Wentworth CEO sees both capital and dividend growth opportunities in Tanzania's Mnazi gas field Watch Now
well, the markets are still in turmoil...
i am glad i did make the call to take the loss on tui and buy more kaz at 275 . i now feel much better am sitting on a very comfortable position. So, considering kaz is at 330 not too bad, never thought that i do be sitting on a notional large profit when stock would be at 330.... its a crazy stock, more it goes down more money one seems to make from it. hope now it stabilises....
i believe kaz is grossly underpriced. the copper prices at the current level are not sustainable.
moreover, there is some good news, it seems kaz products for Jan & Feb has been up compared to last year...i wish
crazy. most of my 2 years of profits wiped out in 2 weeks...
i should have taken a break 3 months ago!!! never mind am now sitting on load of kaz and other stocks which on average have gone down by 50% from their year high.
i did expect a supply and demand issues because of carona but wow this is crazy. company's value is almost same as its EBITDA and it sits on a resource that all know has going to have a shortfall. but so bad is the investor sentiment...
i think i will go back to my day job....a great experience of making and loosing few hundred thousand quids.......made over 2 years lost in 2 weeks... i still feel ok though. great lesson. don't try and fight the market......
really sorry to hear that.
I can totally identify with you. I have been through a similar situation in the past. I am also sitting on a huge pile of Kaz but not leveraged and can hold it for a few years if required. markets are totally controlled by big players in the short run. Retail investors can easily become a casualty on how big investors play in the market.
as Roydon1 said in his note the most important things in life are Health, Family, and Friends! money can't buy any of these. so though it's important it is way down in priority list and treat it that way. I am sure you will recover from this loss, learn and become and stronger in the future.
i guess on hindsight i should have kept some more cash. but i did not expect the market to panic so much. it may be that the market might go down another 10% am just wondering what the central banks and the government are going to do then as so much of pension money etc is invested in the market which is going to create a huge challenge..
the market is in turmoil just because a few people have got flu.
crazy. this is so much of hype. well, i have bought kaz this morning again with the money I got selling tui. in this market, you could buy any share except the retailers and you would make a 50% return in few months or 100% + if you bought Kaz. note my words....
I expect travel industry specially European operators as more short term risky So am specially talking about short term holdings though perfect for my SIPP
I think kaz has hit the lowest level in my opinion
The issues with travel industry is that a room lost is lost for ever whereas copper can still continue to be produced and you can stock it. It’s a physical commodity so even if w short term dives down and as copper price drops there will be guys stepping in to hoard and stock copper to make money as they know the demand will eventually pick up
So even if the virus went up for 3-4 quarters the risk to copper is less compared to travel stocks
Moreover China is stabilising where the manufacturing is and Europe is destabilising where all holidaying people live
Totally agree with you. unforeseen event though i still think kaz is in a good shape and debt doesn't worry me. I believe that carona virus will now have a significant short term impact max 2 quarters on the global economy mainly because of the news and attention its getting. i don't think it is such a big deal but the damage is now done.
i took a big hit on TUI which was black swan for me. am planning to now buy more kaz as i believe when stimulus hits to make up for the lost growth copper demand will pick up and the inventory will disappear and the price will firm as you cant build more supply.
i have probably a similar position as you in kaz so we are in the same boat, luckily my average price is way below but overall have now got into red hence exited my position finally in high-risk shares. kaz i belive is the low risk still...
in fact the weaker companies going bust is only going to make tui stronger when things improve. No Flybe, not many holiday companies will be left if things get bad no Thompson, so imagine the revenue and profitability . yes but then short term you have to take risk. no reward without a risk.....
i think worth stepping in now if you have 2-3 year investment plan. in the short run though it could go down by another 10-20 % but very likely will deliver 100% upside in 2 years. i would not invest in any company like fly be which carries the risk of going bust. even if carona virus had an impact on travel for next 4 months or a year TUI has no chance of going bust (which is a worse case scenario given that chia has started recovering in 3 months) .
my strategy would be that if you have cash keep buying in small lots till it bottoms out. one sign of how robust TUI is in one of the RNS on 2nd march,2020.
Friedrich-Peter buying 10000 shares for 778,424.234 EUR worth of TUI at an average price of 7.7842 EUR that is 6.75 GBP . price now is 5.4
well, you can always short if you are so convinced...
the virus scare has had its effect and i guess this is a good opportunity to buy long term at such a low price.
it is impossible to guess the bottom but I think we are fairly close if not already there.
effect of coronavirus on kaz.....
1. short term copper demand and copper prices may go down...
max 1-2 quarter impact, given china, is managing the recovery well which is their market.
2. operations may get effected if coronavirus spread in kazakistan.
well this is unlikely given the nature of the mines which are far-flung from areas of the main population but there is small risk especially which needs to be managed.
3. stocks may go up if some of their customers stopped using the raw material for a while.
4. spare parts availability for running their mines and operations may be an issue if they are being manufactured in china. a small risk
apart from the above, I don't see many risks for Kaz as Kaz will continue its operations smoothly very likely and copper prices will recover as soon as china announces measures to boost their spending to recover the economy.
first I was surprised that coronavirus had little impact on US stocks. I now think it is slightly overdone specially in UK.
