Member Info for JohnLewis79

I think on one of my recent posts I reckoned the same, poss a small profit. Dont forget its 'achieved' prices that count not the headline number. If the mrkt is pricing the stock correctly, ie looking 12-18 months ahead then REA could be posting significantly better nos, which at 55 they dont see happening.
Next year I feel will be the making or breaking if that doesn't sound too dramatic and as long as cpo keeps above $800 it will be the making.

Radford for PM? Not as crazy as it sounds he may score more goals as PM than he does at MU.
Our current PM hunkered with DC in constant battle with the BBs has lost his MOJO and the CU&P drift in a slough of despond.

As the EU gather for one last crisis our elderly OAPs resign to being at the bottom of lists for ICU care as Maureen from Barnsley made clear. The NHS rationed priority care, tough if you were elderly lying and ignored on death wards even while capacity was available. Blunt triage guide lines effectively denied the elderly ICU treatment.

Many NHS workers railed against the uncaring decisions they were being forced to take, and paid the ultimate sacrifice while doing their best for patients. It's a fact of life that the elderly get left behind during pandemics so, dont get sick and dont get old.

Covid-19
07:00

UK 854,010 (40,745)*
Indonesia 385,980 (13,205)•

* 23,012 cases
* 174 deaths
• 4070 cases
• 128 deaths

Heres a few sobering facts on covid for a Sunday morning read. The average age of death from covid is 84 that's over a year longer than the av male expectancy of 81. There is evidence that many contracted it not from pubs, clubs etc, but from hospitals and care homes. Nottingham Univ Hosp said 29% of patients being treated in their hospitals caught the disease while in their care. Evidence-Based Medicine at Oxford Univ found that mortality figs are suspect because covid was not the main cause of death for nearly 33% of deaths during Jul-Aug who had covid recorded on their death certs. The ONS mis'recorded thousands of covid deaths.

Nearly 27m GP appointments have been lost (they dont want to see you). Hospital referrals are down 350,000 leading to delays in diagnosis of cancer and others which could lead to an extra 35,000 deaths. Since March figs for Hospital admissions for patients with non specific cardiac chest pains have fallen 41% (usually a red flag for heart attacks).
Admissions for gastrointestinal disorders were down 90%. More than 1m women have missed cancer screenings. Waiting lists for routine procedures such as cataracts and hip replacements have swollen to 100,000. The BH Foundation found 766 excess deaths from heart attacks & strokes in the age group under 65 between Mar-Jul. The list goes on and on...
Fifty % of England is under curfew or lockdown. Scotland has an increasing ridiculous tier structure. Wales is closed. Stasi officers patrol the streets with clipboards poking their noses into peoples homes and businesses, banning the singing of hymns at a funeral in Bridgend.

The madness continues. The economy crushed there will be fewer jobs for the young. A catastrophic overhang in hospital procedures unless your dead of course. Businesses lost forever and unimagineable National debt. The Covid Hell is alive and well.
Good morning all.

Are you a believer in the so called "efficient-market theory" which holds that every stock is fairly priced because it already incorporates all known info about the company? In effect there's nothing to be gained by digging for new information.
Here's an old joke about the above. Two University professors were walking down the street when one of them spotted a £50 note lying on the pavement. " Hey take a look that's a fifty lying there, I'm going to pick it up." "No don't bother said his pal its not a real one, since the mrkt is efficient a real fifty would have been picked up ages ago."

If you believe in the theory then all prices quoted must be the right prices and no bargains exist and forget about trying to outperform the mrkt, you cannot. I think the clue is the mrkt may well be efficient but not always efficient. The trick is to suss out when the mrkt is off its rocker when fear has the herd running for cover and prices are wildly out of kilter. When fear and greed run rampant prices cannot be rational and in REAs case i think even nonsensical.

That's why I'm invested here when REAs price is temporarily depressed due to some unknown stigma or misunderstanding about the company or its products, then i'd rather buy an out of favour business than the latest hot tech stock. I'm kinda' a buyer of what should happen not when it should happen and as for REA it's a time to hold and not fold. The company ain't dead yet.

