Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
We're nearly half way there. And that's only half way to 200p.
Congrats everyone
What an interesting discussion we have here! Apologies for my silence, I've been typing furiously elsewhere.
To start with, Mick has been claiming that we'll have a major correction in May 2021 for months now. I think his comments are genuine and based on his research. As such, thank you Mick for this contribution.
There is also some truth in what Mick says. The markets have been running on the steroids of Extreme monetary and fiscal stimuli. At some point, these extreme measures will have to pause or even reverse. The government cannot be printing money (Quantitative Easing -- asset buying which creates money, to some extent) or paying for every worker's salary etc forever. When these measures pause/reverse, I expect the start of a mild fall, yes.
In addition, there has also been a crowd of new investors entering the stock market -- these people could turn to be panicky, aggravating any fall (but I'm not entirely sure about this -- some say that the new investors have a gargantuan appetite for risk. We'll see about that).
We also have the danger of inflation (where is that bloody thing? I've been waiting for it since 2014) which will make government bonds way more appealing and will thus deprive the stock markets from funds, leading to a fall.
And we have a number of other risks. New nasty variants for one, protectionism, policy mistakes, wars etc. Between these, I'd single out the danger of a string of major bankruptcies against a context of a weakened economy.
However... even though history kinda repeats itself, it doesn't do that in a precise fashion. In fact, every crisis we've had in the last 100 years was partly unique. The mechanisms/causes in 1928 were different to those in the 70s and were all different to 2008 or 2021.
Nobody can predict the timing of a crisis. Partly because we can't predict human reaction and policy makers' reactions.
If I were to brave a prediction on such an unpredictable thing, I'd say that: a) the mother of all recessions could well hit us sooner than 2026. Much sooner.
b) these will be a much smaller correction in the stock markets at some point. I personally expect this to happen close to the end of the summer (for various reasons)
c) SIG will be affected by the correction but much less than other shares. This is a recovery, value share.
GLA
A dividend would be a mistake in my view. I hope the new board understands that the important think long-term is to re-invest in branches, people, patents, offer competitive prices to capture market share and generally turn this business around. Any funds are better spent that way...
I agree that the mother of all crises is looming. Loads of debt for both businesses and governments, economies with loads of social problems, wealth/production going East, monetary policies brought to their absolute (zero bound) limits and more. I don't think anyone can predict a crisis accurately (in terms of timing, depth). Much smarter academic economists than myself have tried and (repeatedly) failed.
The thing is: If you expect a correction in May, you sell from April. And others will sell in late March before the April smarties sell first and so on. The same applies in other economic decisions too (such as investments, hiring etc).
This share is doing great. We are the lucky ones who bought low. This company has the lion's share in insulation in the UK and the EU. Billions will pour here from govts and households. As the company gets itself sorted and improved, big profits will come. And of course investors will be pressing the buy button before the profits actually materialise - while the share is still cheap.
Wait a few years and this is going to 100p, 200p and way more. The market cap is ridiculously low. In the meantime, this company is very safe to park your money and wait.
gla
https://www.fool.co.uk/investing/2021/03/27/at-near-1-year-highs-are-these-2-uk-shares-bargain-buys-for-me/
The usual shallow nonsense but the important thing is that SiG starts getting positive publicity.
The character in this video went through a lot but he finally bagged a multibagger. The score is by the immortal composer Ennio Morricone.
https://www.youtube.com/watch?v=ubVc2MQwMkg
Just wait everyone and SIG will rise. Slowly, with 2 steps forward and one step back, but rise it will.
It is almost inevitable and just a matter of time (unless SIG blunder big).
Actually, I was unfair. My top student this year is Chinese and I don't think he outsources anything. Last year, another top student was Chinese too.
These days, an important skill of our university students is to learn how to evade TurnitIN... My Chinese students (some of them seriously loaded) don't bother evading anything though, they just outsource their essays to professional writers. These professional writers are experts in evading TurnitIN.
All this is paying for uni salaries, research and an associated supply industry. Higher education is one of the biggest sectors of this country. One of the few sectors that -more or less- work well I might add.
No worries my GCN -- I appreciate your referencing ethics here.
Very good points Carl and Raleigh.
Apologies, I did not explain myself adequately before. Of course SIG will follow the part of the domestic economy around construction. It's just that construction is also considered by investors as a cyclical sector in an economy (barring any targeted fiscal policy by the government). The good news here is that construction (and the wider economy) is only forecast to rise for the next couple of years. Pandemics and brexit are behind us -- they took their toll and now the UK/EU will be rising.
Also, of course the watershed moment is when the market gets convinced about SIG's long term profitability. I've been shouting that for months now. More and more analysts and gurus come to the conclusion that SIG is changing. The latest trading update confirmed progress and brought us closer to where we want to be.
