Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Well, I ate sh** on my buys this past 6-9 months. Avg. sits at ~150p. I also got it dead wrong when I suggested we'd bounce in the spring. Tbh, I totally underestimated the macro influence here. Rising costs have severely eaten into BOO's margin, and like most growth stocks -- the SP has been punished. The silver lining is that there is nothing fundamentally wrong with BOO's business model. The current climate isn't favourable, and the decline has been mirrored by ASOS and whole host of other e-commerce retailers over the past year. I'm not expecting fireworks tomorrow. Freight costs have been astronomic this past six months, and so have materials. That said, shipping costs have gone down a lot these past few weeks, and commodities are starting to roll over too. Not recent enough to affect the trading update, but that does bode well for future earnings. Shorts went up last week, but I suspect they will come down again soon. BOO is an easy target in these market conditions, but and last week's bad CPI print probably made this a no-brainer for them. Passable results tomorrow could see them slowly exit. Not all at once (they 'hedge' funds after all), but incrementally. For now, the settlement of the lawsuit and improvements to infrastructure are pleasing developments. Would not rule out the company buying back some of its shares either; I know they recent vote on that as a possibility for the future.
Regarding the small short increases, be interesting to see where else these funds allocate their assets.
Hedge funds, by definition, hedge against downside -- to protect their clients' capital.
Even if MW - the arch-BOO-shorter - close their position in the high 100p's, this will have been a highly profitable trade for them.
They will also wait for clear signals to scale out.
OIL has been non-stop on my news feed this week. It's even penetrated this board.
Now, I know OIL affects everything , but it's unusual to see it talked of here. Strengthens my view that $130+ OIL was a local speculator-driven top. I mean, just look at the WTI chart.
OIL prices will likely stay elevated, but I think the $100 level is where it will stick for a while. Commodities tend to mean-revert following spikes.
I also think GOLD comes down. It took the supposed threat of WW3 to lift it a few %.
I really wouldn't trust the news; in fact, I'd actively counter-trade it. Eg., getting into BOO at the ground floor like we are here.
Friday afternoon and I think it significant that BOO hasn't given up 2 days of strong gains.
My thesis that money is being put to work is slowly hardening. Funds have been exiting European indexes and commodities, and now solid companies like BOO with good fundamentals but beat-up SPs look attractive.
I still believe Norges Bank's decision to invest and add more is meaningful. A sovereign wealth fund must invest responsibly, and their risk management will be extremely rigorous. I think the only thing they are guilty of here is being too early; but then, their time horizon will be very long.
BOO's downtrend has been an exaggerated reflection of the wider market these past 6 months. Asset allocation has been risk-averse.
The impending uptrend will be the same. Asset managers are looking for yield and retail investors, as always, will catch on late.
I speculate we will be at 120p by April.
Smartie - don't get too caught up in the oil hype. It's been going up for months and months. The early week parabolic move over $130 had all the hallmarks of a blowoff top. The news cycle was all "oil oil oil", and the reddit traders have been piling in. But the news about Russian oil being embargoed has been priced in for ages. Couple of weeks and I reckon it's under $100 again.
Similar to my previous post, it strikes me that money is being put to work again with productive assets (risk-on). The rotation into commodities/energy began many many months ago -- and is nearly played out.
Markets are forward looking, and I believe yesterday's rally in equities represents a pivot point. There will be some chop, as always, but I think investing in growth 'is back'.
BOO may be a highly leavered growth asset, but it's also high quality with brand recognition, established infrastructure, and e-commerce know-how. It would not surprise me one bit to see a grind up to 150p+ from here.
Today's jump was the biggest single day rise since 2020. Lots of short stops will have been taken out, no doubt. A run up to 100p and a re-test of the low 90ps will also serve as confirmation to sidelined buyers.
The SP will improve in line with the weather (hopefully).
I'm watching the commodities index very carefully right now. Especially oil. Looking back at the chart, BOO's clear downtrend began in August -- the same time Oil began to move up.
From then to now, small and mid-caps have taken quite a beating. The large indexes - eg. the S&P largely held up and disguised the state of things, mainly because they are driven by a handful of mega-corps. Most stocks have been solidly in the red for months... just look at the AIM or the Russell 2000.
Of course, the big indexes have finally relented, and we've also just seen what I suspect is a blow off top in a number of commodities (Oil, wheat, Nickel, Palladium, Gold).
For me, this could be an early sign of a paradigm shift. With all that's befallen risk-on assets (like BOO), I feel anyone shorting/selling now will be VERY late to the party. Risk-on assets have endured Omicron, semi-conductor shortages, supply chain breakdown, high oil prices, threat of rate hikes, and WAR(!).
In hindsight it should be easy to understand BOO's downtrend; it certainly wasn't unique to this company. But we are here now and, thankfully, I think a slow recovery is about to begin. At the very least, the risk/reward is extremely favourable for longs.
ASOS and THG both up similar amounts today. Reiterates my view that online fashion retailers have been move together, and that the 6-month+ downtrend doesn't reflect anything *specifically* bad about BOO itself.
I think what we've seen is sector rotation out of these names - starting in summer 21 - and into more defensive, dividend-paying plays. Energy being the most obvious gainer.
What may be happening now, following the recent drop in global markets, is a return to more risk-on assets. Not all at once, but in anticipation of a resolution in Ukraine. Any talk of peace will see a monumental rally in the Nasdaq, S&P, Dax etc.
I'm kicking myself for catching a knife last year, with no obvious support in the chart (my avg. 158p), but I think it would be an even bigger failing of market psychology to sell at these levels. So I'm being patient.