A quiet end to the trading wk only the 30 finished in the red on Friday, off 215 at lunch it turned up smartly to close just 28 down. On the week the Dow, 500 & Nsdq declined, not recovering from the broad sell off on Monday. The small cap R2 added 6 on the week.
All eyes are now on the election, around 50m have already cast their votes and Biden still leads in the Polls winning the TV debate on points. The Bookmakers still have Biden a solid 1/2 front runner. In the 'Swing States' its much tighter, Florida in particular is on a knife edge for Trump who has been canvassing hard in the State this week.

The earnings season continues a'pace, 135/500 have reported most beating Wall's estimates. *Intel ($48) fell 10% after customers switched to cheaper chip brands and data center spend was squashed by management. *Amex ($101) missed 3Q profit forecasts stock off 4%. United Health & Walgreen B topped the big board, Intel, Amex Chevron and Boeing among the losers. Next week big tech will be at the ball, Apple, Amazon, Fbk & Google will present their nos.
A below par 7.8bn shares changed hands on the NYSE well down on the 30 day av of 9bn.
At close:
DJ -28 (28,336)
SP +12 (3465)
NS +42 (11,548)
R2 +10 (1640)
WTI $39•70
10y/tb 0•842%

Nos: Oil $41•67. Vix 28.
Gold $1903. Copper $3•142
Palm $803. $1•304. €1•099.
IDR 14,662. MSCI(W) 582.
Morning all.

Covid-19
04:00

UK 830,998 (44,571)*
Indonesia 381,910 (13,077)•

* 20,531 cases
* 224 deaths
• 4369 cases
• 118 deaths

A good wk for cpo putting on $23 closing at $803 and averaging c.$694 ytd. REA performed less well as has been the case for the last few months closing unchanged on the week at 54•75 on c.99,000 changing hands.
Other London Palmers did little, MPE the main casualty dropping 25. The KLPI runs 11% down ytd.
Have a good wk end all.

Just goes to show how tough it is to make headway on a palm oil estate struggling under poor selling prices and high outgoings. The P&L income statement at the H/Y showed sales were $62.4m (up $5.8m) on an average cpo price $689 (achieved $527) & cpko achieved $616.
Despite the better achieved prices REA still lost money at the op level and for the period. The bigest expense was other costs of $40m (wages etc), dep & amortisation of $14m & $6m of admin which left REA in the hole for $8m after tax.

H2 achieved nos 2020 will surely be considerably better if the cpo can stay around $800 and should get an achieved cpo price of c.$650 and cpko of c.$720. That might be enough for a small H2 profit and break even on the year. Until REA can realise achieved prices of at least $750+ the Co will continue to be in intensive care and as nobull rightly says replanting might be on hold for sometime. Costs, one can only do so much, many being fixed but debts and interest are draining the lifeblood of the company. At the H/Y c.$10m of interest was paid on bank borrowings & notes. The last time REA turned a coin ($14m) net was in 2014. Cpo average $837 and no doubt fixed costs were considerably less. That was then....

..........I guess you have to ask yourself how much would you pay for a palm oil estate (33,000 mature ha) with high (65%) running costs at cpo $650 break even / small net profit? The EV might be a zillion but nothing else is atm. However on a 10yr view 200 might be a steal if B100 ever came to fruition and cpo knocked $1000. Those of you who have access to a computer might calculate the net present value 10 years out with a terminal value. I can give you the formula.

Npv = CF1 +CF2 +CF3 +CF 4etc..
(1+r) (1+r)² (1+r)³ x(1+r)4
Where Npv is the net present value of cash flows in years 1,2,3 &4 and r is the discount rate. I did it longhand over 6 years (cf $9•6m) constant and came up with year

1 $8•6m
2 $7•9m
3 $7•3m
4 $8•3m
5 $8•2m
6 $8•2m
Terminal value $48•5÷43•951 = $110m (£84m/191sp). The obvious drawback is I've used $9•5m constant cash flow when they hopefully would increase over the period so could be low end mrkt value. Bofp calcs so of not much use given my maths but confirms REA is likely undervalued on another metric.

