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MiddleEastMoney,

Everyone gets things wrong sometimes. And that's precisely why I don't post super-bearish comments on bulletin boards I'm not invested in and have no interest in investing in. [I actually have started comments when I like a share but feel it's the wrong time to invest - something I've done for DRV, BXP, and ULS recently - but that's always with a sense that I might be proven wrong]. I recently started invested in Direct Line (DLG) but even that took a lot of arguing on both sides of the fence and even now I'm aware I could be completely wrong if people have forgotten how to drive safely and there's loads of awful accidents on the road etc. Guess my point is that it's worth being a bit more nuanced and open-minded to the fact you might be mistaken.

And, having said all that, I wish you good luck. You've got bigger balls than me if you're day trading!

I like the look of this company but remain unconvinced it is the right time to buy when I expect the housing market to suffer over the next 6-12 months. Why?

1) The true economic impact of COVID-19 has been hidden by govt schemes (the business interruption loan scheme, the furlough scheme, etc) but what happens when they come to an end, and the business interruption loans need repaying in 12 months' time?

2) There is already a credit crunch with many mortgage lenders having largely gotten rid of 90% LTV options and even most 85% LTV options. This in turn should reduce demand and reduce housing prices.

Will look at this again at a much later date

Middle East Money,

I don't think you can blame the share price fall being due to Bushveld being a South African Company because it was a S African company when it was a multiple of the current share price.

Well done for making 32% portfolio gain recently but, from your post history, I can see you're not always right and you sometimes get it very wrong (e.g. you said EasyJet's share price would take to 350p when it was at roughly 500p and yet now it's trading at 800p, and I could dig out other examples if I wanted to).

So I'm not sure why you seem so definite about your bearish views of Bushveld. I personally feel this is another example of you getting something completely wrong.

Good luck with your investments .

Hahaa that's so true! The number of share tips I see about shares that have doubled or tripled already is laughable.

It's a bit like putting a bet on a horse when it's already close to the end of the race when the odds won't be any good ... except not because anything can then happen with a share price.

Happy to have you on board! :)

Completely agree.

As I've said before, the stock market as a whole is overvalued and will fall between now and the end of the year so the only way to make good returns is to invest in companies that are undervalued (even taking covid-19 into account), and there is no companies out there as undervalued as this beauty!

It is due to the fact the profit after tax takes into account the incredibly savvy Vanchem acquisition for a price so low they could sell it for double ... whereas the EBITDA appears to exclude this.

341p = 24% return from here.

Not including the almost certain dividend reinstatement of 22p+

Yes "Notwithstanding" = "in spite of" so yes they're saying COVID-19 will have no impact on production by the time we reach the end of this current financial period.

i.e. there's no reason for the share price fall since this pandemic begun so yes we should be back to 20-25p range already to be honest

Results Highlights

- Vanadium production increased 15% and the cost of production reduced down to $18.1/kgV only - far beneath the level vanadium is being sold at
- Profit After Tax is $69.2m (vs $49m)
- Cash of $34m
- Launched VRFB Investment Platform
- Invested in Vanadium Energy storage companies called Enerox and what is now called Invinity Energy
- Installed first VRFB in South Africa

Outlook
- Still on course to reach 8,400mtV per year in the longer term
- Big plans to become a leader in the Vanadium energy storage sector and will use the cash reserves to take advantage of the chaos caused by COVID-19
- Still intend to list of the Johannesburg Stock Exchange. It would bad timing at the moment but that is still the plan. This is expected to help us reach a share price closer to our fairer value.

and I believe that £27,500 will turn into £40,000 in the next 6-12 months. Lucky them!

Apologies but what news are we expecting imminently?

BXP was already looking good value at 42p ish so 36p has piqued by interest even though the company expects to be negatively impacted by COVID-19 in Q4.

Time for some more research...

Yeah my timing hasn't been the best on either of the 2 occasions I've bought in this month - I'm no day trader!

The 15th April Interim Trading Update was actually more positive than I would've anticipated, saying they were largely unaffected in April and May, but it's also clear the company believe they will be materially impacted by COVID-19 this financial year.

I also wonder whether the departure of the CEO (Gordon Wilkinson) who heralded this very impressive turnaround will have a negative impact in itself. The internal shuffles made to replace him will have a material impact on revenue and profitability (since the most senior guys' billable hours presumably are some of the most profitable so if they're promoted upwards and have less time for client work there's less money coming through the door I suspect).

