The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Questions (not word for word, of course): Hansie's responses to the following questions: Is the stock undervalued? "Yes" Why don't you own any stock then? "You wait and see" Is there a cash constraint worry going forward, hence the dividend cut? "I do not think so. It makes no sense to pay a dividend when we can return the equivalent in a year through investment. Our investments involve low cash commitment so we see the dividend coming back within 12 months" When do you see the JV with regard to the mine being sorted out? Hansie: "Within this quarter hopefully" Ian: "We have multiple interest from 7 companies, however some are window shoppers so we have more like three serious investors" Could you explain the non-cash finance expense appearing on cash flow statement? Ian: "It is for balancing purposes, and looks extreme due the foreign exchange movements" Overall thoughts: Goldplat was the only company of the three presenting that had a viable business strategy that had concrete operational grounds. All they need to do is to have a strong year without any problems and they will be significantly profit making. They are beginning to source waste internationally and have interests from the Americas and Australia, which us encouraging. The formal push into the PMG market is also very encouraging. Hansie is the only reason why this company is afloat, and personally I would not be invested if he was not there running the operations. Lots of catalysts in the next year: JV will arrest losses in Kenya, a reinstatement of the dividend, Burkina Faso launch, and PMG waste volume growth. This is a strong and viable turnaround play and I believe we are at the floor in terms of valuation. Onwards on upwards. All in my view, don't take as dictum, and don't take the above responses from Mgmt as dictum either. This was jotted down after the event by a friend of mine whom I attended with.
Questions (not word for word, of course): Hansie's responses to the following questions: Is the stock undervalued? "Yes" Why don't you own any stock then? "You wait and see" Is there a cash constraint worry going forward, hence the dividend cut? "I do not think so. It makes no sense to pay a dividend when we can return the equivalent in a year through investment. Our investments involve low cash commitment so we see the dividend coming back within 12 months" When do you see the JV with regard to the mine being sorted out? Hansie: "Within this quarter hopefully" Ian: "We have multiple interest from 7 companies, however some are window shoppers so we have more like three serious investors" Could you explain the non-cash finance expense appearing on cash flow statement? Ian: "It is for balancing purposes, and looks extreme due the foreign exchange movements" Overall thoughts: Goldplat was the only company of the three presenting that had a viable business strategy that had concrete operational grounds. All they need to do is to have a strong year without any problems and they will be significantly profit making. They are beginning to source waste internationally and have interests from the Americas and Australia, which us encouraging. The formal push into the PMG market is also very encouraging. Hansie is the only reason why this company is afloat, and personally I would not be invested if he was not there running the operations. Lots of catalysts in the next year: JV will arrest losses in Kenya, a reinstatement of the dividend, Burkina Faso launch, and PMG waste volume growth. This is a strong and viable turnaround play and I believe we are at the floor in terms of valuation. Onwards on upwards. All in my view, don't take as dictum, and don't take the above responses from Mgmt as dictum either. This was jotted down after the event by a friend of mine whom I attended with.
Some coverage on Shaftsinkers detailing a way to play the current situation: http://phynixmanifesto.wordpress.com/2014/04/20/shaftsinkers-arbitration-option-play/ GLA
PhynixManifesto initiates coverage on GDP: http://phynixmanifesto.wordpress.com/2014/03/09/goldplat-value-in-scrap/
Read it here: http://phynixmanifesto.wordpress.com/2013/12/15/gemfields-poised-for-a-revolutionary-2014/
You're totally right Eldras. This stock has remarkable potential. Just be pleased you can continue to buy at these prices. The reason why there is no growth priced in is twofold: 1) Management don't have a track record to date of bringing massive profits into existence. But, of course, just because they haven't yet doesn't mean they can't. Time will tell. 2) There has been no framework communicated to the market by management with which to extrapolate the growth of the market in, say healthcare, or the figures that go with it. We don't know anything about margins on the SensiunVitals product, we don't know expectations of roll out, we don't even have an updated sales price. Until that is communicated, investors can start doing their modelling and building in expectations in the SP. It is still very speculative because there is a lack of information. I think this is probably largely because management have a track record for being fairly poor at relaying info to the market, although this has really improved to a very good level in the last year, and also because management probably don't even have all these figures that investors would want yet! I'm in, have been since nearly a year ago today, still waiting patiently. All we know is that the potential for this company's IP is big, just how big is uncertain. What is for sure though, is that when it does develop, it absolutely will lead to a greater price than current levels.
For your reading pleasure: http://phynixmanifesto.wordpress.com/2013/11/17/gemfields-getting-expensive/ A little on the technical front tied in with the fundamentals. GLA
I believe the next emerald auction will be in October in Lusaka, Zambia. See this article for detail: http://www.bdlive.co.za/business/mining/2013/10/04/gemfields-hopes-to-resolve-auction-issue-with-zambia
Coverage update on Gemfields' progress and highlights of the annual results here: http://phynixmanifesto.wordpress.com/2013/10/06/gemfields-a-de-beers-story-in-the-making/
Remember that when PVCS announce when the cash distribution will be it will be too late for investors to hop in and take advantage. It is normally announced a month or so prior to and given that it will possible after the transfer date, there is little reason to suggest why it might not be quite soon after. Given that pretext, then we might see an announcement next week. Or it might be longer. Either way, by 2014 it will be done. I'm happy to wait.
For your reading pleasure: http://phynixmanifesto.wordpress.com/2013/09/01/gemfields-a-technical-inflection-point/
See my article: http://phynixmanifesto.wordpress.com/2013/08/11/gemfields-breaks-out-of-bear-trend/ The intention is to provide both the fundamental and the technical story. It was written about 7 days ago and this week's movements affirm my statement of there being a breakout. Happy reading.
Indeed, MAGP is a great little stock and it should soon enjoy its well deserved re-rating. However, I suspect we will need a catalyst superior to further strong well IPR from higher interest wells. The market appears to have already assumed they will be good and not dusters, but it certainly hasn't priced in the extra cash they will be pulling in. Maybe an update on that front would do it. Anyway, wrong board!
Yes, at any rate we have seen that whether or not the auction is in Lusaka or Singapore the results are very positive. This relieves a lot of discount to the weight of the Zambian government as a result. I think the company may have turned a corner with this, which is especially confirmed with the Bloomberg report you posted. Thanks for this. I also like the feel of Gemfields and I feel that it could be something of a unique growth story if it can overcome political pressures. It looks like they can do this. Promising stuff.
Why would such good results be a cause for the news release of international auctions being permitted? If anything we will see the Zambian gov.t make it such that all auctions are held in Lusaka because we have clearly been shown that the business model can actually work in this manner. The Board today proved that their strategy and their efforts have been enough to bring the buyers to the source. I think many have overlooked that today. Great news for the company and a tribute to management. I didn't think it would be possible. I was proven wrong. I'm now a shareholder again as a result. GLA