Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
It's all well and good saying "last time share was here" but I like to be more pragmatic and consider a few more variables rather than just historical share price like a chartist may well like to do.
Was there a personal disposable income hit due to a multi-year global pandemic "the last time the share was here"?
When the pandemic subsided was there then a global inflationary crisis "the last time the share was here"?
With the global inflationary crisis causing people to tighten their belts, was there then a need for people to not unnecessarily spend money (on food, clothes, holidays etc) "the last time the share was here"?
Was there an impending risk of the start of a global recession "the last time the share was here"?
I think you see my point.
I think this has further to fall. If ASOS report a PBT of £40m which is the average of their rather large range of £20m to £60m range. For a company presently valued at £850m, that's some paltry numbers and will further spook holders. There are no signs of shorts closing at present which indicates the big boys expect the share price to fall further.
With Autumn just 2 months away and global inflation growing, the largest contributor of which is energy, I don't see any improvement in the share price well into 2023 when hopefully there is a solution to the current causes of inflationary pressures.
Until then, this is on the watchlist.
Dropping like a stone. 17% down in just over a week whilst making billions in profits. Has the market gone mad?
Your opinion is based on what? Silliest thing I had to predict oil at $40pb in 2022.
Not a single commentator from any well known organization, OPEC, IEA, banks such as CITI, Barclays, Goldman the list goes on expect oil to drop below $100 pb well into 2023.
Even if the "guns fall silent" as you put it in Ukraine, $Billions of dollars worth of damage have been caused in Ukraine aswell as it being a humanitarian and refugee crisis. No western powers will look to drop Russian sanctions anytime soon. Russia is currently a Pariah state and that's going to last for a long long time.
Considering sky high oil prices and no view of them abating with China opening up and depressed supply with Russian oil out of the mix, I think the drop is excessive when comparing inflationary worries vs Shell's business environment.
Shell is still making obscene profits and Autumn is 3 months away.
I think it's important to remember that high oil prices are here to stay into 2023. The EU are close to agreeing a total Russian oil embargo, you have the US driving season kicking off, alongside China opening up after stringent lock downs. In essence the worlds largest oil consumer and the worlds largest oil importer both ramping up as supplies remain tight. Further still, in 4 months time, we'll be heading into Autumn.
The market is primed for Shell and it's peers to thrive into 2023 and I don't really see any other businesses/industries at present that can literally print money like they can.
Any WFT is likely to have little effect on the oilies and is by definition a one off.
Quite rightly said, it wouldn't be the right time politically to increase the dividend yield. Shell have opted instead of small divi increases but furthermore of returning additional value to shareholders in the form of buybacks. In combination with the healthy profits from the rise in the oil price, I think it's working really well. Not only are the profits from oil spectacular, the number of shares in issue are dropping due to the buybacks, giving us PIs a bigger piece of the very profitable pie.
To put that in context, share price appreciation has been spectacular over the last two years in which I've made over 6 figure tax free (S&S ISA) profits, of which only £6k-ish thus far was via divi.
Whoops, I forgot to factor in the 0.5% stamp duty charge to re-buy which would be around d £1.2k so the difference would be smaller still at around £1.5k; hardly worth the day trade risk with the longer term trend still upward.
If you look at every ex-div date since q1 2020, Shell has seen at least a 2% drop on the day on 7 out of the 8 dates, with the 8th being something like a 1.5% drop, however if you look at the share price over the same time period the trend has been an upward straight line. So the question really is, is it worthwhile performing a day trade because the SP drop will be lower than the dividend payment.
In my case, I have 9,350 shell shares so I'm looking around £1.8k in dividend payments however if the share prices drops 2% from the current price of 2383p, that's a value drop of around £4.5k, a difference of £2.7k which isn't the end of the world as I'm largely expecting Shell to continue rising into the £25-£27 range.
Decisions, decisions.
I don't see why certain political persuasions are shouting about a windfall tax on oilies all of a sudden. Only a year ago during the height of the pandemic, oilies were making substantial losses. The increased money generated by oilies now will directly benefit consumers in the long run with capital investments in new projects such as in the North Sea and planet friendly Green initiative investments.
If they want to raise more money, then they should go after the elephant in the room; Big Tech. Amazon paid just £492m in 2020 UK direct taxes, a tax-to-turnover ratio at just 0.37%! For context, the higher rate of income tax for an individual in England is 40%.
There is a reason ethical investors/funds tend to avoid oil and gas. Oil and gas companies contribute massively to climate change through their production of oil, petrol and gas. Oil companies are responsible for pollution and environmental damage across the world, oil spills such as for example the BP Deepwater Horizon disaster. Air pollution from fossil fuels is known as the "invisible killer." and estimated to kill almost 4 million people globally annually according to the WHO.
Yes the world is still dependent on fossil fuels but make no mistake, oil kills as well as enables life on this planet. So when you kick up a fuss that Shell has bought Russian oil which is funding the war against the Ukrainians, is that worse than the 4.2 million who die annually globally due to air pollution, anyway, war or no war? Did that not factor into your investment before this Russian purchase?
