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Over the years I have bought into GEMD and sold - mostly at a (very) small gain.
There seems to be a lot of positive news about Gem, but this is nothing new and things can change quite quickly, especially in the mining sector (just look at today's rout of mining stocks)
So, whilst I am attracted to buying Gem, what is the general view of this share and whether it really is worth buying?
Nice to see that soon we will be in the mid 2s - 50% up.
But I remember not that long ago when the price was in the mid 60s and everyone was saying it will go to £1.
Then when it got to the mid 30's everyone was saying it will go to mid 40s.
Then when it go to mid 20s - well, you get the picture.
Rule No 2 of investing - never ever try to catch a falling knife.
Over the years I have been in and out of Petra shares - sometimes making gains, other times making losses, but in general not coming out of it too badly.
The situation currently is, to say the least, dire in the extreme.
In accounting terms, Petra Diamonds is no longer a going concern. Pre-tax profits have been tumbling for the last three financial years, as has EBITDA. Earnings per share has fallen over the last three years to minus (!) 22c per share. Net borrowing is $828million. Free cash flow for form is negative, so there are no funds to make improvements for the foreseeable future. Capital expenditure has fall dramatically over the last few years.
All of these metrics confirm that Petra are hanging on by even less than the skin of their teeth, and there is almost certainly no way back for them. Even digging up a diamond bigger than the world has ever seen is not going to save them now.
Together will all of this, Petra are embroiled (rightly or wrongly) in human rights issues, questionable tax dealings and ownership issues with the Tanzanian government. Petra are as close to the abyss as you can get without actually falling through it.
Over the years I have done quite well with Petra, and it is a shame that they have ended up where they are. Irrespective of the rights and wrings of management decisions and strategy, the outcome is tragic. If you still hold PDL shares you are going to be badly, badly burned and it is now too late to do anything about it.
And just in case anyone thinks I am writing this post to scare people to sell, and then pick up a few even cheaper shares for myself, all I can say is I am not going to commit financial suicide. Look at the figures, look at the accounts, look at the debt - it all speaks for itself.
It's going to be a bloody big hill for Portmerion to climb, so this is going to be a long term prospect. Meanwhile if they can hold the dividend then at least there will be some light at the end of this particular tunnel.
Yes indeed - it has come too far to be allowed to fail. The only question is - who is going to fund the project for the future? Chinese investors who have a vested interest due to the purchase contracts they have already signed> Or a post-election Tory government who want to be seen to be supporting post-Brexit Britain? Or a post-election Labour government who will nationalise (and therefore ensure failure) of this project?
My money is on the Chinese......
So, if potash / polyhalides is fertiliser, and cow sh*t is also fertiliser, then perhaps we should all be investing in cowsh*i futures just in case Sirius really does close down.
It seems to me that, other than the complete cancellation of the project, there are two options for Sirius. Either they will get the funding sorted out, in which case we can expect a significant jump in the share price, or there will be a (probably Chinese) bid forthcoming, which will mean a much lower jump in price, but a jump nevertheless.
If we believe the mantra that this is a project that has gone too far to fail, and that the Chinese are so far the largest customer for polyhalides, then it is more likely that they will make a bid, but not until the board either secure the funding or not. For a bid to happen we are probably looking at 2.00 to 2.5p a share. If Sirius get their funding then we are probably looking at 6 to 10p, with a post-start up price of 20 to 30p.
The doomsday scenario, of course, is that we are all desperately trying to catch that falling knife and will lose the lot.
Time will tell.
Buy, hold or sell?
And that's the dilemma - falling knife or shed loads of profit?
I'm leaning towards shed loads of money - but then most of the time I'm totally wrong.
But £5k of SXX shares is surely worth a punt?
So, there are several options here : This is a very strong buy opportunity on the basis that such a large project is not going to be allowed to fail; we are all trying to catch a falling knife and the share price will go down below 1p a share; there will be a takeover attempt (Chinese?) ; Sirius will go down the lavvy and the project will be shut down for 2 or 3 years until a solution is found; the entire project will be cancelled and Sirius will cease to exist; the government will step in and provide the necessary funds; the government will tell Sirius to go take a run.
Some of these will mean we lose everything and some of these will mean we should make a decent return on our investments.
My view is that this it a project that cannot be allowed to fail and that this is a very serious buying opportunity to make some serious money out of this - but maybe not in the next 18 to 24 months.
What is the consensus view?
Not a "bog" find - it should have been a BIG find. Bog finds usually end up as losers!
Just to clarify - Firestone have pre-tax profit of negative �6.5 million, net borrowing of � 33.5 million and a negative free cash flow of 14p per share, with a capex of 10p per share. Are they just chancers who are relying on a bonanza from a bog find, or is there some real substance to this company?
So - other than a large lump of 134 carats, why should I invest in Firestone? What do they have as a long term prospect that others do not?
I've been watching this share for over a year now. I bought at 48p, sold at 50p, and now Gemfields have managed to grow the share price all the way down to 38.5p. Interestingly the broker forecasts 1 year ago average 65p. None of the brokers got it right, and what we see with GEM is a falling knife. It might, just might, be worth getting in at around 20p.
I bought RDW at 322 so 360 -370 will do me just fine
Boxhill Technologies is a company that is less then micro size Turnover 3.3 million, pre-tax of 200k and net borrowing of around 7x pre-tax profits and less than 10k post tax profit.. EPS is -(.002) and ROE 77.2. I don't doubt your commitment, but what is it that you all see in this company/ Where will the growth come from? More important, where will my return come from and how long will it take?