Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
Jim800
My comment was made to indicate that although gas prices are down at the moment it does not follow that DEC has had a bad year.
As you correctly point out profit is a function of price and cost and my comment dealt with the price achieved before costs of production.
I think that todays spot price has a limited impact on future hedging prices as the future hedge price is based on what the predicted gas price will be at some time in the future.
A lot more gas producers would struggle at todays low gas prices and some firms are already stopping production.
Bismark
We dont know the details of the current years hedging policy but my very simplistic take is that if you are hedged at say 2.66 and gas is currently at at 1.66 say , you should be making good profits on your hedging strategy.
This leads on to the conclusion that the more you produce ,the more profits.
The upcoming results will provide the insight into whether the shorters were right as the natural gas price has taken a right hammering lately .
The hope is that this is a short term situation as we all know how volatile gas prices can be .
The best scenario for DEC is that they have hedged out to 2025 and for 2024 have made large profits on their hedging strategy .
My take FWIW is that the share price is so low that most negative issues have been covered and a solid report will see a good upgrade to the share price.
Here,s hoping!
The price drop could be a reaction to large us gas companies cutting production due to a glut of gas and falling prices .
I cant work out if companies cutting production is good or bad for DEC due to its hedging position but these price movements are to be expected with natural gas .
MrG123
I agree with your sentiment and the acid test will be if they can maintain or even increase the dividend.
Onwards and upwards if this is the case as with interest rates forecast to fall this will look like an absolute bargain.
Bismarck
I take your point regarding the Divi v FCF and i know we will have to wait until end of march for full year results to see their hedging , dividend policy and where they see the gas prices going forward .
Fair play to Rusty as he is very clever at trying to give both shareholders a boost and keeping shorters at bay .
I would like to see a dividend declared for the whole financial year 24/25 because at present there seems to be an air of " too good to be true " about the dividend which at current share price is a massive investment opportunity if it can be maintained
To be fair most posters on this board including myself did not imagine such a large yield which is obviously a function of the lowering share price.
From my perspective Rusty could help to boost the share price by BB,s but there are no real guarantees that this would work when sentiment is against you.
I cant see the need to reduce the divi if cash generation is not a problem and going forward there is a very good chance that sentiment will change and the yield would naturally adjust itself to what would look like a sensible one.
Lets hope for a good February!
Axe- Capital Your analysis of short trading is interesting but if you are stating that short sellers are accumulating shares to make future profits then we should all be piling in at every opportunity as the price is bound to recover.
Now we are at the start of the winter season and gas prices could rise quite quickly on a cold weather forecast i would not be shorting natural gas as it is already on a low price .
The same logic could apply to Dec shares as they are looking so cheap and a hike in natural gas price would probably help to get the share price back to where it should be.
Like broker forecasts, these management firms do not always get it right
Doggy I posted on 9th de.c that todays RNS would probably an update and anything else was pure speculation.
Some ignorant poster ridiculed me for that post but the point is Avacta are making good progress but these things obviously take time and when loads of non realistic waffle and hype takes place when the Big One does not arrive the share price drops.
PIKEMAN I agree with your comments but would add that when a proposed US listing on 11th dec was indicated [ but not given as a firm date ] and then it does not happen this is probably also affecting the price negatively.
I am sure that when they have listed they will soon tell us!
Jimbo.J At current price this share is yielding 22%+.
To my non charting simple brain this strongly indicates that either A,- the dividend cannot be maintained going forward or B- the share price is incredibly cheap .
At present i am in camp B
My opinion FWIW is that as soon as us natural gas prices start to come off recent lows this will recover quite quickly .
I know many experienced and knowledgeable posters are pointing to the hedging situation which seems favourable to DEC but sentiment is sentiment and can drive the price down
Lets hope the US listing can be the catalyst for a take off!
What do these brokers get paid for?
We have a top pick at 290 to a sell at 115 !
This must mean that either brokers have not got a clue or there is some serious ramping/ de ramping going on .
Surely its about time the FSA got involved and stopped all this broker nonsense!
Is a US listing definitely going ahead on Monday?
On the latest Rns the company said that the result of the listing would be effective later in December and the listing info was previously given as on or about the 11th of December .
This does not come over as an exact date but i stand to be corrected