Member Info for marineclark

Two weeks ago, we bounced off a low of 11,250 Rho price., followed by a two week rally. As nothing moves in a straight line, we had a slight pullback yesterday, but knowing that Microchip shorages may have peaked last month gives me confidence that the rally will resume, and that the low was actually a bottom. Even at these prices, SLP is massively proftiable.
This share is one of my most comfortable holdings. I got in at 86p, a point away from the a second bounce off support at 85p, giving me a risk of 1p, for a 100p reward. i.e 1:100 risk/reward ratio. SLP is does not have volatile intraday movements, its more of a slow and steady ship. Thats why this share is not a good one to day trade for small profits. In fact taking small profits is a losing strategy in the long run. yes, you may get lucky from time to time, but sooner or later, Taking small losses, and letting your profits run, is the best strategy that works in the long run. As well, picking good shares with lots of cash in the bank, and strong earnigs, and zero debt, makes this a low risk share. Charts are important for timing however, as you dont want to be buying at the top. At 150p, may here were multibagging from 10p, and profit taking is perfectly normal.
I see 150p+ in 3-6 months.
All imo, and DYOR.

A double bottom pattern is complete when the price rallies above a the bounce high, which is around the 105p level in this case. HIgh volumes arent mandatory but do increase the probability of a valid formation. Yes there was a slight pullback today from the downward trend line, more likely to do with the pullback in RHo prices today. I would only worry if swings downward are accompanied by large volumes which they are not. I have closing support at 85p, if that breaks than further moves down is possible, but I would worry about that situation if it develops. So far support looks strong at those levels, given the formation of a double bottom at those levels. Shakeouts sometimes happen, doesnt mean it will. There is also fundmanetal case to consider here as with rising cash in the bank, increasing by $20million per quarter, that will buffer any further downside to the price. Normally, the best time to buy is when the price are above the rising Moving averages, but in this case, given the fundamentals here I think we've hit the bottom in prices. I wish you luck on you 76p order, my money is that you wont get it.
However, as mentioned SLP share price mirrors closely the price of RHo., the charts practically are the same and so are the timings. A rise in RHO will see a mirrored rise in SLP. And we all know that the Microchip shortage wont last forver.

Also, cash in bank in Jun 2021 was $106million, 3 months later in September that would have increased to $126million. BY March 2022, cash in bank would have increased to $166 million(not discounting divdend payments). By then, the goose that lays many golden eggs would only be valued at the price of only 1.5 times the valuation of single golden egg($20 million per quarter) , which is absurd.

Chart wise, the double bottom formation has ended the lower lows of a falling down trend. We are within touching distance of a upper channel down trend. Given the increasing fundamentals here, we shoud be breaking through that resistance any day now. Don't worry about small profits, take profits at 100 percent or higher, in 3 to six months.

Todays Rho price was the same as approx this time last year giving revenues of $42 million per quarter, or $20 million net income per quarter. If todays RHo price stays the same, that is the expected quartely income, $80 million annual profit. However, assuming chip shortage peaked in september 2021, than Rho prices should be going up from next month, as it has already. In that case, $80 million per year net income would be the minimum figure, or the projected $120 million per year if RHO prices rise as is expected.

So even at current prices, SLP is hugely profitable.

from IC article dated 6 sept 2021,

"However, Liberum Capital’s technology team believe that the chip shortage will peak this month and then ease for the rest of the year, a positive for Sylvania’s average basket price which has been dragged down by a third since May. Importantly, markets for both palladium and rhodium are still forecast to be in deficit this year. Furthermore, the group remains hugely profitably at current spot metal prices as Sylvania’s average basket price is more than four times higher than group cash costs of $755 per oz. Based on flat production of 70,000 PGM ounces, cash profits north of US$120m (£87m) should be easily achievable in the new financial year."

I learnt from past mistakes and now always carry a little extra cash just in case:) Carpe diem!

We finished strongly today and within touching distance of penetrating the falling line of resistance. With a decent thrust the tight resistance should fall and we should be well out of the bottoms, and ready to enter a new phase of price action.

Oh dear, luckily i sold when I saw support breaking, and with a small loss. I thought this would bounce back quickly but it hasnt. This is a falling knife, I would wait to see some semblance of support before I would even think about buying back in.

Stoodio, I will be enjoying the fruits of my labour(putting my feet up) in three-six months just like all holders here who bought at these prices. The great thing about this share is that it mirrors the prices of PGM, which is easily checked, so it is easy to work out future earnings as the ounces sold is fixed at 70,000 ounces annually. Chart wise, still some a bit more work to do to break out of the down trend, but given a enterprise valuation of peanuts, i.e 2 times net profit, and in six months 1.6 times net profit if prices stays the same, I can confidently call this the bottom. I'll will be treating myself to a massage in six months, when the price doubles from here.

Fishy, I think there is still a deficit of Rhodium of about 100,000 ounces in the supply chain, so as the microchip shortage eases from October- Liberium believes it peaked this month, the price of Rho should rise again, which it has been doing, bouncing off a bottom of $11,250. I dont know what the lag is between Rho prices and SLP share price, but as the Rho price continues it upward and sustained move, SLP's share price will no doubt be returning to the 100p+ range. After all, £80+ million in the bank projected for next year is serious dough. I think the lag has to do the the sale pricing of RHO, as I think it is calculated on a rolling month or quartely basis, not the spot price on the day it was sold, although thats my guess, so the rolling month/quartely price will show price lag because of how its calculated.

