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Why has this just nose dived off a cliff what's going on that I don't know about.. Still a good dividend and good profit what am I not seeing.
What is your obsession with SLP?
Plenty of other stocks out there.
Comes across like you have a serious grudge.
Hi Bangrak,
Apologies for the 'Bangkok' in the last message - autocorrect strikes again.
Best wishes,
Prof
Hi Bangkok,
Do I take it you are therefore out and watching as I now am?
If so are you still in THS?
Thanks,
Prof
Hi Loggy,
That is the million dollar question and I hope it has but then I was hoping that at 10,000, which was below where a lot of analysts said this would be in 2023, and therefore why I have stayed in SLP for so long.
If you are confident that it has bottomed then there is a case for adding however I worry that with a small rise in Rhodium we may still not see a rise in the share price as it is the share buy back that is creating artificial demand at this level. A significant rise in Rh however which is not at all impossible if the current price is indeed due to excess stocks being dumped, would I suspect drive a strong recovery in the SLP share price.
Ultimately, as so often, how you anticipate some key drivers playing out are what will dictate how you proceed.
Good Luck,
Prof
The question is has Rh bottomed? If so there is an argument to be adding / drip feeding at this level.
Personally, i would sit out of this until the Rh price recovers above its 50-day which is 6854, there is a reason it's low and that is simply a lack of demand/oversupply. Alternatively cash per share plus 1-2 years eps at say 55p on 5k rh would for me be good value. As an example, TGA is cash plus 1 year's eps now. COST is trading around net cash sub TNAV. Lots of good things about but the sentiment in sectors is holding everything back. Everything has its time.
With a heavy heart that is me out of SLP having taken a hit of about a third. I like the cash pile and I suspect the fall in Rhodium is overdone as a result of dumping of surplus stocks however worry that it will not recover much and could even go lower.
SLP is a pure PGM play unlike THS which has some offset from other commodities and yet they are down majorly as Rhodium has dropped. I fear that at present SLP is only being held up by the share buy back.
As Bangrak says it may take a quarter or two for the impact of the PGM falls to become apparent however at these levels there is not a lot of profit being made. The cash pile can cushion a bit but the current high dividend, which is I suspect the main element keeping people invested, looks under threat to me.
In the more immediate term I worry that the July results will start to shed a light on all of this and even with the share buy backs we may see a further fall in the SP particularly given the adjustment on previous quarter sales that Artrader refers to in his 07:21 post.
So those are my reasons for getting out. I might be wrong and kick myself - not an unusual occurrence. If we see a reversal in PGM declines I might be tempted however it would have to be significant and I am more likely to increase my holding in THS or JLP that are more diversified.
Good luck to you all whether in or out .
Best wishes,
Prof
Shows you just how far this share has sunk when tipsters use it to pump …. 86p on 22/6 and today ?
Missed a bullet it seems?
meanwhile SLP is in some trouble with its outstanding debtors who are going be re invoiced are a huge discount for purchases in the last 3 months. It’s a policy that doesn’t work when the prices collapse.
Hi stoodio,
as you like to have a look around (sniff as you said before about kodal), have something better for you, take a look at andrada (ATM), think you will like it.
would write to you personally but need premium and cant be doing with that
I thought that the divi was a percentage of the FCF, if the FCF is down then the divi is likely to be reduced. They are using the cash pile to fund the buy back, I dont remember them using the cash pile to fund the dividend before, but I might be wrong
Starting to look like a takeover target at this SP.
GLA
YoY down 70% but July 3 2022 SP at 73, 74p. If the SP was 74 last year with Rh 70% higher then I would have thought fast forward a year and it down 70% the SP would have tanked so surprised it is holding up so strong see what happens when buy backs stop...for me straightforward divi play given their cash pile not difficult becomes so if they do not pay out in Dec.
The Rhodium price is looking like falling off a cliff in the last couple of weeks.
Without significant changes in the rh price back to $10k+, as the rest don't really matter you're heading towards quite minimal net profits, it will take 1-2 quarters to see this so don't be surprised when it happens, many warnings have been given and links to PGM supply/demand provided, many of which were dismissed, the basket would be $1180 and the AIC last update was $1007.
I have a basket net of costs of $1453 using the average RH price for the last 6 months which was $9057, June average is $5923 and the current RH price in NY is $4300. With the broker artificially supporting the price at 79p you have some support here but maybe recalculate on $5923k & $4300 and it's more like $36m $23m & $18m. $40m needs $10k and it's half of that now and incentives from China for EV are damaging sentiment.
Has anyone any views, with the falling basket price if there will be any impact on the future dividend level payment?
I thought that the BOD had tied the level to a % of the Free Cash Flow (but I couldn't find the document on their website)
After the ex date for the Interim divi, I sold out half my holding in view of the falling Rh price (which has fallen much further since) on the basis that the SP was likely to fall (which it has). Clearly the Share repurchase at around the sub 80p level has kept the price from falling lower but if a lower than expected divi was declared due to reduced cash flow this would be detrimental.
If the Rh price start to recover I will be a buyer but the last time the basket price was at this level the SP was lower.
Any views for discussion?
Always around brother ;)
The magician takes a handkerchief from his pocket it has 'Basket $1443' written on it he places into a hat, he takes another handkerchief from up his sleeve it has 'Production 17.6k oz' written on it, he places that into the hat and waves a magic wand over the hat and says the word 'disappear' there's a 'puff' and a 'pow' and just like that $40m vanishes .
But wait ...The recent relogging and additional sampling data collected at Volspruit will be subject to an updated Mineral Resource Estimate ("MRE") during Q4 FY2023, which will include a rhodium resource over 100% of the project area.
The $40m reappears and the magician takes a bow ..... hopefully
Have something of interest
Nice bit of vol.
Never any easy answers to those questions but it's obviously being facilitated by the "market" - the more they buy the higher we, eventually, go of course.
Looks to be a very pivotal time for PMs right now, like literally today, so let's see which way the wind blows via the Fed tonight.
It is clear to me at present that the company will only buy back their shares if that can be achieved at a price below eighty pence a share. For the share buy backs at this time last year they only bought back shares if it could be achieved at below ninety pence a share.On the days that the share price was over ninety pence no buy backs were achieved. The question I am asking myself is if the company will buy back shares at over eighty pence a share if it seems likely that they would be unable to buy back ten million pounds of shares for cancellation by September 7th.
S&P 500 MATERIALS SECTOR HITS OVER ONE MONTH HIGH TRACKING HIGHER METAL PRICES AFTER PBOC'S RATE CUT, LAST UP 1.7%
U.S CPI (MOM) (MAY) ACTUAL: 0.1% VS 0.4% PREVIOUS; EST 0.1%
U.S CPI (YOY) (MAY) ACTUAL: 4.0% VS 4.9% PREVIOUS; EST 4.1%
June hike down to 5% ...