Member Info for JTS13

Posted on Monday that 8.615 region could be a bottom due to the 61.8% retracement. Whilst recognising that there is significant seller activity, it does seem to be holding true to basic technicals. All things need to be taken into consideration that there was an initial rise (post relisting) from 4.9p. That's still a significant uptrend from a technical perspective.

Stochastics today ended marginally in the positive territory, whilst still highly oversold, and close was just a squeak under the 20 Day MA of 9.33 (here closed at 9.3).

A close in region of 9.5 tomorrow should start a new uptrend. With a clear new floor, my first target would be 12.27 and then on to a retest of the 14.6 highs. Maybe 3rd time lucky. If that breaks, then on to recover some of the losses from last year.

But who knows... Just calling it how I see it

Beginning to move here - albeit slowly.

I sent an email to investor relations last week. A Ms. Catriona Buckley was very quick to reply and mentioned that we will receive an update shortly...

From my calculations, GRID has 174 MW operational at the moment, with an additional 100 MW that us supposed to be due any time around now. It's the timeline on this 100 MW that is going to determine the performance of GRID this year. They've also got another 50MW already commissioned project that they said they're looking to acquire (17th Feb RNS). Would also be good to hear an update on how due diligence is progressing there.

Truly, 2020 will be a transformational year for GRID, but increasingly likely that 2021 is going to be the year when that transforms into SP growth. Guess now's good time to buy before the rise?

Nearly hit the 61.8% fib retracement level of 8.615 this afternoon. Would be nice to see a bounce from there, especially given the high fundamentals/demand we're seeing atm

Thanks Bumbling for the reference. It's a great point, with regards to how some energy providers (like biomass) are contingent upon broader supply chain in order to operate. Wind, solar & hydro much less so I'd expect.

Posted this also on TRIG... Thoughts?

Worth taking a note of monthly consumption data distributed by national grid: https://www.nationalgrideso.com/document/166976/download

21966 GWh used in March, down 12.3% from 25032.71 GWh used in February. Renewables are down as a sector, but not specifically due to coronavirus. We need to bear in mind that that (as per recent TRIG RNS) wind generation for Jan & Feb were at significantly higher levels than normal, whereas March was less windy in general.

My reading is that whilst energy demand is noticeably lower as result of spring coming, quarantining and industry slow down (folks see the PMI data, wow!!??) renewable energy seems to be coping ok at the moment. I'd like to think that they'd scale back carbon intensive sources of energy before clean energy. And I think we can see that happening . Coal performance about halved. Nuclear also seems scaled back. Whereas hydro and biomass are business as normal, and wind/solar etc varying according to weather (which is biz as normal also, no?). Perhaps main competition will be gas

Anyone else observing anything?

Worth taking a note of monthly consumption data distributed by national grid: https://www.nationalgrideso.com/document/166976/download

21966 GWh used in March, down 12.3% from 25032.71 GWh used in February. Renewables are down as a sector, but not specifically due to coronavirus. We need to bear in mind that that (as per recent TRIG RNS) wind generation for Jan & Feb were at significantly higher levels than normal, whereas March was less windy in general.

My reading is that whilst energy demand is noticeably lower as result of quarantining and industry slow down (folks see the PMI data, wow!!??) renewable energy seems to be coping ok at the moment. I'd like to think that they'd scale back carbon intensive sources of energy before clean energy. And I think we can see that happening . Coal performance about halved. Nuclear also seems scaled back. Whereas hydro and biomass are business as normal, and wind/solar etc varying according to weather (which is biz as normal also, no?). Perhaps main competition will be gas

Anyone else observing anything?

Indeed, a very valid point. From memory, CAML targets 60% IRR or something high like that. Not a lot of mines around, and probably fewer with large resources that offer such attractive returns.
Equally, there is long term and long term. Won't personally consider this a major concern for another few years myself

It's always good to skim read a range of sources @Eviking, but glad to provide some extra insights if helpful

Hi Eviking, good job in securing some profit when you did. That's always the aim of the game

For myself, I had sold off part of my holding a month or so back and bought it back a few weeks ago at a substantial discount to which I'd sold it. I usually buy more in the spring due to foreseeable rises into the results and dividend - but held off this year because of the virus uncertainty.

