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The market is currently pricing in a PGM price collapse. Now sure if that happens current price is fair. But when the PGM recovers...... I'm fully loaded here. I'm not one to preach how other should spend their cash. But assuming I'm right, this would make it multibagger number 6 in the last 12 months.
Bangrak, in
June 2020 quarter :
Revenue = 28.03m
Net income = 8.54m
Cash in hand = 55.88m
Jun 2021: quarter
Revenue = 60.45m
Net income= 29.64M(£22 million)
Cash in hand=106.41M
You can clearly see the difference no?
Now we are in September, that is another 29.64m in the bank. so cash in hand is now =$136.05million(£100 million)
Now market cap of SLP now = £238M.
So. strip away net cash= 138 million. Assuming current spot prices annual net income = 22*4= £88 million. Now imagine if spot prices go back up to previous highs and why not as microchip shortages is peaking this month, net income could even double to £180 million.
But assuming net income of £88 million, and removing net cash, we are cuurently rated on enterpise valuation of only 1.6 timese net profit. This is hilarious as other Aim shares producers are rated at 6 -16 times net profit.
You can see why 87p is a joke price, and the there is material upside from this price.
I'd spend a bit longer than five seconds having a look. But yes, many ways to skin a cat, thanks for the sentiment but as we all know, there's no room for luck in this game. Lets see what the next few days brings here, could be quite interesting. Have a great day.
Look back to Rh prices 1 year ago now, you will see they are very similar. The corresponding Q results at that time with lower expenses due to higher electric prices now gave a NPAT of $21m, cash went up from $55.9m to $60.9m, the SP was around 59p. Assuming these PGM prices level off as analysts predict due to chip, it makes it a profit of around $80m and EPS of 19p which was said last week calculated the long way, makes ST, & the broker look way off the mark. You "the market" gives this a 4-5x rating, so it's sat and has stopped at present at 86p for a reason possibly, not sure where 140p is coming from by December with what I see. As someone said a good 10-12% in and out possibly but sat waiting for 140p-200p I'm not sure.
...Having said that, there are many ways to skin a cat, so good luck there shanny!
Shanny, I had a five seconds look at RNWH.
Revenue 183.21M - very nice
Cost of revenue = 158.06 M - very not nice
Net income = 7.51 M. No thanks
Cash at hand = 1.57M No thanks.
Thats all i need to know really, and took only 5 seconds.
You picked right with SLP, but your 10 percent profit strategy is a quick way to the poor house. Cut your losses quickly and let your profits grow, is not a cliche, its a the only way to make money in over the long term in this diffcult game we called investing/trading. Many will lost it all within a few years.
Look at SLP numbers, simply nothing better around.
Chart looks interesting for a 10% gain , quick in and out. Buy 86p or lower and sell 96p, needs a tight spread so looking for volume. Tomorrows open will be interesting.
Off topic - Bought RNHW today, worth five minutes of your time................
All in my opinion of course.
Great analogy
I got to say this is one of the least stressful AIM shares I ve owned. Just put your feet up and enjoy the ride. I think SLP will be resistant to any stock market corrections - only thing that matters is the price of PGM which is determined by car sales, and with peak microchip shortage this month, there is only way that PGM prices is going to go, in fact boucing nicely off what could be the bottom.
The Sp is going like a Fiddler’s elbow lol ….
ic152 - stock correction possible (if it happens, it;'s not March 20 all over again - nowhere near it in fact), but mostly false prophecy for me bro :)
DOW heading for 40,000 end of 2022/2023. You can lock that one in for the sword too :)
The finances (as you mention) and condition of this company operationally is splendid. We're sitting in the seat of the equivalent of an Aston Martin DBS Superleggera. SP slightly unreliable, just like the car. Otherwise so finely tuned it's a dream to ride. And Sylvie rides real good :)
PGM’s just starting to move upwards. Rhodium up a bit, so predictably SLP goes red. Can’t make this up.
Stoodio, I do hope your 1.40 is right! The finances suggest it could, especially with another profitable quarters results in the bag.
The global tailwinds of stock correction doom are lingering.
Little bit up, little bit down, not sure we're breaking the downward resistance around the 83p mark but Velo is better to ask there. PGM's will be rising drastically into 2022 as things iron out.
I think October / November might well be explosive. Eternal "ramper" here though in longer than a decade, so time will tell.
Stoodio, That is a fantastic future prediction, can you tell me the highs and lows up to there? Many thanks in advance.
December 31st. £1.40+
Remember I said it :)
Willing to fall on sword.
Put it this way, its not going to last forever. Its expected to peak this month, which is coinciding with what appears to be a low in the rhodium prices. Some here are looking for the exact bottom, but given the strength of the balance sheet, and growth in earnings here, but I suspect they will end up buying much higher than the cheap price it currently is.
How long is the chip shortage expected to last and what's the long term outlook?
From a reputable source: https://www.idc.com/getdoc.jsp?containerId=prAP48247621
Chatmandu - not with me buddy :)
“The stock market can remain irrational longer than you can remain solvent.”
House broker Liberian Capital believes we have reached peak microchip shortage this month. The price of Rhodium has already risen 12 percent from this month's low of $11250. One does appear to be following the other.
ZERO debt.
$106 million in cash and counting.
Net profit of $99.8m in 12 months to 30 June 2021.
"Based on flat production of 70,000 PGM ounces, cash profits north of US$120m (£87m) should be easily achievable in the new financial year." IC quote at current low spot rates. If Rhodium prices bounces back as is expected profts will be significantly higher than $120m
And here 's the odd thing: Market cap only £250 million? That is this is trading at only enterprise valuation of about 2 times cash profits. I seen other AIm shares trading at 6 times cash profits.
Either this is a bargain of the century or I'm missing something?
I've topped today as much as I had left under the bed, and stuffed in the leather armchair:)
DYOR.
buy in price, may or may not be at the basement.
Sylvania may be amenable to make some acquisitions in the same way that Jubilee appears confident in doing, they certainly have the cash?
12m Forecast Rolling PE Ratio (f) 2.8
I never put all in one share, and I go in slowy , trim and take small profits, try to get my average as low as possible... This looks like a winner for sure but you never know they could drop it lower!
General markets of down due to US debt default fears. I'm seeing a sea of red in stocks today. If I had some cash under the bed, I would plonk it all in here and wait a couple of years for a ten bagger.
Well its just touching 85-87p looks not a bad time to buy to me!