As mentioned in my post on Friday I think a lot of their turnaround was dependent on rapidly increasing the number of staff. So I decided to check the vacancies section of their website and they are looking to hire someone out in Canada but that's probably because Canada is going through this PFI/PPP infrastructure boom. That 1 hire will not make up for the above.

Additionally it seems that the dispute resolution segment is a relatively small proportion of the business and therefore, even though I expect it to grow by a high percentage, it is unlikely to make up for the COVID-related falls in revenue elsewhere.

So, in the absence of anything being said since that cautiously positive 15th April statement, my feeling is that H2 of this financial period is likely to show a year-on-year fall. Consequently, even though I'ma big fan and believe Driver Group shall do extremely well in the longer term, I have decided not to invest at this point in time. Will keep a close eye on things with a view to investing when the time feels right. [For the meantime, I intend to continue investing in DLG]

and this time went for a larger amount because I'm feeling increasingly confident of a 40%+ return over the next 12 month.

Will continue building up a holding with another purchase in a further 2 weeks' time and in 4 weeks' time ... and so forth.

1) Fuel Duty is 38% down YOY during March, April and May 2020. This strongly suggests there has been 38% less driving. Possibly 40% less driving when you take into account the stockpiling that went on early on. Less driving = less motor claims frequency.

2) The Head of the AA has said that "Due to the disappearance of the night-time economy" there was still "very little traffic" after 19:00." This again is very positive news because most of the worst motor accidents must occur when it is dark, suggesting less claims severity.

This suggests Direct Line's Motor Loss Ratio over this 3 month period must be 50-60%. The night time economy still hasn't come back and this already looks like it should be a huge improvement.

On 9 June I suggested Motor underwriting profitability should increase £150m. I now think the improvement will be closer to £300m, which would mean profits would jump in this particular year. This will not be a sustainable profit level but it makes me certain that the dividend will return and there will be a special dividend later in the year.

Target: 400p + 22p dividend reinstatement + special divi

Sources:
https://www.bbc.co.uk/news/uk-53098950
https://www.thisismoney.co.uk/money/news/article-8440997/Treasury-loses-2-5bn-fuel-duty-payments-lockdown.html

That sell seems to have worked its way through.

Wish I had taken advantage of that dip but oh well, I'm still very confident this'll rise to 400p over the next 12 months (not quite sure when) so I shall be purchasing some more today I think.

OK, having done some research, I really like this company but I'm unsure whether now is the right time to buy.

Basically these guys do a lot of clever consultancy work for complex engineering & construction projects in sectors like oil and gas, infrastructure of rail/road/etc, renewable energy, and the like to help these projects run as smoothly and efficiently as possible. Then, on the other side of it, when things don't go to plan and their clients end up in a lawsuit / an arbitration, they provide dispute resolution services and also earn money as expert witnesses. All of the work that goes into this is charged as billable hours to the client = revenue minus the costs of their services = profits.

The company turned things around partly by getting to the position where they could employ more staff to charge way more billable hours. e.g. in the UK (their main territory accounting for over a third of revenues in 2019) they increased the size of their London office from 3 staff in 2016 to 14 staff in 2019. All of which is v impressive.

It's also v encouraging to see they're now working in Canada. PFI projects have been around in the UK for ages but it's a much newer thing in Canada, and so they're going through a PFI / PPP boom over there, so it's good to see Driver is getting a slice of the action.

It's very clear that the dispute resolution part of the business is going to do very well in the months ahead, however I'm less sure about the other parts of the business, because the pandemic must have caused fairly lengthy delays to loads of projects around the world all at the same time. Without the projects to manage / consult on / add value to, what is there for these non-dispute-resolution employees meant to work on and charge billable hours for? APAC revenues fell from £11m to £9m last year largely due to delays in contracts in 2019, so that really is a cause for concern.

Also doesn't help that there's not a split between dispute-related revenue and everything else to help assess the potential impact on the business.

So I remain convinced of the company but undecided as to whether it is the right time to invest. Will have to think it through more.

This appears cheap on a forward P/E less than 9.5 and EV/EBIT multiple of 8 ish from the looks of it ... but that'll all depend on the outlook which may have changed since that 15th April statement.

Will do more research and take a view as to whether to buy some shares here or not over the next week.