up today, no brainer at this price, not for the faint hearted though, hold your nerve and you will be handsomely rewarded. IMO
[6 months later, the price is 5.20 p]
INDV
22 Feb 2019 10:34
107.00
Very volatile of late, would agree with previous poster - Materially mispriced
target still 150p
[a year later, the price is 38.25 p]
CARD
22 Jan 2018 20:32
Price: 200.00
Bought in here @ 217p and 225p, no worries here for me will buy more IF it goes to 180p
[13 months later, the share price is 83.8 p]
Why sub 15p then
HUR is now a profitable company, Worzel.
Have HUR ever made one and if not when are they expected to?