I think short term stock and commodity prices are pure heard mentality driven by auto, programs, etc and supposedly people who know the charts and down to self-fulfilling prophecy. us markets were anyway overbought and a correction was required. i think uk stocks are pretty cheap so I am surprised that UK stocks have gone down as much don't understand the logic. i can understand the selling of airlines and holiday companies but why would utility stocks go down? perhaps even if coronavirus did finally get into uk you do be using more of telecom and water and gas sitting at home.
my other observation is that diseases have come and gone in the history of mankind. surely we are better prepared to deal with such things than any other time in history so why are people panicking.
my theory is that there will be a lot of people who caught coronavirus, did not get major symptoms, their immune system coped well and they got cured without even knowing they had this virus. so the death toll number as a percentage of infected could be misleading.
On the other hand, most people who are dying of this virus have other underlines issues. I would be worried if a lot of young healthy people started dropping off after catching this virus and I haven't seen any data which highlights riks to healthy young and working populations.
well lucky to have sold when prices were better and that is why I was able to buyback. In hindsight should have sold more.
price seems to have stabilized no drop in copper or kaz today so not much to do but wait and watch
given that the current copper price is $5689,...revised downward forecast by Goldman of $5,900, $6,200 and $6,500 looks actually very attractive.
look i am long term bullish on kaz and copper. and i agree short term it is impossible for anyone to predict what going to happen and its been proven again today. copper and commodities will be under pressure short term because of the closed factories for a while but then it's impossible to predict the price of copper. my guess is that coper may go up to 5500 and not beyond it. China has been able to contain the virus to a large extent. i think the challenge will be to stop it coming into Europe which is what has spooked the market. the net number of people infected with the virus in china is actually coming down. Iran will be a risk as it may not have the capability to manage the spread but then Iran's capability to spread this across the world is very low as Iran broadly is cut off from the rest of the world... I think spread in a place like Italy is a big risk to the global economy.
i think we might see 420 but nevertheless i have gone ahead and bough today just below 450, lets see i can buy a bit more at 420 but then i would not have much money left to invest if it went below 400, but then i am not going to worry about it going below 400 yet.
when copper hits $4500 / tonne the business will still be profitable in spite of servicing the huge debt they have. the key thing to remember is that if copper were to go down because of economic uncertainty then gold is likely to go up....so if gold were to go up by another 50% if copper went down by 25% then the break-even for Kaz will move to $4000 probably...
i meant they are ok with servicing the debt over 8 years at current prices...
they will have a large deficit in 2024 but that can be managed as there is a provision to postpone the debt
at today's price 5800 for copper and 1600 for gold, they are pretty much of with debt over 8 years. there is a deficit but that can be managed... any new loans could be an issue though...
if the price were to go down by further 10% for copper then we could see a deficit of about $1.4 billion between free cash flows and repayments...and that my guess could be refinanced as the debt would come down and profitability still maintained..
i guess the real challenge would be if copper went down 25%....then payment gap would be $3.4 billion and Kaz will be at about breakeven....so may then struggle to raise more debt to repay the debt.....
if i thought copper could go to 4500$/ tonne (current prices..not adjusted for inflation) and remain there for 7-8 years i would exit kaz ........till then there is some value....
rev cashflow payments deficit
2020 2.1 350 350 0
2021 2.332 400 550 -150
2022 2.564 440 600 -160
2023 2.564 440 600 -160
2024 2.564 440 950 -510
2025 2.564 440 410 30
2026 2.564 440 150 290
2027 2.564 440 150 290
2028 2.564 440 150 290
it might test 450, that's what I like about Kaz but I am not waiting i did buy some just now to add to my stock which had a got bit lighter. 2 reasons..... excellent results... I think the impact will be felt because of coronavirus on copper but now we are getting over coronavirus... the net number of people affected is actually now starting to fall.
i will probably;y now wait and buy more if it did test 460-450.....
Kaz has been consistent in delivering the numbers so I am assuming a flat 2020 but this is what we already knew. so no surprise for me. given the current prices, you can expect similar profitability and cash flows...( i think for copper to keep dropping is not possible so coper prices will drive the Kaz number ) but then as AKTOGAY II comes on board next year we expect copper volumes to go up by as much as 80 KT per year from 2022 which translates into 480m extra revenue and 380-300 m EBITDA and possibly an extra cash flow of about 250-300 m usd
these numbers are even better than my revised numbers.... I think kaz is so much undervalued...
I think the biggest shift that I can see in 2020 is going to be EV and it's going to be much faster than anyone thought possible before. that will drive the copper demand more than what the experts are estimating and i now revise my long term target of exiting Kaz to £20 from 14-15........
my estimate. actual kaz
Revenue $2.2 Billion. $ 2.26b
EBITDA $1300m $1350m
Operating profits $840m. $923m
Net profit $430m $571
EPS 0.91$ $1.21
Free Cash Flow $485m before CAPEX ( but includes sustaining CAPEX in existing mines) $411