Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I used historical earnings as the only certain reference...
This years earnings will be lower, and it’s hard to describe this company as a growth company. It’s customer base is aging and it’s sales last year were the same as four years ago. It has a very patchy record.
On a fully diluted basis, this stock is now trading on a PE of nearly 10x historic earnings . Paying down debt as they plan to will save a couple of million a year, not enough to boost earnings much. This is not a cheap company unless the top line really increases. Lots of extra costs this year as well (they are recruiting very heavily). Will need some very good forecasts to make this move. I was invested and optimistic until the new shares an aim move were announced.
Interesting article in the business section of today's TImes about online clothes retailers expecting "an avalanche" of returns soon. The thrust of the article is that during the lockdown many retailers extended their return periods to 60 days, and that during this period, many inexperienced shoppers bought on-line for the first time (unfamiliar with sizes, etc). All the majors and minors combined have $15bn of stock, much of which will have to be written down/off.
The recovery trade is over.......for the time being. Reality is setting in as to how slow it will take to get economic activity back up to where it was. Look at retailers.....all now rolling over. This stock may be cheap on last year's earnings, but we don't know anything about the current FY except that it will be lower. I thinks there will be some disappointment tomorrow (I hope not).