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MAG silver, which as far as i know only has 1 mine (the 45% interest in the junicapo JV with Fres) has a mkt cap of $1.9bn or £1.4bn. The 55% FRES owns should be worth £1.7bn give or take.
Given this and FRES overall mkt cap of £6bn which one is wrong? Is MAG way to high or is FRES way too low? Its a real head scratcher. Or is it just that US listed share trade at a premium to boring old london?
hopefully this one manages to rise 3/4 % per day into results next week as any lingering shorts change their mind and the wider market sees the value in a company that is increasing all the important metrics. Increasing revenue, increasing cash generation, increasing free cash flow, increasing profits and one would hope increasing dividend payments.
Plus A Useful kicker of an inflation hedge should people finally understand that the fed neither wants or is able to reduce inflation in the short term without a massive market blow up.
Where else in the market can you get that?
Hi poker, it wouldn't be via options by via swaps. Archegos style. Its the same thing in practise as being short say 500k shares, but you don't have to report. You have the same risk profile.
Options skew indicates what people are prepared to pay for puts over calls, but i have never been able to work out anything of use from that.
I would have thought all the shorts will be via derivatives that they do not have to report. Post GME no one wants to wave a flag saying that are vulnerable to having their nits squeezed. We know this one can move fast. Lets see where it ends up today and then more importantly after results day.
Can anyone enlighten me as to why gold production is going to fall off a cliff in the second half? with 428k Oz already produced they are 63% of the way to their yearly production target of 675k oz at the lower end. If they maintain output they will hit 850k oz and smash their yearly forecast.
Thank you.
Hi Carve, what blows my mind is that those numbers you give are not unrealistic. They have been puilling back on Capex for a while and really could post a crazy profit number if they wanted to. What i really really dont understand is who cant work this out for themselves and thus has been selling / shorting this name? It has been the right trade in the last 6 weeks but running it this close to earnings if you want to now get long or close a short you are going to move this name by 5% plus if you have any decent size of position. For an institutional player that would be a million share or so.
hi noggers, I realise this, but to any new entrants 4/5% will look quite attractive. I would anticipate a raising of the dividend or at least an acknowledgement that this is on the cards at the financial update.
momentum is key. At the market believes the FED will contain inflation / it is transitory. Pm prices being retreating from recent highs. No one wants to be in the PM miner space. A good financial report will help but i dont see it igniting things. I have now tucked these away into the long term hold locker and will take a look when silver breaks above 30. If finanicals are as good as i expect and they maintain thier dividend policy then this will yield 4%-5% in the next 12 months with , i hope, significant capital appreciation upside potential.
I would hope results will be both excellent and pivotal. Given the last 6 weeks however I would not be surprised to see profits up 100% year over year and these shares to trade lower we are in clown land at the moment. IAG moved up 10% near enough in the last 3 sessions because of a small sentiment change. FRES grinds lower. If substantial funds are short this then they are winning hands down, but will need to cover at some point. From where? no idea.
We do appear to be in the twilight zone. FRES should be making the best profits it has made since about 2012, (900m net profit on the full year) and certainly since 2017 (560m neret profit on the full year). Most people with a calculator and envelope can get to those sort of numbers, yet the SP is at a 52(?) week low and heading lower. By rights the dividend should be increased given FRES policy of paying out a fixed percentage of profits. Unless there is some terrible news we don't know about then the market appears to be completely uninterested in the fundamentals here. We will find out early august where the financials are. If i could i would not check the price until then, but i am sure i will check daily until then.