Interestingly, with previous results we've seen a multi-week run-up in the SP, only to be sold into on the day (sell the news). This time has been the opposite. I have a sneaky suspicion that BOO sandbagged their December warning and could do better than anticipated.
So much to like about SLP. Excellent value, lots of cash & no debt, decent dividend... and now market conditions are shifting to favour good quality industrials. Metals rising, and I also see a double bottom and breakout (if you believe the TA astrology).
I've placed a cheeky bid at 98p (200 EMA). Markets often give back on Friday, but I might miss out with this 2p spread.
Either way, watching this like a hawk.
"Norges Bank is the central bank of Norway. Apart from having traditional central bank responsibilities such as financial stability and price stability, it manages The Government Pension Fund of Norway, a stabilization fund that may be the world's largest sovereign wealth fund in the world".
*** Don't know about you, but I think these guys know what they're doing. If you're unaware, last week they purchased a 3pc stake in BOO.
Or you could listen to some random who says "going under".
In a few weeks this peak negativity will seem like a distant memory. I remember the same stuff with Leicester... the auditor dropping out. It recovered.
TBH, I don't thing I've ever seen sentiment so low on BOO. This is where the retail seller/shorter gets seriously chopped up.
Also, despite what people say, the leadership team are not stupid. This is one of the most successful British retails startups in recent memory. Not many of them around.
I strongly suspect today's cautionary notice has been sandbagged as much as possible. Under promise and over deliver.
Hoping this can be a good-natured debate. Signs look good so far.
On the subject of cheap-expensive, I will stick my flag in the ground and say that, at current levels, BOO is cheap.
If the historical average price of an asset, adjusted for inflation, is nothing to go by -- well then we might as well just abolish these terms.
Agree that the 'hear and now' is very meaningful, but fundamentally the situation for this firm has not changed much since the summer. Yes, we have the Omicron FUD and a reduced profit outlook, but these things change extremely quickly.
We've had a downtrend, obviously, but today's drop was extremely steep. In my opinion there will not be as much selling pressure back up to 130-140p.
We likely won't see 200p for a while, but I can easily see consolidation at higher levels than now. Which is why I bought today's drop.
At some point, if one has conviction, the trigger needs to be pulled. If I'm wrong, I'll take the L.
Very calm with my position size and time horizon.
The thing I've noticed when BOO drops is that the price is NEVER low enough for some people. In my experience the market doesn't often give the doomsayers their target price when negativity is so extreme.
Appreciate your reply mcklondon. I do lurk and - believe it or not - I think you add value to this board.
That said, I recall earlier this year you explained BOO was trading in a symmetrical triangle - and once the apex was reached we should be "up and away" / "onwards and upwards" (words to that effect).
I'm not having a dig. Just pointing out that this share often confounds and overshoots.
I was very wrong at that time too. As I said, I'm not trying to aggro. Just an observation.
Capitulation - that's what I'm seeing right now. Lots of people saying "I'm taking losses" etc.
In many ways this is encouraging. The bad news is out and the rumour has now become widely-reported news.
Just for sec, flip this chart upsidedown (ctrl+alt+down). Now, a lot of people into TA talk about "parabolic rises" and "blow-off tops"...
Ask yourself, if the situation was inverted - would you be a buyer at these hypothetically high levels?
My guess would be no. Most experienced investors would conclude this had already run hard, and not 'FOMO' in. The risk/reward would not be a good enough proposition. The overbought RSI would also be a strong indicator. Canny holders would likely see this as a time to take profits.
If you can get your head around it, I think we are in the opposite situation. Markets often like to punish late/panic sellers with a HATED reversal rally... To inflict maximum pain.
When this comes, I can't say. But it will catch most off guard.
My 2ps :-)
As an aside, I'm also seeing some wild speculation about "dilution" and "going under". I mean good god - this is a £1 billion company with vast infrastructure, entirely optimised to online sales.
The price action in recent weeks supports my thesis that BOO rarely trades rationally. I.e., within an easily defined range that reflects the firm's long term fundamentals and sales performance.
Instead, the SP is mostly driven by sentiment and momentum. Which isn't surprising because BOO is one big recognised name that attracts a lot of volume. It's also highly news-sensitive, so it provides LTF traders regular opportunities to make money in both directions.
First purchased BOO on Friday 16th July 2020. That week the company had been savaged in the press following the Leicester allegations, and the SP had fallen sharply. At that time it was all doom and gloom on here but then suddenly sentiment completely changed following director buys. In a matter of months the SP rose from 225p to nearly 400p.
The point I'm making is that you won't get much warning when this thing turns around. As the R:R for shorters gets less favourable and sellers run out, it will only take a small piece of positive news to change the mood.
Given we've been trending down, for me today's announcement is an inverted version of 'buy the rumour, sell the news'.
My average is 158p - similar to Norges Bank, who operate the largest oil fund in the world.
We will see. Could be dead wrong.
The news is out now, so fully priced-in. Shorters deep in profit now, and I suspect they will be considering their positions very carefully.
BOO has a massive profile on the LSE, and is heavily favoured by day/swing traders. For that reason it moves with extreme volatility.
I was overly bullish on this company at the beginning of 2021, and had to eat humble pie and get out in the 320s. Looking back, we were clearly overbought then, and now we're oversold.
The company has grown so much in recent years, yet here we are below 5-year support. Personally, I think this is a good opportunity. If there's one thing I've learned with TA is that, the steeper and faster a decline -- THE MORE UNSUSTAINABLE IT IS.
When the bounce comes, I don't know, but it will come. Any good piece of news could see a powerful impulsive reversal. It would not surprise me at all if BOO have sandbagged these numbers. Ripped the plaster off to get the pain out of the way.