However, the market will change its mind slowly, incrementally, I think. Hence, this will be rising in accordance to FTSE 250/construction shares but FASTER.
https://simplywall.st/stocks/gb/capital-goods/lse-shi/sig-shares/news/sig-plc-lonshi-analysts-are-pretty-bullish-on-the-stock-afte
My previous post was more a reference to any generalised market shocks... If that happens, SIG will be affected too. I'm a little worried about the macroeconomics of the global economy... I suspect that under the bonnet, many companies have a lot of debt/problems and are just inflated. Plus these SPACS in the US or companies without revenue in the UK and elsewhere.
We're also aproaching a stage when the governments will not rush in to provide more QE or bail out anyone. Governments mostly look at unemployment, inflation, trade balance and bank health. Stock market valuations are very secondary to these.
best of luck everyone
I think SIG will be broadly following the dips and highs of the UK markets and particularly the domestic focused FTSE 250.
However, SiG will be falling less and rising more each time, progressively rising highly and higher. For the patient ones, eventually Shi will climb to a pound, or much higher than that. But this will take years and I think most people on here like to buy and sell daily/weekly.
No fireworks today but solid progress. The most important lines for me:
2021 is progressing like the last quarter of 2020 (which saw a rise in sales compared to last quarter of 2019).
Net debt somehow reduced further, from 5m to 4m. I was slightly worried about that, with SIG acquiring smaller businesses.
Profitability expected in H2 2021. Very soon.
Margins will increase naturally as sales grow and rebates increase through the year.
This is an established company, indeed a leader in their field, with spectacularly low debt for 2bn revenue. They took a bit from years of mismanagement +covid but now they're on their way back. This update confirms these. Not sure about the SP today but Patience will be rewarded handsomely here.
Hopefully it will rocket after the results. Numbers should be much better than previously predicted.
Exciting, turnaround times for this share!
This is falling hard a couple of days before the results. It's been a mildly bad day for stocks mostly everywhere but not that much...
Hope this is just market jitters and no insider info going on around here...
On a personal level, I'm happy for you guys. You're both seasoned investors and you understand that a danger when you sell at 44 or 43p is that next day or next week it could jump to 45p and then continue upwards. You'll always be waiting for it to go back to 43 to get back in again. This happened to a friend of mine recently actually, with another share.
When the share is so undervalued, like SIG, and what held it back begins to dissipate, the best strategy for me is to stay put and wait.
I do hope that the trading update will be good.
I think the share is just waiting for the news on the 25th... People sell or buy here to take advantage of opportunities/results elsewhere. Nothing major though.
The real movement will come in 6 days from now... we'll either jump to 50s or to sink back to mid/low 30s I think.
It would be great if we had a SIG insider here to give us opinion?
This rose nearly 50% over the last month. The important thing for now is to get established in the 40s.
If the results are good in a few days from now, it will certainly hit 50s.
If the results are not good (compared to rational expectations) this may well fall back into the 30s.
...before it rises to 50s in the next trading update in June or whenever it comes.
Good luck to my die-hard longs here
*Please excuse my countless typos and occassionally awkward language. I type fast, in between breaks.
gla
Evidently -- just offering some friendly advice to the people I've been travelling together for a year now.
I agree that this board cannot really have much of an impact on the share price.
However... posts like this possibly can change things:
https://www.reddit.com/r/StockMarket/comments/ltmsqf/potential_mutlibagger_catalyst_in_march_2021/
I've post in communities numbering over 3m investors. Subsequently, I've got many private messages like this over there:
Hey man - just wanted to say I bought a sizeable (for me) amount of SIG PLC Stock 1 month ago when you posted "Strong fundamentals for a turnaround case" (got in at 29p). I went off and checked your assumptions and it looked right to me. Just wanted to thanks, it's obviously been doing nothing but performing since then haha. Cheers from Australia :)
Also, I suspect there's a little misunderstanding on institutions investors in SIG:
Instittutionals own at least 70% of the shares. They don't seel or buy easily. They usually have very long time-horizons (As Buffett said: "my ideal time-horizon is forever"). They usually aim after the dividends, not capital gains.
That leaves us private investors owning less 30%. However, many retain investors like myself and a couple of my friends who bought SiG we don't sell easily. We may hold for years.
That leaves a relatively small amount of shares circulating daily, weekly or monthly in SIG. So... if a few thousand investors join us here, there will certainly be price fluctuation.
And something else... JPM is lending shares out for shorting SIG (please read some of my previous posts about this if you have time). These shares have not been returned to JPM as far as I know. And they are many millions of shares. My best guess is that the people who handle this weapon are probably keeping an eye on this board, to gauge sentiment at the very least.
good luck to all my friends in here and all those who are long
The UK economy fell by nearly 3% but... Construction actually rose! They are busy indeed.
gla
*There will be good weeks and there will be bad weeks.
gla