Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
A further dividend cut is not going to happen. They have already stated they are looking at a break even oil price of $35 and are already on there way to achieving this. I think it’s sensible to diversify and have a greater energy mix for the future.
My only observation is that none of the directors have made significant purchases of the shares at these supposed low levels. I submitted a question on this at one the recent results Q & A, but got no response. I suppose they will end up awarding themselves large share options at zero risk to themselves at some point with no risk. This could be a bargain, but sceptical at the moment.
The main risk here is whether governments are going to penalise/tax further tobacco companies due to Covid. They will be an easy target and I suspect popular target amongst many. That in addition to the fact that many will also try to give up due to the virus and try to live healthier. I suspect Covid has become a game changer for tobacco stocks.
ToffAppleton1 - maybe, but better to wait for the dust to settle. BAT is a great company, but with Covid affecting the lungs will it speed up the demise of smoking ? What with the disease, US election, major recession around the corner, idiot politicians etc etc not a great time to be invested at all, certainly not until there is more clarity.
DGR1980 - if they had been properly managed they would not have had to raise capital and would have had cash on the balance sheet. Tony Pidgley may he rest in peace, new the housing market was cyclical and as well as offloading huge amounts of shares over the last few years, built up a cash reserve. We are long overdue a housing market correction and this is just the beginning. Taylor Wimpey are a risk, ignore the fact the director participated in the fundraise, he will no doubt have this amount covered when share options get awarded.
The interesting thing about the 1st quarter trading update is that it has group sales of 13,380 compared to 13,978 in the same quarter last year which is circa 4.5% less, despite the fact that both Poland and the Asian figures have bee excluded in the recent figures. Now consider that the sale of the Asian business is roughy 25% of the current market cap and you can see what a great move it is. It is always costly and very difficult breaking into new markets, not to mention exchange rate issues etc. In this climate, sticking to the basics, concentrating at what you do best and strengthening the balance sheet, is always the best option, rather than spreading yourself thin, trying to manage markets that you don't know well enough, with all the local politics it involves.
Seen it all before, someone trying to buy in cheaply from the impatient. This a great defensive company with good cashflow, especially worth holding as we head into a severe recession and the potential of a second Covid wave. They have already started reporting financials excluding the Asian business ( as well as the now sold Polish business ) and the dividend is well covered and predicted to grow, which is high in a zero / negative interest rate environment. Patience is key and to ignore the noise ( 5 for 3 shares rubbish etc ). This will re-rate to circa £2.50 plus ( fair value ) when the deal lands and I wouldn't be surprised if there is not a share buy back as well as special dividend.
This is not a good move by Rishi, as previously house builders had the advantage due to help to buy and stamp duty cuts over the secondary market. With this move, that has now disappeared, which means more competition. I suspect that this will be seen as an opportunity for a lot of buy to let investors to sell and indeed Rishi admitted he wanted to see transaction volumes up. If this results in more properties coming to the market, coupled with high unemployment / under employment, expect house prices to fall a lot further. Who cares about saving a couple of percent, when the homes could be with considerably less in a year or so ( especially in the capital ). Housebuilding is a cyclical business and its been well overdue a correction, which normally comes every 10 years or so. Maybe Im wrong, but no housebuilding directors have been making large purchases of shares and indeed recently have been massive sellers over the last couple of years just to underpin my point.
Government infrastructure fund is going to be set up, so there will not be the need for share dilution as companies that win tenders can tap into it and Kier will end up using the profits generated to pay down debt. There is going to be an awful lot of unemployed to choose from that will keep labour costs down and increase margins.
Should be anytime now, but won't show anything concerning current situation as backward looking, they will however be updating on the dividend, but given the current share price, nothing is expected for this year and next. Made a good profit in the half year results which was reported as a loss due to a valuation mark down ( clever accounting ). I suspect that as they now have new accountants and with the current Covid situation results will take bit longer to produce. At current prices and giving a further discount of 30%, minus borrowings, then the land is worth more than than the current market cap. When you compare to Hammerson and British land, the price seems very cheap and can only assume it is a legacy of Woodfords involvement.