The global pop is forecast to increase by c. the pop of India by 2030. See what that does for the demand for palm oil and its many uses. I'd wager more than $800. I hope I'm around to collect!

The London stock exchange has a small cap sector but in the US they have a microcap one for companies whose markt cap is between $50 & $300m. Companies whose value falls below $50m (£37m) are called nanocaps and provide limited information so are inherently more risky, these are found on the OTC & 'Pink' sheet exchanges.

I'm thinking should not REA delist and enter the US nanocap world? That would be a first! Heh heh heh! Not gonna happen, there are no REA quotes on any global exchange I know of except London and the Mogadishu Mongrels. Time for the lse to organise a sector where REA would be top nano'cap dog?

Stocks closed higher during a choppy 400 trading range session, as the "will they, won"t they, sign up to a new fiscal payments? Wall is becoming tired of the pantomime goings on in Congress. In the real world Jobless new signings dropped below 800,000, better than expected but still remain stubbornly high.

The Dow put on 152 boosted by energy a sector which has been in the dog house all year, Chevron ($74) up 4% topped the big board. Financials coming a close second of the SP500 sectors. Currently 84% of those reporting Q3 nos (100) have beaten forecasts.
'
Coronas' did well, Gilead ($65) gained 8% & Novavax ($94) up 3% on the former receiving FDA approval for its anti viral drug remdesivir. Investors have been watching the 10ytb up to 0•850% its highest since June this has helped Bank stocks but not housing stocks. Also the small cap sector (R2) has seen a lot more interest and has outperformed the big 3 by 5% m-t-d and could signal an investor switch away from overbought techs. Risers outnumbered fallers by 2:1 on the NYSE and posted 23 new 52 wk highs and 1 new low on the 500.
DJ +152 (28,364)
SP +18 (3453)
NS +21 (11,506)
R2 +26 (1630)
WTI $40•63
10y/tb 0•850

Nos : Oil $42.36. Vix 28.
Gold $1908. Copper $3•150.
Palm $801. $1•306. €1•107.
IDR 14,693. MSCI(W) 580.
FF +13. DF +19.
Morning all.

Rea 158
Cpo 573
Oil $62
Gold $1507
Ftse 7324
All 4030
DJ 26,958
NS 8243
$1.283
€1.158
IDR 14,035

Covid-19
05:00

UK 810,467 (44,347)*
Indonesia 377,541(12,959)•

* 21,238 cases
* 189 deaths
• 4432 cases
• 102 deaths

Just updated REA EV at H/Y. (Mrk/cap + total debt - cash &). That works out at £275m or 626pps being the comprehensive value of the Co. No doubt that's the sticking point for any potential buyer. No one is going to offer 626 a share for a Co priced at 55. How to cross the huge chasm in value and is it realistic? If REA was valued at let's say a mrkt cap of £200m (455p) the EV would be c.1024p a margin of safety of c.56% and even that might be unobtainable.

The higher the margin of safety the lower the risk and in the first example the m-o-s is clearly unreasonable as it's highly unlikely you could buy the Co for that price. What is not accounted for in the pure numbers is will you pay more for a good business with good management at a sensible achievable price?
If so, perhaps somewhere between current low value and £200m, say £100m or 227p. That's not an unreasonable number from where we are now but still way below EV. I guess buyers and sellers have to be more realistic about current values in these covid times with a palm price still below its 10yr average. One thing for sure there is no 'speculative' number priced in the sp which means the Robinows are happy to stay put for the time being conserving cash unless offered a price they could not possibly turn down.