Now in terms of Shells explanation of their Russian oil purchase, they bought the oil to ensure the energy industry could service people across Europe without interruption, without which it couldn't guarantee it's provision. It was purchased in accordance to the law and breaks no sanctions. Heck, the West in general is continuing to buy Russian oil and gas and has not pushed to sanction this part of the Russian economy as we rely on it heavily. Shells profits from any Russian oil purchase henceforth will be given to funds in order to assist Ukraine.
It's a morally contentious game investing in Oil and Gas so I would politely say to try and be less sanctimonious with your disgust at the Russian oil purchase. The Oil and Gas industry has never had it's hands clean and never will.
Very grown up response to my post Rusclegg87. Found the board clown. Every board has one.
Hi everyone,
Hope you're all well and keeping safe. I'm back after many months away from this board.
I like to make my gains and not look back for a while, otherwise eventually the house will clear you out. Glad I kept to my strategy as the SP here is unsurprisingly atrocious right now. Having made significant gains in Cineworld early last year, I'm considering Cineworld again. I've since made and am continuing to make a nice killing in oil stocks, particularly RDSB, with a bonus 3 dividend payments so far totaling £5k alone. Safe stocks are boring but are consistent! Time now though to consider something riskier as a recovery play with the profits.
PROS:
- Management own significant stock so less likely to dilute shareholders when raising cash as a first option.
- Fairly decent 2022 movie lists overall.
- Omicron likely to become endemic in 2022 meaning less likely chance of further killer lockdowns affecting the cinema business.
- Disappointing results from streamed movies like The Matrix and others may mean less blockbusters going straight to streaming platforms.
- US listing intentions to bring on new investors.
CONS:
- Mountainous $8.3 billion debt pile to service.
- Ordered to pay almost $1 billion ($957 million) to Cineplex
- Damages awarded to Cineplex are in excess of Cineworlds available resources.
- Q1 2022 upcoming movie releases don't look all that great.
Mountainous debt pile and damages may mean investors are less likely to invest in a US listing.
Balance sheet at the half-year end showed current assets of £0.6bn but current liabilities of £1.8bn. It means that if Cineworld retained its level of cash and received all the money owed to it in the 12-month period, it would be $1.2bn short of paying all the money it owes in the same period. I.e. ‘negative net current assets’.
- Cineworld’s lenders have already waived/amended a number of operating/financial covenants. Without this, the company would have failed to meet its obligations, and given its lenders the right to call a default and enforce early repayment of the debt. The current covenants will be tested at 30 June 2022 when net debt is required to be no more than five times EBITDA. The July-to-September 2021 quarter was a washout for Cineworld. And while it did report a positive performance in October. As things stand, with four loss-making months out of the first five, the likelihood of Cineworld avoiding breaching its 30 June net debt-to-EBITDA covenant is all but impossible. Lenders could then call a default or insist on a debt for equity swap, leaving existing investors with practically worthless shares. Either way, bad for holders.
What possible way is there for Cineworld to survive this I wonder. Do I take a small punt in the 20p-30p range on a potentially recovery punt. Decisions, decisions.
Accidentally posted before finishing
....I fully expect Q4 2021 and Q1 2022 results to be stellar
We are currently in Autumn, fast approaching Winter 2021 which doesn't start until 21st December an ends on 20th March 2022. Gas and Oil prices are still in the $80 range, and with Winter demand on the horizon, demand is expected to increase over the next few weeks and months.
RDS are playing this extremely well, retaining the divi level, paying down the debt and essentially downplaying the results as COP get's underway this weekend in Glasgow. I fully expect Q4 2021 and results
Just curious as to the holdings of the typical Shell investor here on these boards. Feel free to not answer.
I'll go first, I have 9,350 units in my ISA at an average of 1357p and 1,096 units in my SIPP at an average of 1408p.
So I have 2 choices according to HL, to sell my tradeable rights or take up rights.
I have invested £15,000 in Easyjet and the current value is £11,286 so I am down by £3,714.
I have the option of selling my rights for £2,232 at current prices so by doing so, my total Easyjet investment would be down by £1,482 or 10% of my initial investment.
If I opt to buy the extra 1,272 shares I have access to at 410p, I'll need to invest a further £5,215, taking my total capital investment to £20,215. With the share price presently at 587p, my investment would be worth £18,795, or 7.5% down of my total investment. Hardly worth raising the initial capital investment by 33%, for a mere difference of +2.5% based on current prices, considering the potential risks still present?
Also since my investment is in a SIPP, I'd have to sell other dividend paying shares to buy the extra shares as I don't have any further money available in the account.
Am I right in thinking, it's hardly worth taking up the rights unless the feeling is Easyjet is likely to soar in the future which doesn't seem likely anytime soon.
What's the thoughts here? What are people opting to do with the rights they have been allocated?
To get to the same MCAP as pre-covid, the share price needs to reach 1150p.
That's a further 20% from current levels.
Smithy keeps reporting my posts and they're not even bad. lol!
What Smithy means to say is, the SP isn't looking for him as his short at the 500p range is getting torched.