Consequently, I have a manageable holding here which I am content to leave invested. 10-20% fluctuations don't really bother me on LT plays. Equally, per a post I made a wee while back, I was purposefully awaiting this RNS prior to make any decision about buying more.

In my case, I will not... The reason being that whilst the virus situation seems to be improving in certain countries (like here in the UK... I mean statistically, not per front page media blah blah) today's RNS clearly highlighted that CAMLs 2 operating countries are early stage in the virus. Now that hasn't impacted business yet, but the RNS infers that there may be growing risk of that happening. That's why they've made the decision to reserve cash. It is therefore probable that within 1-2 months from now, either one of those countries could be tightening measures and closing non-essential businesses. As we've seen in Spain, SA and other countries, this includes mines.

For myself, I'm essentially hedging risk. I shall keep my existing holding here. So if things don't deteriorate and SP goes up, then I have some gain and may top up further into an uptrend. Equally, if a problem does arise and a mine is shut forcing a further collapse in the SP, I have cash on the side where I shall certainly be looking to take advantage of that situation and average down.

Expect copper to be volatile over the next few months as Q1 and Q2 GDP data gets released - particularly from the US. It's probable that this next 1-2 years could be rocky, but I'm highly confident in CAML and copper in the long term.

The above is just a quick overview of my own thinking. All the best with your own investments

CAML was last at 240 in April 2019... So you predicted in April 2019 that Coronavirus would materialise and would urge CAML not to pay out its 2019 full year dividend of 8p (which it can afford - but prudently reserved, cause they don't know how this situation will further materialise).
And with such an amazing gift of foresight, you chose to short CAML!!? Nickel, why didn't you leverage up and short any of the major indexes. You could of retired last week!

Joke!

Paying no dividend is a prudent and responsible decision. EBITDA was down slightly, but in line with guidance and margins. F2F is still exceptional. The potential problem here is for a mine shut down due to the virus, but where the company might need to continue paying payroll for 3+ months. That would require cash. If that - or something similar - does not happen, then the cash will be returned to shareholders at a date when this risk is no longer.

The update looks good to me, and as an investor I fully agree and support with the ethical decisions made. Safeguarding life comes before an 8p dividend!

Copper has has also dropped and may hover around these lows for a while. Perhaps the next 12 months might not be 'business as usual', but without any major shut down, CAML can comfortably weather this storm

That being said, just remembered this line from previous RNS "cashflows is enhanced by approximately 75% of the year's revenues per MWh generated being fixed (including subsidies)". So hoping all is good

I'm mostly in UKW, but have a few here too. Industry will broadly be in the same position I'd think. Eitherway, with BoE base rates being at all time low and equity markets being highly volatile, plays like this - even if they happened to reduce their dividend slightly - are still some of the best / safest plays on the block

Interesting... Equally, explore UK electricity consumption per Gov data (e.g. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/875400/Electricity_Q4_2019.pdf)

Chart 5.5 clearly shows that out of the 294 TWh used during 2019, industrial & commerce makes the significant share of consumption. With shops and businesses closed due to the virus, this should be resulting in significantly lower levels of demand.

Also illustrated in Chart 5.6 is that residential electricity needs are cyclical, with Q2 & Q3 being noticeably lower demand (40-50% demand fluctuations from Q1+Q4). Spring has arrived and Q2 starts tomorrow. People will be reducing their household heating with the arrival of warmer weather - although, some may be off-set by more people staying at home for work.

