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@JWSM
Late afternoon share price recovery suggests, to me at least, traders closing their short positions overnight. We've seen a late afternoon uptick on the 16th, 19th and 20th. There are still no officially declared short positions, though, so it might just be standard trading that we're seeing.
If it is shorters, then I'd expect a similar share price pattern to emerge tomorrow - 5% intra day swings offer the potential for decent daily profits.
Would you mind explaining why you interpret the late afternoon share price recoveries as 'strong bull action as opposed to shorters closing their positions? Is there something I'm missing?
and down through the gutter and into the sewer we descend...
- calling people na-zis - check
- homophobia - check
- childish insults regarding gender - check
All posted 'just for fun' apparently.
Perhaps it's time to take a break from your keyboard, let the tantrum pass and then return when you're able to act your age?
@LuckyLuciano agreed with regards to there being no guarantee that the SP will readjust upwards to eradicate the low P/E, but P/E is generally agreed to be a good guide to whether a share is cheap/expensive. On that basis, SLP does appear to be very cheap.
Everybody with an interest in SLP knows that the Q4 results are likely to be very good, so they're presumably already baked into the price, which makes the current weakness all the more confusing/profound. We seem to be well below the 'consensus' (non-institutional investor) calculated level of fair pricing. It seems like a market anomaly but, given the previous SP and dividend profits that have been made, I'm not sure why SLP isn't being actively bought by institutional investors or ITs. The dividend alone should make it attractive for income seekers (e.g. CTY).
Shouldn't this company, especially at these prices, be ripe for a takeover - all a buyer needs to do is crank the handle and take the profits?
With regards to the possibility of shorting. We're seeing big daily drops during the day and then price recovery in the afternoon. That does tend to correlate with shorters closing their positions towards the end of the day.
Why aren't we seeing any shorting declarations? Can shorting positions, under the 0.5% declaration threshold, move the share price by this much (5% today at time of writing)? Do positions only need to be declared if they still exist at the close of business?
Is there anybody from a trading background that can shed some light on this?
I agree completely with regards to PGM prices. I just can't understand why a company with record results, that are already in the bag due to historical PGM prices, is currently taking a hammering. You'd think people would be piling in with the anticipation of a special dividend and soaring share price.
I'm still waiting for a chunk of cash to be transferred to my dealing account. Once that has been completed, I think I'll buy more SLP - maybe a big chunk at whatever the day price is and then additional smaller purchases to average things out.
@LuckyLuciano
In the novel 'Around the World in 80 Days' there is a clue to the ending when Phileas Fogg is in Italy. The Italian clocks were 24 hour models, whereas the UK clocks were 12 hour models.
A stopped clock in the UK would be correct twice a day, whereas an Italian 24 hour clock would only be correct once per day.
I certainly wasn't targeting you with that comment.
I've been investing since June 2010 when I made an initial £1000 purchase of BP at 360p during the depths of the Deep Water Horizon fiasco. I initially only used an ISA, but sold my holdings to finance the deposit for my house. I then switched to investing in my SIPP because the tax breaks as a 40% taxpayer were too good to ignore.
I took a year out from investing during the first year of the pandemic - the sea of red was too depressing and I made the mistake of panic selling the majority of my holdings for a loss. I decided to hold cash and bonds and, on reflection, did that for far too long - I was expecting far more job losses and a much bigger hit to the global economy.
I am currently invested in:
- Global ITs for non-UK exposure.
- Some UK ITs for property.
- UK accumulation trackers for FTSE100 and FTSE250.
- SLP and JLP are currently my only company specific shares - SLP being 4-5x the size of JLP.
If it hadn't been for SLP saving my bacon, I'd have been very underwater in comparison to January 2020. As it is, I'm roughly even/a bit down (probably a fair bit down given SLP's current share price).
I took the bull by the horns (investing had started to become a dark cloud / mental block in my mind) and bought back into the market at the end of June 2021. That may have been a mistake due to overall market levels, but I felt the need to take action.
As a newly reanimated market participant, I came here seeking some in depth knowledge with regards to the reasons for the current share price weakness. What I've found is rather chaotic!
@Cartlemare - I've already provided a screenshot of my dealing account which shows my SLP holding. Why certain people are convinced that I'm attempting to tank the share price is, from my perspective, a mystery. As I said in the other thread, perhaps it's time to take a break from the paranoia powder?