Rhodium up 7.45%. Wont be long folks.

https://www.investec.com/en_gb/welcome-to-investec/press/hydrogens-rise-materially-increases-pgm-relevance.html

"......As vehicle manufacturers transition en masse away from this legacy propulsion technology, it may seem like the mining sector is about to lose one of the most powerful demand drivers for PGMs. “Fortunately, the unique chemical properties of the PGMs will likely ensure that these metals can play a crucial role in the world's emerging energy transition,” affirms Mathonsi.

According to the International Renewable Energy Agency (IRENA), this transition will transform the global energy sector from fossil fuels to zero-carbon energy by the second half of this century and hydrogen will play a central role within the world's new energy mix. Mathonsi explains that the world has experienced a new wave of interest in the hydrogen economy as its potential applications continued to grow. “Hydrogen is an extremely abundant element, and we can produce it with a marginal carbon footprint, if harnessed properly.”

According to the Hydrogen Council, 18 countries already have roadmaps or strategy documents setting out their intentions to use hydrogen as a source of alternative energy in the future.

“While PGM-based catalysts are expected to benefit from the fuel cell electric vehicle technology within the hydrogen economy, their application extend way beyond just powering a new generation of vehicles,” elaborates Mathonsi.

And platinum will assume a particularly important role in the production of hydrogen as a clean energy source. It is the catalyst material used in the proton exchange membrane (PEM) electrolysis process to produce green hydrogen if the electricity input is harnessed from green renewable energy sources. ......."

https://www.toyota.co.uk/new-cars/new-mirai/

https://www.reuters.com/technology/german-auto-giants-place-their-bets-hydrogen-cars-2021-09-22/

"....But he added: "It's not out of bounds to think if the (German) Greens come into power they could accelerate the push to adopt regulations favouring hydrogen fuel-cell cars."

BMW's Guldner acknowledged hydrogen technology was too expensive to be viable for the consumer market today, but said costs would come down as trucking companies invested in the technology to bring fuel-cell vehicles to market at scale.

To demonstrate BMW's hydrogen X5 prototype, Guldner took Reuters for a spin at 180 km (112 miles) per hour on the autobahn near the carmaker's Munich headquarters and in a few minutes gave it enough fuel to run 500 km using a hydrogen gas pump at a Total petrol station.

Guldner said BMW saw hydrogen fuel-cell cars as "complementary" to its future battery electric model range, providing an alternative for customers who cannot charge at home, want to travel far and refuel swiftly. The motor in the hydrogen X5 is the same as BMW's all-electric iX.

"When the future is zero emissions, we believe having two answers is better than one," he added."

Is hydrogen gas cleanest fuel?
When hydrogen burns in air, it produces nothing but water vapor. It is therefore the cleanest possible, totally nonpolluting fuel.

https://www.globenewswire.com/news-release/2020/07/17/2063957/0/en/Hydrogen-Generation-Market-to-Reach-USD-208-86-Billion-by-2027-Rising-Demand-for-Fuel-cell-Based-Vehicles-to-Spur-Growth-Fortune-Business-Insights.html

https://www.reuters.com/technology/german-auto-giants-place-their-bets-hydrogen-cars-2021-09-22/

PGMS are used in hydrogen fuel cells which are the future. Billions are pouring in to this tech, which is costly right now, but will fall over time.
Don't forget PGMS are used in hybrids.

Platinum up 4.33%
Palladium up 6.87%
Rhodium up 1.19%

I hope no one was waiting for 70p :)

https://www.thehindubusinessline.com/markets/commodities/3-reasons-why-rhodium-prices-have-zoomed-over-70-since-january-1/article34018038.ece

A good read to understand the price rise in Rhodium last year and why prices will rise again.

"Heraeus Precious Metals says rhodium prices are likely to fluctuate at high levels and volatility will be the norm. “The market deficit for rhodium should widen further this year. Demand from the automotive industry, by far the largest customer, is likely to remain high in view of stricter emission regulations,” the German firm said."

...end of first quarter 2022.

Stoodio, I won't be falling on the sword like yourself, but 150-200p by first quarter 2022, is my price prediction here. I mean not sure if I would even call it a prediction. With cash balance sitting at £144 million first quarter next year(not discounting divendend payments), if price stays as it is cash balance would amost three quarters of current market cap. Clearly bonkers. But market is currently pricing a total PGM price collapse. When it doesnt this should rocket.

The market is currently pricing in a PGM price collapse. Now sure if that happens current price is fair. But when the PGM recovers...... I'm fully loaded here. I'm not one to preach how other should spend their cash. But assuming I'm right, this would make it multibagger number 6 in the last 12 months.

Bangrak, in

June 2020 quarter :
Revenue = 28.03m
Net income = 8.54m
Cash in hand = 55.88m

Jun 2021: quarter
Revenue = 60.45m
Net income= 29.64M(£22 million)
Cash in hand=106.41M

You can clearly see the difference no?

Now we are in September, that is another 29.64m in the bank. so cash in hand is now =$136.05million(£100 million)

Now market cap of SLP now = £238M.
So. strip away net cash= 138 million. Assuming current spot prices annual net income = 22*4= £88 million. Now imagine if spot prices go back up to previous highs and why not as microchip shortages is peaking this month, net income could even double to £180 million.

But assuming net income of £88 million, and removing net cash, we are cuurently rated on enterpise valuation of only 1.6 timese net profit. This is hilarious as other Aim shares producers are rated at 6 -16 times net profit.

You can see why 87p is a joke price, and the there is material upside from this price.