Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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all,
nothing to worry about here (i know most of you dont anyway...:-) but couple of observations on this drop:
1. end of tax yr approaching so we are going to get some people cashing in to use their cap gains allowance
2. IG (taken from guy over on cey thread) are having an effect it seems
Sod's Law it's dropped again today, so had another 2+ k's worth. Seems like a no brainer to me. If it drops again tomorrow it'll really start to go into silly territory.
Evening Stoodio,
Points of note:
* For the first time since July 2020 (SP retracement to the 37p area and before that in the March crash) the relative strength has descended south of the halfway strength mark, as it's never fallen out of general bullishness until Tuesday, and now inhabits the bearish zone of relative strength.
* Someone below posted earlier, of a significant trend line as perhaps the catalyst for the SP to maybe expire in this pullback. The SP is at that point currently (113/112) the 50ma. Will the SP respect that point or not?
*You were not alone, when you posted of feeling that something had changed. Normally I don't bother mentioning overboughts and the SP breaking through my personal ma trend supports as SLP has hitherto chomped on them for breakfast and continued bullishly.
Not this time!
This descent has behaved perfectly as if it were any other "normal" stock after exiting overbought as someone noted correctly (was it Bangrak?) March the 8/9th as when that exit commenced.
Could it be that something different you noticed is:
- as the SP rises closer and closer in maturing towards fair value (a long way off; but that's us - maybe the market will tell us differently in due course) that it will abide to the more common reactions to indicators et al?
Also, let's not forget my long standing concern of some sort of resolution to solving the disparity in the SP divergence from the internationally dominant 200 day moving average trend line - which no stock abuses for ever as it's a mathematical impossibility. That's currently lying in the low 70's.
The SP doesn't have to visit it (the usual resolvement) it can go limp and lacklustre and just lie flat, rangebound for an extended time letting the 200 catch up.
And the 200 has been accelerating somewhat since last summer so it does have its Mississippi bloodhounds out tracking down the SP through the Everglades. Mean reversion implies there will be a reckoning and unless the metal-men enthusiasts tell me there's been a catastrophe in the industry, it would only mean another bonanza topping-up period, like last beginning of July'20 did in the 37's.
* My main take-action strategy trend lines have been breached - negatively. That can mean only one thing.
However, maybe that significant support emanating from that 50 trend line will prevail and my 'take action' trendline will be a short-lived affair?
Couple of other things but you get the drift - bearishness is on the loose, hence my recent topping-up's.
Long term and all other trendline combinations south of medium.interim trends
= are oak-like solid bullish. This is a buying opportunity.
( When the day comes that the long term trends turn bearish, then it wouldn't be; it would be the infamous catch a falling knife no-no time).
Topped another 2,500 (shares). Top holding now.
Conviction never stronger.
This has been a gem. May it continue.
GLA
S
" But I also have a sense that you haven't allowed for the hefty influx of cash that the "by-products" (iridium and ruthenium) are now bringing in to SLP. "
---------------------
No I don't indulge in that kind of prognostication on the grounds it may be probable but until the results of that assertion are in, anything unforseen could happen to dilute your forecassts - that and the fact that I'm not a metals man. I leave that stuff to others.
Just need to see some documented interim financial results to back up the jam tomorrow forecasts, that's all. Because we're all just some random poster on the internet, and thus all is opinion only - unill the results prove otherwise :)
As in: 'show me the money' :)
Hope you enjoyed the gentle: "jam tomorrow/bottom's spanked/pretenders to the throne, leg-pulling in my post :)
.
Hi Velo!
You're right - it's splitting hairs. And I am a happy investor in both SLP and THS. I'd be glad if anybody could show me a THIRD company with such appealing characteristics.
BUT, not only do I think you need to check your numbers for THS, which are way off. But I also have a sense that you haven't allowed for the hefty influx of cash that the "by-products" (iridium and ruthenium) are now bringing in to SLP. Iridium is now $6,000/oz, and SLP produce a fair amount of it (we estimated it about a week ago). This will improve your numbers for SLP as well!
Completely agree Velo :) Evening squire!
" I do prefer a company with a higher operating margin (an enviable 55% for SLP) "
------------------
Yes - AND SLP's is so delicious - it's much more+++ than DOUBLE what THS's is! (Based on latest H1 accounts from SLP but are similar to the prior year anyway)
- however to be fair, THS has yet to complete their H1 results and I do expect to see an improvement)
Historically, SLP's operating margins have spanked THS's bottom :)
But the observations are on the future, not the past.
And while we're examining profitability, on current facts - not the future jam tomorrow forecasts - SLP have always, incluiding currently, been superior to THS, when refferring to:
Operating Margin
ROA
ROCE
& ROE
- thus demonstrating SLP has a previous history of, and currently, a better conversion of paper profits - into cash! (ie., profit is vanity; cash is sanity :)
Those are the facts currently! Today! SLP has the proven superiority - all the rest are pretenders to the throne.
