Member Info for LunaNera

Is it really?

I am seeing a business whose returns are in rather high double digits,. A low forward PE (5.7) and a PEG of 2.0.

The bottom line is that on the quality and value metrics it looks rather good.

So what about their debt?

Just recently the company became profitable. It has 1.94M in cash with a net debt of -1.33M (both TTM). Compare that to these in 2019 of 1.44 and 0.14 respectively.

Arguably, their debt is no longer a going concern.

However, fheir low liquidity in share Capital, is. If one is not bothered by this, then this position offers a rather interesting opportunity....

DYOR

I'd rather the surplus would be put to good use, such as developing the company further, than returning the cash to shareholders. Given the excellent returns to date, this would be my preferred option.

Not that I would mind a dividend, but why can't this surplus go towards a mild expansion of their (brilliantly run) operations?

and there is this one as well. interesting outlook for platinum if industry proceeds with the hydrogen cell...

https://newagemetals.com/pgm-based-fuel-cells-applications-for-industry/

Indeed Tiger. Unfortunately one cannot rectify ones mistakes once posted on this board. *sulk*

"They are going for large increase in the dividend starting from a low base... 1, 2 and then 4c certainly captures the attention"
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Are they going for the Fibonacci sequence? Then the next one would be 6.

Indeed the yield sounds a bit high, makes me wonder as well...

"A company has a duty to reward shareholders with the right dividend decision when cashflow merits it"
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No, it doesn't have this duty. It may decide to, if it cannot deploy the capital sensibly, but it never is under any obligation to do so.

Not that I wouldn't mind a windfall dividend, mind.

Hi Jammy

Yes, it's a good one as well. Both are stellar. I prefer a position with has no leverage (debt) though. So the decision fell on SLP. That's enough exposure to this sector for me. My positions are rather focused. It would be a close call though. It depends on how one approaches investing. There are many ways to do this.

Excellent suggestion though. Many thanks.

it's horrible that one cannot make edits to posts.

It should have said: "The way I see it is that for as long as I am building a position..."

Apologies.

The way I see it is that I am building a position here there is a realistic potential of purchasing £1.00- for £0.50-.

I am in no hurry for the share price to increase. It's rather common sense.

There are some risks to an investment in SLP, and as the basket prices increase, so does the downside risk. I am rather chuffed to note that the board has a similar view (of the basket price turning and going the other way -- they've experienced this first hand themselves).

The company is in good hands, no doubt about it. But for as long as I am building a meaningful position I rather that it remains a good value purchase rather than storming into exuberant territory.

Totally selfish of me. I agree. But then.... so are many on this board wanting this to jump to prices I would simply no longer be willing to pay ;)

So, pleeze -- no squeeze!

Happy value hunting.

One can add BUR to the list of companies (and it's shareholders) having suffered from false accusations and manipulation from short sellers...

Every security traded is purely priced according to supply and demand. Buy a meaningful amount of shares in a poorly performing company and watch the price rise. Even when everyone knows it's going bust. The same goes for the reverse.

Thus markets are often efficient, but not always. They are open to manipulation if one has meaningful amounts of funds at one's disposal.

I shall wait and see. A profit warming is unlikely, given the strong update in June.

Eventually, they always snap back to intrinsic value. I cannot explain why but they always do -- Ben Graham

stoodio

Indeed a correction by 50% is hard to conceive (it would need to be a similar panic we've experienced 10 months ago). It was a welcome panic though. Some of my holdings in SLP indeed halved and this was a welcome opportunity to add more. With a balance sheet like this one would be hard pressed not to seize such opportunity.

I agree with you and doubt this will happen again to these levels.

PS: It would be Camel Blue -- this is by no means a recommendation to buy them or an endorsement to smoke. But since you asked...

Velo, this is our edge indeed. Take into account the recent GS paper expecting a new commodities super-cycle on the horizon, and we have a lovely concoction brewing for as long as it keeps unnoticed and thus rather cheap to build a meaningful position.

Funny that... I am secretly hoping for it to halve during a correction.... so we can scoop up even more at discounted prices ;)

Price target of 145p? That's totally unrealistic!

200p would be appropriate. ;)

Hi Velo

Did you look at Intel? Rather favourable valuation. They experienced a setback, but I see this as temporary.

Hope this helps....

Sirius, agreed on their outstanding financials at a reasonable valuation with a healthy margin of safety. Metal prices apart, people forget how well it is run. For a good example, see how they behaved towards their staff during the lockdown last year and how well they manage their infrastructure and environmental concerns even.

It takes me ages to take a position, but I've managed to build healthy one over the last 12 months. For what it's worth my cap is over 20% ;) (and the healthy margin of safety on this valuation makes me sleep well at night).

C'est la vie (indeed!)

N

Exiting right now is a terrible idea. Fidelity has a lovely compounding base from 17p.

Is someone trying to meet their targets? It would be about the right time of the year for this.

Interesting nevertheless.