TRIG, UKW and other renewables on here have already stated that wind production levels are higher this year, so not anticipating any problems with keeping our freezers cool...although, that'd be a reason for investing in BRIG or something similar I suppose

Contrastingly, what I've mentioned above could indicate reduced levels of demand outstripping any immediately visible reductions in supply. I'd like to see the 6% of imported electricity dropped off first (if needed). Main thing is that we don't want any price wars due to lack of demand... that'd impact TRIG worse than the alternative

Surprised that there hasn't been an update Re: impact of coronavirus on business. Personally, I interpret that a bit negatively. The game changer here is to do with Wickham, Red Scar and Thurcroft being commissioned in Q1/Q2 2020. RNS was received saying that Red Scar acquisition was completed early Jan, but can't remember seeing anything since - or any mention of the other 2.
Without this, doubling production and dividend doesn't seem too likely this year. And with Chinese supply chains having been shut down since Jan, followed by our restrictions here, we could be in for some long delays for project finalisation.
Worst case scenario is probably a delay of say 9-12 months? Other ESG funds in energy paying out approx 7p dividend on a 1GBP NAV typically go for a 20-30% premium (pre-virus and hopefully afterwards also). I would like to target that for 2 years from now... Other limitation here is that it's not PI friendly due to use of derivatives. Makes it more fund or professional investor type share which can limit liquidity and movement. Not a big issue, but don't anticipate it ever getting to the same PE as other ESG funds

Interesting article from US: https://www.greentechmedia.com/amp/article/woodmac-distributed-storage-outlook-shrinks-for-2020-due-to-coronavirus As mentioned above, if development is not done already, anticipating delays like US is seeing for the sector

Well, seems that probability of getting those top ups at close to a pound are long gone now....

Recognise that Slieve Divena was agreed in Feb, but also a positive that UKW is seeking to honour growth agreements and not needing to defer or reserve cash. A further positive indicator I feel

This has started to re-rate nicely. Anticipate some rockiness over the next couple of weeks as people adjust portfolios for end of year. Equally, last time I anticipated some decline we went up around 10%. Think this will gain renewed interest come next dividend installments

Seems to be about as safe as they come

*fundamentals

Seems that my last word ran over the word count limit.

PS: I do appreciate a discussion like this. Not always common on boards, but there are some good posters who dig out objectively critical viewpoints. After all, perhaps something can be brought to light which identifies an unrealised risk, which in turn presents an opportunity for taking an action to prevent unnecessary losses.

Enjoy the rest of your weekend as best you can in these quarantined times

Afternoon ADG89, first, thanks for a good response as to sharing where your logic flow is coming from. There will naturally be areas where we may just have to agree to disagree.
I note your comments on Amazon and ASOS as examples. Obviously this is not the time to visit in person, but suggest that you go online and do a bit of research into their backend / warehousing and distribution processes. You will discover that Ocado is built on the philosophy of being the next generation… It’s like comparing the latest high-speed wifi with old dial-up. They achieve the same purpose, but aren’t really comparable beyond function.
With regards to that, this is specifically why Ocado are experiencing difficulty whereas “old” delivery systems are actually able to have a more flexible response. i.e. amazon CAN just turn around and employ 100,000 new staff to boost their manual processes. Ocado CANNOT just bring a whole new series of robots onstream, and they also cannot just flood their warehouses with humans for health and safety. Hence they cannot take full advantage of this surge in demand and face the predicament of turning down a once in a lifetime (hopefully) business opportunity cause by this terrible event.

But then, it is via these “cannots” that debate emerges. Many see this as a reason to sell, or doubt the business’s future. I personally do not. I see it as the natural limitation of Ocado’s business model, the actual antithesis for Ocado’s entire investment case. Meaning that if Ocado could just expand by the desired amount, I would sell on the spike and not be a LT holder as I would no longer have an idea of what I am investing in. Certainly not a biz seeking to revolutionalise an industry for sure

