Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
These idiots are just averaging down.
Another batch bought at 354.
$c41/lb U price implied here - 16% discount to spot.
What a gift!
POSITIVE news this am.
South African MPs yesterday voted DOWN move to begin impeachment proceedings against President Cyril Ramaphosa. This significantly reduces uncertainty that hit the shares of late.
Impeachment required 2/3 majority in Parliament to vote in favour of impeachment - while only 40% ended up voting so - meaning it came well short of the needed votes.
As per BBC, Now that hr has survived the vote, he is thought likely to win re-election at his party's conference, which starts on Friday. He will then be in pole position to become the ANC's presidential candidate at the next election in 2024.
Continuing to load up today.
15% discount to NAV on an overbought GBP…
This is such a no brainer.
The way to think of valuation multiples for this company, is every day that passes with coal prices remaining so high, everyday does the valuation multiple need to indeed expand , simply because you get one step closer to closing the gap between cash and the market cap.
People calling the prospect of peace in Ukraine as a big risk to coal prices, and so to Thungela.
For Thungela, the risk in my view, is much smaller than people think…
Say there is a peace resolution in 6months time. At 195/t acheived price til then, expect cash pile to close in 6m time at >USD1.4bn (pre divi).
At that point, say the coal price collapses to $80/t as peace is announced.
Since the company would have by then grown so much more of a cash pile, the marginal impact on the share price will diminish markedly from lower coal price.
You can look at my Freecashflow calcs of other thread.
If you say a 20% yield is fair valuation at 80/t; then what you get given the substantially larger cash pile, is the risk to downside from here is ONLY LIMITED to 15-20% so to 1100-1150p at $80/t coal. And again this assumes the company does nothing with the cash pile in terms of M&A/ new activity and surprise…
The further away a resolution is from that point, the lesser the impact obviously.
As such, I think your argument of peace resolution as being a killer to the stock is indeed misguided.
Another way to put it.
Say there is a peace resolution in 6months time. At 195/t acheived price til then, expect cash pile to close in 6m time at >USD1.4bn (pre divi).
At that point, say the coal price collapses to $80/t as peace is announced.
Since the company would have by then grown so much more of a cash pile, the marginal impact on the share price will diminish markedly from lower coal price.
You can look at my Freecashflow calcs of other thread.
If you say a 20% yield is fair valuation at 80/t; then what you get given the substantially larger cash pile, is the risk to downside from here is ONLY LIMITED to 15-20% so to 1100-1150p at $80/t coal. And again this assumes the company does nothing with the cash pile in terms of M&A/ new activity and surprise…
The further away a resolution is from that point, the lesser the impact obviously.
As such, I think your argument of peace resolution as being a killer to the stock is misguided.
With a company having and generating so much cash, it’s a race against a peace resolution…
As I said several times, by end next year or thereabouts this company’s full market cap will be backed by cash.
Technically, having so much cash changes dramatically the possibilities open to a company. It can venture to new areas, it can radically change its core field. This via M&A notably.
In the meantime, the company is generating >USD2m/day of cash.
Please stop baking you PE calculations on market cap including cash.
It should be market cap EX CASH. Since the mountain of cash is penalising your PE multiple, which makes no sense.
Ex cash PE is around 1!