RE: Share price13 Jun 2022 19:14
POP31...I am always interested to read what you and RetiredBanker write.. I agree with your logic about TGA, as it also does my head in but I have 2 reasons to share my view with you.
The first is experience; and that logic, common sense, and sanity have totally gone from the market at present. Far too many investors, in my view, cannot recognise the value in a share even when it stares them in the face like a punch. I fear this is because those same investors cannot comprehend the scale of the cash generation of Thungela.
Of course, we all know the rail issues, discounts, fluctuating coal prices, the war in Ukraine etc but EPs, PE Ratios, and FCF, mean nothing to those who buy purely on price. You, Retired Banker, and others do not care about the price today or tomorrow because we got in when it was 300p or less...My average is 355p but originally I was in at under 300p, but sold and soon bought back in when I realised where this share is going.
The share is just under 20% of my portfolio and under normal circumstances, I would have sold some, but when the dividend is only going to grow, I see no sense in selling as to me, sooner or later some but not all of the market and investor community is going to wake up to what is going on here. I am prepared to wait.
however, the other reason is South Africa itself. I have a very good friend, a South African. I suggested he put £5000 into TGA and he laughed at me, telling me, I did not know what was going on in South Africa and in his view the whole country is uninvestable...He is not laughing now, as if he had invested he would be holding nearly £200,000 of shares paying a 20% dividend...He recently returned from SA and told me the country is a basket case..his view I fear is widespread and until the wider investor community realise that despite the problems in SA, TGA even with one arm behind its back can still make mountains of cash. In my view, the exclusion of Russian coal is not a situation likely to be reversed any time soon, and as we approach winter in the Northern Hemisphere, even anti-coal countries will, like the UK, be burning coal and TGA will be ready to supply that coal...What is the market expecting?. That is impossible to answer but when the amount of cash generated gets close to levels that are abnormal in a share, you fear something is certain to upset the applecart.. That may happen but as today's RNS shows TGA , is going to be awash with cash and future dividends, even at current operations handicapped by poor rail performance by TRANS, are going to be generous.. However, I think, we may see future falls as the market is petrified of interest rate rises on the way, inflation and other factors beyond our control...but in my view, central bankers are too late. they would need to increase interest rates to 10% or more to bring inflation under control and even at 5% they will bankrupt the economies they predict can survive higher interest rates. Coal Is King and long live the
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