Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I've had a look at several years history for SIG and the best year was 2015. Operating profit was £64.4m giving a net profit of £36m based on £2.74bn revenue. That's a lot of turnover for such a small profit and remember this was a 'good' year. Things got a lot worse than this overall in the following years.
Fast forward to the present day. Revenue is currently around £2.2bn (no allowance for inflation) so quite a loss of market share. Operating profit predicted by Jeffries to be £32m. Let's be generous and say they're going to be right. This will give us roughly £16m net profit. Wow! That's brilliant - not.
£16m net profit on a turnover of £2.2bn is just laughable. I can't get my breath as to why anyone would think investing in such a low profit company is a good idea. Even in 2015 a net profit of £36m on a turnover of £2.74 bn is pathetic and that was a 'good' year!
Profits and dividends are what should attract an investor to a share. SIG fails badly on both counts so should be avoided at all costs. It's basic stuff.
Is anybody listening?
I'm back to 'Strong Sell". This company holds no attraction whatsoever for the serious investor. I'm glad I got out when I did.
Revenues are going up mainly because of inflation. 'with the Group continuing to pass through cost increases. ' I have my doubts though that SIG are passing the full cost rises on. Why do I say that I hear you ask? The profit margin in H1 was nothing to write home about. It was a paltry £9m operating profit, on £1.1bn revenues. That is pathetic.
The company gives the impression that the outlook is positive but doesn't provide any figures for us to judge this against. Sounds like bull**** to me or they would have provided figures.
Nothing about the dividend. Not good.
My best estimate is that SIG is looking at £4.8m nett profit on a turnover of £2.2bn. What is the point of that? Why bother? The update says they’re ahead of that, but don't say by how much. Unbelievable. I suspect they're saying nothing because it's not going to be by much.
All in all this still looks like a terrible share. I can't for the life of me understand why anyone would buy or hold it. There are hundreds of better shares out there.
Investors should look at earnings (profit) and dividends. Why invest if neither are forthcoming? There is no point in this business existing if it's going to turn over billions with hardly any profit. It's pointless.
Sorry to be a damp squid but a dose of reality was badly needed after reading all the confirmation bias nonsense since the update. Enjoy the irrational exuberance of the short term bounce and get a stop loss in place as a minimum requirement.
You know it makes sense.
No need for a time machine when you are an expert on economic cycles like what I am.
Here’s what will go down. Construction shares of good companies will treble and more over the next 5 years. From the beginning of 2027 there will be a huge bust and these shares will lose approximately 80% of their value.
Anyone that doesn’t have a stop loss in place will be making a huge mistake. The massive boom in shares will commence from the middle of next year after the preceding dip in the market.
I don’t have any houses available at the moment. I’m such a good landlord they’re always full! My tenants think I’m the best landlord in the world. Modesty prevents me from agreeing with them.
I’m sure a lot of you are wondering how the empire is coming along. I’ve got 2 below market deals going through at the moment. This will generate an instant £60k profit.
As for capital appreciation I’m currently making just over £600 per day as the boom continues. Another 5 years of that will do nicely. And that’s without even mentioning how much of a killing I’m making on the rent alone!
You know what they say. Money to money.
Sorted.
I know most of you haven't taken my advice about a stop loss and must be feeling pretty miserable at the moment. In an effort to cheer you up a bit and to show that I am an objective analyst I have some good news for a change!
SIG is making more cash than it is reporting as profit.
SIG is more profitable than last year.
SIG is increasing its ability to pay short term debts.
SIG is more productive than last year.
What does all this mean I hear you ask? SIG is no longer a prime candidate for liquidation. Things are improving.
Is it time to get back into the market? Not yet in my opinion. However I'll be watching closely and once the supply chain issues are resolved I'll have another look at the company.
In the mean time whatever you do get a stop loss in place!!! Things are going to be very rocky for a while. Don't buy any more shares until there is a clear uptrend.
Sorted.
Don't worry lol! There is a lot of selling at the moment. A lot. People are finally wising up to what a crap share SIG is.
There have obviously been a lot of stop losses put in place at 47p. Finally, people have been taking my advice. The next bloodbath will occur when 46p gets hit. Cue more stop losses triggered and so it will go on.
You were all warned.
I can't say fairer than that.
Not good for a company trying to turn itself around.
https://www.pbctoday.co.uk/news/planning-construction-news/construction-companies-august/98763/