If you belive in jam tomorrow forecasts always come true, then who am to say contrary to the THS jam tomorrow figures by others.
I have only one thing to say to the pretenders - NOW PROVE IT - BY RESULTS.
I'm not saying THS won't- but until then, SLP is the king - all others are on balance sheet metrics, pretenders to the throne.
You can't have the king's crown until you show proof of results - jam tomoorow won't cut it.
Everyone likes a shorcut from time to time... even greats such as Ben Graham. So how can one quickly evaluate which one of both purchases yields more value, SLP or THS?
Operating Margin + Divi / Price to Book.
THS: (21.59 + 3.31) / 1.53 = 24.9
SLP: (55.57 + 3.79) / 2.26 = 26.26
So SLP marginally more. But both can be considered equal for what it's worth.
I do prefer a company with a higher operating margin (an enviable 55% for SLP) and negative net gearing. And thus SLP it was for me. Not sure why one wants to play both... but each to their own.
SLP's forward P/E ratio based solely on company & market guidance forecasts is:
P/E 4.09
- Not even up to half the value of the industry averages!
On the same methodolgy I'm "only" :) seeing THS's forward P/E ratio as:
P/E4.89 - not 2 (as suggested below).
Whatever, projections to value THS the better prospect than SLP remain in the jam tomorrow category. Both have damn good, beltin' forward P/E ratios, indicating great potential for a market re-rating.
It's like splitting hairs; as in: what's the point of it?
Bang and TBTT - thanks! Food for thought there.
S
Sirius today i have EPS for SLP at 34p, basket $5078 70k oz knocking off about 63% to cover all the usual deductions with 272m shares. THS at 50p 1.5mt Chrome at $170T + 160k oz PGM basket $4147 less about 80% for usuals (might need more on this as shipping increases see FXPO RNS for $ shipping costs rising) . I have THS on a PE of 2.86 and SLP 3.37, looks like you are possibly on last year's figures. YTD ave PGM prices are $23468 RH $1175 Plat $2368 Pal. SLP probably won't attract more than a 8, THS probably more (was 11.5 on 2020) due to mine life and chrome element. Both very good but SLP is now 70-90% gain THS 100-150%.
p.s. Tharisa's "current P/E" (i.e. based on today's spot prices projected forwards for a year and taking into account company guidance and steady state production costs) comes out at around 2!
Hi Sirius!
A full reply would take a long time to write, but I also believe that THS has a better upside than SLP, considering current PGM prices and that chrome prices have recovered to $172/t. Can I suggest reading THS's latest presentation on their website.
That said, IMO, both companies are outstanding buys. I only wish I knew of more companies like them. Or even one! I can name a few other companies which are interesting in some ways, but nothing compares to these two.
So, THS is 144p (PE of 11) and SLP 115p (PE of 8).
What valuation or pricing method are you using to conclude THS is better value than SLP.
Genuine query.
S
50% buy on 50 day EMA & wait until the downtrend from 9 march is broken for remaining 50%. The major holder is still selling but doing better than the seller on THS which i think is far better value and deserves more money now.
This is brilliantly SLP.... :)
Under 115 to buy now. A bit of a pullback from recent highs but nothing goes up in a straight line.
My 115 bid order set weeks ago just triggered@ 114.7
Pleasing :)
Now not only did my previous top-up move me from underweight to balanced, this one has tipped me just into the overweight camp. So from here on in I want to-die for bargains only.
That’s 11 % down from recent highs.
I wonder what is next?
Our basket for the upcoming quarterlies will have had a sustained IRO $5,000 basket. Remarkable. And that figure doesn't include the now 'somewhat' relevant increase to that basket through the Iridium and Ruthenium prices.
Remarkable :)
I'm salivating at the prospect of the April results :) Let's gooooooo
twitter.com/AK47PFL/status/1374750410339139585
"#Nornickel’s Oktyabrsky and Taimyrsky mines are again flooded. The plug which had been erected for flooding localization, was washed away for the third time. Experts believe that the liquidation of the emergency may take at least a year."
Nornickel are saying that they can fulfil existing obligations to their clients for this year (presumably from stocks); but they don't say anything about the metal they sell into the spot market. Their processing plant in Norilsk is also down until mid-April. It just goes from bad to worse for them.
https://banyanhill.com/platinum-stocks-soar-as-economy-back-to-life/
https://www.fxstreet.com/news/palladiums-consolidation-is-viewed-as-bullish-commerzbank-202103240917
https://www.miningmx.com/top-story/45688-sa-platinum-shares-due-re-rating-after-sorting-out-debt-says-blackrocks-hambro/
pattern forming very similar to the high of jan 19th, then retraces around 10%, before next surge
I would think it will happen again, this time to 140-145