The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Chatmandu,
Not necessarily. The math is very simple. Share buybacks destroy value when the asset is overpriced. Indeed that's true. For an undervalued asset, they have the opposite effect. It's all about where you see the intrinsic value.
In our case the buyback happened for an undervalued asset. The BoD clearly thought that sub 90p was too good a bargain, and pounced.
No concerns on my end.
Like clockwork they repurchase shares once the board deems them being below intrinsic value. It happens over and over again in those situations.
The impact will be on EPS since that will improve.
And the divi + special is nothing to be sneered at either.
Patience.
One can look at all this from a 'technical' perspective.
But this is trailing.
The bigger pictrure is that we are in a position where natural resources are becoming increasingly scarce.
Many factors play into this.
So we need to sit and wait. Developments and future political direction is not clear yet. Every one has the (rightfully) ambitious goal of going carbon netural or at least (as we see now), reduce the dependency on states incompatible with our direciton.
Technologically, there are challenges, agreed.
But the current push demands raw materials that PGMS provide. No matter what.
Loads of sentiments. It will take time to stabilise and provide clarity. In the meantime, positions like SLP return rather good returns to shareholders, alebit in the form of special dividends.
This is prudent and is a good indication of wise management.
It is not a trend right now, but sentiment can change. The valuation is favourable. The business is simple enough to understand and the competence is established.
I am waiting for the potential and the future plans to materialise. In the meantime I'm rather happy for the board to return value to the shareholders in a prudent fashion guided by experience.
Let's see what the future holds.
Chances of a special divi are low. But then, look at the commitment. It needs to be sustainable. It is. So where is the worry here?
Then there is always the surprise factor. The company is currently restructuring. The results are good. The valuation is favourable. Over a long enought time-frame one might have the benefit of the principal appreciating.
Enrcouraging.
Ride the waves.
Hi Manutdbo12
You need to look at the prill split for the palladium impact on SLP.
A supplier suddenly coming off-line, so to speak, is good news for us. We had a similar situation not too long ago which cause the rhodium price to peak in the 30k's.
And our board is not asleep. They listened and provided a satisfactory update as to the prospects of their capital projects and impact on grow. Let that sink in.
Eventually, all this translates into technical indicators as well, and there are plenty of good comments on that as well.
Here is an interesting point of view. Someone once pointed out that in order for all countries to achieve a living standard like the UK (and we are moaning here), our planet would need the resources of 6 more. Now, it doesn't matter how accurate this estimate is, but the overarching conclusion is that thre will be a lot more competition for raw materials as we go along. Some of these will lead to war even.
Does this ring a bell?
I stay long.
Well, there is the PGM basket price. But that's not the whole story.
Look at the recent broadcast. Jaco shows succinctly the options for growth, the investment required and the expected inpact on delivery.
Bear this in mind. The operations move ahead. This is not a static play.
These are fine figures indeed ;)
However, estimates are estimates, and house brokers are never neutral (their research doesn't qualify as independent).
Either way, this is now a quality income play. I'm sure growth will come back into the picture as well over time.
Very happy with the shareholder returns to date. No complaints whatsoever.
For those who cannot believe it, here is a very educational video. https://www.youtube.com/watch?v=QTXyXuqfBLA
Whatever.... look at the shareholders returns. These far superceed price action.
The macro outlook is nothing to be sneered at either.
In the current climate, it's not a bad position.
Patience.
Patirence. Let the clouds blow over.
*If* the developed nations are indeed seeing emissions as threat to stability and prosperity, then there are some macro-economic factors to consider that transcend all considerations to market movements.
It is simply not yet practical to continue with a western economy without ICBs. We don't even know whether we have the infrastructure in place to support the migration to EV, nor do we know whether the supply of raw materials is secured or sufficient.
Never mind the impact of mining the raw materials. What powers that equipment?
And there is the elephant in the room of supplying 'green' electricity as well as recycling the materials.
Without a doubt. EVs are a great piece of equipment and we definitively should reduce emissions and improve air quality overall. I am all for that.
But how practical/realisitic is this right now? Arguably, it's not, or at least, not yet. Unless things drastically change -- which means subsidies and standardisation. These don't happen in that sort of time-frame, esp not globally.
So we either switch to burning ethanol for ICBs (hello Diesel engine), or see legislation demanding more powerful catalytic converters in all existing ICBs (that can be retrofitted).
Then there is h2, but that's still a bit of a pipe-dream as well.
Make your own conclusions, but as far at the path of least resistance is concerned (and a lot of gvts work that way), retrofitting ICB cats is the short term fix.
I could be utterly wrong of course. And if I am, I applaud the international will and engineering excellence that lead us there.
Historically, that would be a first.
Looks like the house broker had a change of heart and set the TP to 170p, expecting another windfall divi around 3.75p. Reson given for current rise in SP is increasing demand from OEMs. The auto industry hasn't hit this one yet :)
The same broker also recons (older analyses), that there is no incentive for the auto industry to seek alternatives to cat converters until the Rh price hits 100,000k.
Don't we love for the price to correctly appreciate whilst collecting hansome dividends?
Patience.
Not without reason indeed.
Here is a bit of a background story to this
https://www.desy.de/news/news_search/index_eng.html?openDirectAnchor=2208&two_columns=0
If they can pull it off, ist great news for palladium indeed (or for PGMs in general due to their properties).
In the meantime, we might also enjoy a bit of an uptick as inflationary hedge.
Patience
It is a cash rich, debt free and good revenue generating company indeed. There are some questionmarks re future growth potential apart from basket price. But one has to trust the mantra that competent management (which it has) will over time provide increasing value for shareholders.
In the meantime, if last year's dividend yield is anything to go by (~8% incl Special divi), it is becoming an income play whilst we wait how the future direction unravels itself (if there is one).
I do appreciate that the board is not engaging in speculative phantasies about future plans. But I would expect some clearer picture to emerge over the next three years.
HNY and a prosperous one for all.