The comments of some drivers have been circulated broadly by the media, yes. Personally, I’m weary of such articles as they are non-objective by nature (negative news sells) and generally give limited if any indication as to broader sentiment. Please do not take me wrong, I am not dismissing real worries of many people. But I do think that people respond to worry in different ways… Regardless, Ocado must be assumed to follow Gov guidelines, which would suggest that at any time, they may have up to a double digit %age of drivers / workers at home in self-isolation. This would certainly have an impact on performance, yes.
Equally, that’s why Ocado has engaged in counter-measures such as buying 100k testing kits for staff: https://www.telegraph.co.uk/news/2020/03/28/ocado-buys-100000-coronavirus-testing-kits-keep-staff-working/

You are quite right that should there be an outbreak which spreads within the company and shuts down a department, key supplier, hub or whatever, then Ocado SP does run the risk of being hit hard. Therein a short position would be a good place to be in. However, based upon what I’ve seen in the public domain, that sounds like a bet based on a worst case scenario, not an objective decision based upon currently known fundam

"Question for investors here, where do people see the profits getting to in order to support the current Mkt Cap / a higher Market Cap?"
Unfortunately, I think this form of question does not apply to a company like Ocado. By your own examples afterwards, Ocado should be compared to NASDAQ type stocks, like Amazon. These do not rate by traditional PE measures. Your question does not really apply well. Equally, converting the question to, what Mkt Cap would Ocado get if it were on the NASDAQ doesn't apply. Why? Cause it's not.

With regards to a short, I'd first question your timing. We are sitting in range of 1180-1250. Within this area, you have supports at the 4hr and 1day MA (50+100), as well as all of the Fibonacci retracement levels from recent high. I think you'd need an open below 1180 to have clear indication for further decline (my opinion). Even then, what's the target? Lot's more historical supports right down to 1,000. Not an easy ride....

With regards to your rationale for reduced business, I'm honestly on the other end of the spectrum. I can't see how a 1000% increase in demand and over 100% increase in business is a bad thing for key performance & financial metrics... No supermarket had 1000% inventories for paracetamol, toilet role or whatever else crazy folks were buying. I can’t see the rationale in investors who expect Ocado to suddenly increase their vehicle fleet, numbers of drivers and entire supply chains by hundreds of percent within a few days. Then what? Have everything redundant again in a few months from now? How’s that possibly a smart thing to do?

Personally, I’m looking forward to the next trading update. Anticipating a short spike after that as people recognise “increased” levels of business.

I do agree that many first timers had negative experience - like not being able to create an account or being unable to get a delivery slot. Equally, as far as I’m aware, this is true for every online delivery in the country. Not a unique situation… Rather, I view this virus as potentially setting a new trend, wherein more people will be buying online and that generates a larger market size for Ocado to tap into in the future. I don’t care if they slightly reduce market share when the size of the market doubles.

Whilst this virus is here, I’m expecting numbers to remain extraordinarily high. When the virus dissipates, I’m expecting Ocado to have a more efficient platform and operating process than ever before, and be in a solid position to secure forward growth...

Just my take. Also don’t mind hearing the opposing side though

Wonder whether or not recent government annoucements (about prioritising 1.5m people for home delivery) will also have impact on this...

Can understand the customer service complaints. But equally, any company that could deal with a 1000% increase in business must either work in some purely digital sphere, or have been terribly managed in the first place. Why would a company have such an excess in capacity? Under any normal day, we would label that as terrible project planning and complain about obscenely high operational costs

Whilst recognising the limitations, I do think that from an investor stand point, OCADO will gain significantly from this. Their bottom line has got to gain. Learning will be immense. And yes, there may be some people who have had a negative first impression and never return, but there will be others who have signed on and started to develop new habits of purchasing online. This is all leading into a more efficiently run and larger volume market biz op

It would of helped if the RNS (5 mins after your post) stated not only that production is on target, but that revenues are higher due to higher gold price... Staff safety is paramount. Upon this assumption, investors next question is about the bottom line. HUM are often overly indirect
Here's to a positive Q1 update when it comes

True...yet real threat exists wherein measures are taken that could close or reduce operations, such as those taken by SA yesterday.
Would usually back a gold miner during an increase in gold price. But have also been buying into the metal directly for above reason