Hi ic52,
I'm sorry you've found yourself in this position. Panic selling is rarely the answer. I was seriously 'down' in early 2020, but held my nerve and things resolved themselves. I'm currently holding with the intention of buying more because I think that SLP is currently undervalued. The forthcoming results should, hopefully, result in a bounce back.
@Quiggers52 - I certainly appreciated your input and the time you took to answer my questions. Thank you.
@Guvvi - You've certainly not offended me. I'm not actually offended by any of the responses *I've* received - 'bemused' would be a better description of my emotions, but I agree with Quigger's earlier comments regarding Velo's 'na-zi' insult. Not cool. Not cool at all.
I've repeatedly asked for the input of other people. Help and advice has generally been very forthcoming, but has resulted in accusations of nefarious intent from others.
"The Shemale certainly loved your alternative 140 valuation and zeroed in on it with some glee."
I presume that insult* was directed at me. If we're descending into the gutter, let me lay my cards on the table.
I think that charts are completely worthless for predicting the future performance of a share. Your own predictions, from earlier this month, have (so far at least) been completely wrong.
"Thank Goodness August is unaffected. I expect the algo's to settle down by mid July so will update mid month for July.
9.6% gain for July is acceptable, is it not? (into the 130's)
- as it still leaves mega, knock-your-socks-off-August unaffected."
You're still persisting with predictions regarding the share price, which is certainly brave:
- If you're wrong, you lose credibility. Also, given your hissy fits and insults, you're opening yourself up to public ridicule and 'told you so' retorts for the rest of time.
- If you're right, it doesn't actually prove anything - i.e. it's a coincidence. Even a stopped clock is right twice a day (only once in Italy).
With regards to my apparent 'love' of the 140p valuation, I asked for other people to contribute their ideas. Two people came up with near identical DCF valuations. I then asked if we needed to correct for in country risk and a value of 140p was suggested. I then asked for clarification on how that value would be used by that person.
Does that equate to 'love' or 'glee'? I'll let other people decide.
It is strange how a free exchange of ideas becomes something sinister to so many people on this board. You really do need to stop snorting that paranoia powder and perhaps start opening up your mind to new ideas and outlooks.
* please try harder in future.
It does seem crazy cheap at the moment. I wish I could understand why.
If it is being actively shorted, the positions must be under 0.5% because no short positions are being declared by the FCA. Perhaps there are multiple short positions, that are all deliberately under the threshold? Does anybody know what the regulatory position is for that situation? Do the FCA add up the different short positions and declare that x% of shares are being shorted or are declarations only made on a 'shorter by shorter' basis?
Even if the falling share price is due to a shorting attack (there's no evidence that it is), it doesn't explain why SLP is being targeted. I can only think of two motives:
- The shorters consider the share to by overvalued and are expecting a major drop in share price (ideally bankruptcy so that they don't have to buy back the shares and return them to the people they've borrowed them from).
- This is an attempt to lower the share price to increase their positions at a cheaper price - e.g. shake out those people with automatic stop losses and take ownership of their shares at a discount.
I'm holding and may buy more.
@Velo
I'm not sure why you've created a new thread for your input. This is exactly the type of debate/input that I'm interested in.
To be fair to bangrak and Quiggers52 they produced multiple valuations and DCF was just the one that *I* picked out as being the same for both their analyses. They never claimed that DCF was a definitive valuation method or that it was the correct method to use.
Do you have a calculated 'fair share price' that you're willing to share?
The big boy investors have dedicated teams that calculate these things. We, as a 'team' of small investors, need to bounce ideas off each other and attempt to beat 'the market'.
Please share your thoughts and let's see where we end up. Surely, that's the best approach?
Thanks for clarifying.
I think I need to up my game in terms of analysis. If either of you are happy to share your knowledge or calculation methodology, I'd really appreciate it.
In terms of intrinsic value, is that just to be used for determining if the share is currently undervalued/overvalued or is it something you'd use in sell decisions - e.g. share price is over 140p, so you've achieved your idea of fair value and would be mindful of selling?
Quiggers52 and bangrak have both arrived at almost exactly the same DCF valuation of 175/176p.
Do we then need to apply a discount to take account of the risk associated with operating in South Africa? JP Morgan have predicted a contraction of 3% of GDP in Q3 due to the recent unrest. This contrasts with the predicted 1.1% growth prior to the trouble.
I expect the big boys have factored this risk into their valuations, so we may see limits to the maximum share price that can be achieved - i.e. they won't overpay for a 'risky' asset.
Any ideas? Is the country risk mitigated by the potential rise in PGM prices? Can we agree on a percentage value?