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This company and BOD have not put a foot wrong all year, they’ve continued to make huge progress and huge profits, and have lots of cash in the bank, so how on Earth is this share price this low?? Makes no sense

Will do some proper fundamental analysis later on to back this up, but this share price movement is completely unjustified and the current share price is an absolute bargain.

Bushveld was an absolute bargain in the 20s and the 30s etc, so how has it dropped into the 19-20p range is mental

Especially when it is so profitable and making so much progress!

LTH here since 2013. Know I'm much quieter than most but I also am outraged at what is going on here. It's completely unfair.

So I have also sent an email to market.abuse@fca.org.uk

Does anyone wish to email Panorama? The Private Eye? Etc?

Let's see what happens ...

* Especially when

Ultimately looks as though Vanadium production could easily reach 4,500MTpa within the next year and a bit. This would be roughly 76% more than the 2018 production figure of 2,560MT.

And, when you consider what a highly cash generative operation this is (because the cost of production is so low and decreasing!), it's clear that every % of production increase will translate into profits and more cash for the company to use for improvements/acquisitions/dividends/etc.

All of which evidences what a brilliant company this is going to be in a very short space of time.

The inherent value of the company will rise massively over the next 15 months and it will make it increasingly difficult (if not impossible) for the share price to stay at these sub 30p levels by that point.

And, if by some miracle, the disparity between the inherent value and share price value hasn't closed, other companies will try to acquire Bushveld shares, and it will be up to us whether to sell at the prices they're offering. (Look at what's been going on with EasyHotel recently for instance!)

Based on what we know, and if we were to assume Vanadium prices remain at / recover to 2018 prices, we are looking at the following:

2018 Vanadium Production = 2,560 MT (Vametco only)
2020 Vanadium Production = 3,400 MT (Vametco only) + 960 (Vanchem) = 4,360 MT total

That is a 70% improvement on the 2018 production figures.

2020 EPS = 4.93 (2018 EPS (2.9p) x 1.7)
P/E Ratio at 20.7p = 4.2 only

2020 EBIT = $147.2m ( 2018 EBIT ($86.6m) x 1.7)
2020 EV = $217m it is currently + $68m for Vanchem acquisition = $285m

2020 EV/EBIT = $285m / $147m = 1.9 only

On this basis, Bushveld should be trading comfortably more of 100p

Admittedly my assumption re Vanadium prices is unfair. But, even so, there's no way we should be trading at this price.

Especially Vametco's production will continue to increase to 4,200MTVpa, and Vanchem's production will be higher than 960MTVpa (as it ramps up towards that 4,200MTVpa level it is capable of).

I calculate the Enterprise Value (EV) / Earnings Before Interest and Tax (EBIT) ratio to be as follows:

Market Cap (@20.7p) + All Liabilities - Cash assets we get the following:

EV = (232m + 51 - 66) = £217m
EBIT (Profit Before Tax) = £86m (estimating we end up roughly the same as last year)
EV/EBIT = 217 / 86 = 2.52

When you consider that anything below 10 is considered to be very good, this is bloody crazy good value at this price!

To get an EV/EBIT ratio of 10 we would need to be trading at 78.0p a share.

I don't think the disparity between Bushveld's inherent value and market capitalisation has ever been greater. So how anyone is doing anything other than either buying or holding is ridiculous.

On this basis, my gut feeling is that this gap is going to close suddenly one day. Not sure when, but it has to sooner or later.

Free Cash Flow 42% up, EPS 22% up, cash reserves significantly increased, cost of vanadium production 5% down, and on course to reach the vanadium production target for this year. All of which is excellent.

The only negative really is the price of Vanadium has reduced significantly, but that should recover soon, meaning that the strategy remains sound, and the overall attractiveness of the company remains extremely compelling.

If we end up with a yearly EPS of 3.5-3.8p then we're currently trading at a PE ratio of about 5/6 - which is absurdly low. And the EV/EBIT ratio must scream value even louder, given the cash reserves the company has.

How are we trading at this share price ??

100% games are being played here

However, as is always the case, the share price will inevitably gravitate towards what is fair value over time. Eventually.

Been a while since I've calculated an EV/EBIT ratio but using my old formula for calculating EV as being the Market Cap + All Liabilities - Cash assets we get the following:

EV = (224 + 159 - 42) = £341m
EBIT (Profit Before Tax) = £86m
EV/EBIT = 3.97

When you consider that anything below 10 is considered to be very good, this is bloody crazy good value at this price!

Even if we were to calculate the MC based on a share price of 60p, the 2018 EV/EBIT ratio is still beneath 10!

For a company growing this fast, even 60p would be worth buying.

That's how much of a bargain 20p is!

This price is ridiculously cheap.

Whoever is selling/shorting this now is going to regret it!

Wow, he must feel so stupid now for having done that!

Great observation, Pdub.

It's clear John Meyer puts a tremendous amount of research, thought, and consideration into these predictions he makes.

It's also clear he adds a very healthy dose of conservatism into his predictions too, hence why he's often accused of undervaluing the company with his targets.

...and it's on that basis that we have strong reason to believe his 87p target will be achieved over the coming months.

And it would take something truly bizarre for that not to occur!

ignore the word 'barely' haha

I was going to say the sp barely moved back then but then realised that's only in hindsight that it looks that way. When in actual fact when we fell from the high 9ps down to 7p territory it represented a 20-25% reduction off the highs we had experienced back then.

People forget these things.

People forget how there were people on this board saying Bushveld was overvalued at 2-3p and how people should sell, before it rose to that 7-8p range.

People forget how many naysayers we have had throughout this entire journey. And that's why it's important to remind ourselves how far we've come, and how so many of the things we're seeing now have happened previously in terms of share price movements and shorters etc.

Shorters were with us at 3p, at 8p, they're with us today, and they'll be with us when we're trading at a much higher share price too.

Listen to them, because it's important to hear opposing points of view, but don't let it distract you from what's really going on. Because, if you do, you may find yourselves in the same position as those who sold at 3p in early 2017, who have missed on the tremendous gains made since.

Just imagine the sellers remorse those sellers must now feel, and the sellers remorse you would feel if you sold now and then saw us reach 100p and beyond.

Excellent post, Rich Ken - there's sooooo much to look forward to!

The current share price movements are not natural, and actually it reminds me of how the share price barely fell from ~10p down to 7-8p again back in 2017/18, despite amazing progress and landmark RNSs being announced

... only for the share price to multiple a few times over over the following few months thereafter.

In a similar way I believe history will repeat itself in some respects, and the share price/MC will sky rocket to new highs again soon!

Looks to me as though full year production will be 2,865 MT (taking into account the 24 day thing) + 960 MT from Vanchem

= 3,825 MT for the year vs 2,560 MT last year

= a 49.4% increase over 12 months

By which point the forward guidance will easily be over 4,000 MT too.

Along with everything else that is going on, I feel as though it really is only a matter of time before the gap between Bushveld's true value and current MC narrows.

And I feel more confident than ever that we will be trading at a multiple of the current SP within 12 months from now.

:)

Not like I’m doubting you but how did you work that out?

Holding my nerve was easy cos I had done the research.

I literally never even considered selling haha

Bloody well done to BBN, Orphidian and anyone else who predicted this back in 2015 when the share price was a fraction of what it is now

The BOD here are bloody geniuses!

As I said yesterday, this is an amazing company that is absurdly valued. And that’s even more true with today’s news of course!

Hugely undervalued. So I cannot believe this is falling in price.

A rebound must be imminent.

As a % of the shares in issuance that's near zero.

What a market we're in!