Yea agreed nobull but they will have to bite the planting bullet sooner or later and after all that's the companies lifeblood down the road. Oh well if it ain't the cpo, el nina, levies, fertiliser, lack of rain, interest, vivid it's no wonder we struggle to make ends meet!

Last week (42) REA trades total as of Thursday was flattered by the 2 x 210,000 buys. Ex those this week trading volumes are ahead. Current vol is c.92,000 c.67% buys. Doubt we will see much activity this late on in the week with cpo stuck in the $780-$800 range there is little to move prices or excite investors.
Other London palms except PAL (now suspended so holders locked in awaiting developments) have done little but tread water and until MPE report crop and output update in early Jan 2021, REA trading statement in Feb & Anglo prelims in April don't expect any fireworks.

Any rise in cpo above $800 might give rise to additional B30 levies so it's not a one way drop to the bottom line.
With crude at $40 the B30 program is finely balanced. Its estimated the B30 needs $100m a month to run so the Govt reserves will need topping up now. Currently the levy is $55pt and might increase by $5pt if the cpo price reaches pre set levels. A reduction to a B25 mix is not on the cards. Brent futures are seen trading in a narrow range of $41.90 in Jan'21 to $44.40 Dec'21 which is neutral for cpo as it stands now.

Oil World CEO Thomas Mielke said global palm oil output in 2021 will be hampered by the labour shortage in Malaysia, declining yields due to ageing trees and no new plantings as well as poor yield growth in Indonesia caused by low fertiliser application in 18/19.
However global consumption is forecast to rise by 1•6mt and the worlds biodiesel output was better than thought due to demand from the shipping industry. If Indonesia continues to expand its biodiesel program in 2021/2 it might give rise to a risk of a palm olein shortage for global food consumption.

Miekle expects both soybean and palm oil prices to average $820 & $730 respectively in H1 2021. He also expects Plantation share prices will be constrained by higher operating costs, additional taxes & levies as prices move on the uptrend.
Unfortunately palm oil is seen as a cash cow for strapped Govts needing money but they risk killing the golden goose.

Stocks traded in a 250 range with all 4 major indexes ending in the red for the day. Of the 11 major sectors 9 were lower with energy leading the laggards. Fallers outpaced risers by c.2 to1 on 8.8bn traded.

Companies reporting saw *Snapchat ($36) jump 28% on earnings beats which boosted other social media stocks. *Fbk ($278) gained 4%, *Twitter ($50) up 8%, *Pinterest($49) put on 9%. *Tesla ($436) jumped $14 after hours, posting its 5th straight profit quarter and reaffirmed its goal of producing 500,000 vehicles this year. *Travellers ($125) topped the big board for the 2nd day, *Goldman ($203) the dumpsters. *Boeing ($164) slipped $3 on sector sells but announced plans to build a new mid market airplane.

Investors continue to fret over the lack of progress on the stimulus bill and rising infections across America and Europe have kept investors powder dry. The Feds 'Beige' Book published 8 times a year ( it summarises economic conditions) said it saw modest growth in economic activity across most US regions.
Trump & Biden resume their shouting match at the last of their debates today. Biden continues to lead in the Presidential race odds of 1/2 with Trump available at 13/8 in most places. The 'undecideds' thought to be c.10% hold the keys to the White House which has the blue carpet ready to be rolled out.
At close:
DJ -98 (28,211)
SP -8 (3436)
NS -32 (11,485)
R2 -14 (1604)
WTI $39.79
10y/tb 0•811%

Nos: Oil $41.52. Vix 29.
Gold $1916. Copper $3.178.
Palm $793. $1.312. €1.108.
IDR 14,675. MSCI(W) 589.
FF -24. DF -150.
Morning all.

Rea 165
Cpo $574
Oil $62
Gold $1502
Ftse 7328
All 4033
DJ 26,806
NS 8,186
$1.282
€1.156

Covid-19
03:30

UK 789,229 (44,158)*
Indonesia 373,109 (12,857)•

* 26,687 cases
* 191 deaths
• 4267 cases
• 123 deaths