Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
An interesting comment /questionon Reddit, if someone would like to comment there. Posted this on Saturday.
https://www.reddit.com/r/StockMarket/comments/ltmsqf/potential_mutlibagger_catalyst_in_march_2021/
The market is positioniong for the budget and SIG's trading update, whenever it comes.
The UK and the EU governments are all about strengthening their real estate market, new building, retrofitting and greening the economy (insulation). The budget will hopefully include good things for SIG's future revenue.
The trading update will be good, just as it has been for similar companies. Mounting indications that the company is turning around and is facing a very bright future, will be further strengthened.
After all that, SIG will be attracting more and more buyers who are after something extremely undervalued but also safe and with bright future. A multibagger yet very safe and solid. Articles will be written about SIG and re-rates will be stellar.
Hopefully all that will push the SP over 50p, and will make a bid from CD&R and others more expensive. It would be a shame for us if they snapped this up cheaply. SIG is a multibagger for those who have the patience and the vision to stick around.
gla
The market is positioniong for the budget and the SIG's trading update.
The UK and the EU governments are all about strengthening the real estate market, new building, retrofitting and greening the economy (insulation). The budget will hopefully include good things for SIG there.
The trading update will be good, just as it was for similar companies. Mounting indications that the company is turning around and is facing a very bright future, will be further strengthened.
After all that, SIG will be attracting more and more buyers who are after something extremely undervalued but also safe and with bright future. Articles will be written about SIG and re-rates will be stellar.
Hopefully all that will push the SP over 50p, and will make a bid from CD&R and others more expensive. It would be a shame for us if they snap this up cheaply. SIG is a multibagger for those who have the patience and the vision to stick around.
gla
2reincarnated:
We often think of markets as "bubbles". When we think of a bubble the next thing that comes to mind is "burst" or "pop".
But that's not what usually happens. A market doesn't have to go down in a spectacular explosion as many imagine. Markets are far more likely to slowly deflate...
Look at Tesla for example: From almost 1000 dollars they went down to 670 in a matter of a few days (now it rose a little again). People slowly realise that the US, Japanese and Chinese markets are overvalued (slightly or massively, depending on the commentator). So, where will they turn?
I say that some of that money will turn to:
1. Value stocks (as opposed to growth, high tech etc)
2. Undervalued but safe stockmarkets. Particularly in the UK, Brexit is sorted, covid dies fast and we're still 10% less than pre-pandemic.
3. Companies that are related to "greening" the economy.
The overlap of the 3 points above is... SIG plc.
Sooner or later, a lot of money will come here. The only thing that's missing is Profitability. And that's coming in 2021
according to SIG's projections!
https://www.reddit.com/r/StockMarket/comments/ltmsqf/potential_mutlibagger_catalyst_in_march_2021/
I posted this yesterday, to a 1.3 million investor chat on Reddit. It has only got upvotes and no nasty comments. One investor is asking a good question. Anyone care to answer?
gla
Raleigh -- I read the link you shared earlier. It's a document delineating what should be approved by the board, as opposed to a decisions that can by taken solely by Francis. Importantly, the document mentions an agreement between SIG and CD&R. That agreement has not been made public to the best of our knowledge (I suspect that if Raleigh cannot find it then nobody can).
In the RNS it is mentioned that CD&R cannot acquire more than 30% of SIG but I speculate that this reference just refers to Rule 9 and it's been mentioned to re-assure other major stakeholders, particularly IKO. I'm not an expert in Law but I imagine nobody can prohibit CD&R from buying any asset (SIG) they wish. All they need to do is make an offer to investors for their shares.
So, will they do it? Let's just recap some of the facts here.
We know that CD&R see a lot of potential and believe in SIG (otherwise they wouldn't have bought 30% of it).
It would be too expensive to take over SIG a year ago (when they'd need to buy 51% outright). Rule 9 stipulates that they'd need to pay the highest price paid in the last 12 months prior to April 2020 and that would mean over 130p per share.
However, now CD&R already have the 30%. They managed to get that massive percentage at 25p or so. All they need for full control is another 21% of the shares. Retail small fish like us have approximately 28-30% of the shares. So far these are all facts.
My guess is that the vast majority of retail investors, even the historical ones who bought at higher prices, would sell for a price between 45-50p (feel free to disagree here, just a personal opinion).
But if CD&R want full control of SIG, they need to hurry.
The more they wait, the more the macroeconomic environment will be improving, govt initiatives and announcements of investment projects will be kicking in, trading updates will be increasingly positive and ultimately... they'd need to pay a higher price.
So, will they make us an offer soon? I really don't know.
But if they wanted to get full control of SIG from the beginning, CD&R played a very smart game. And now they need to make an offer soon.
gla
Many thanks!
I'll do some reading (much) later today and I'll post here.
good morning!
Raleigh -- do you have the link for the relationship agreement? I'd like to have a look when I get the time.
Or they're just keeping the price low so that CDR can buy cheaper in March...
I don't like conspiracy theories but that could make sense.
Raleigh -- I'm not an expert in Shorting and I don't know the structure of the fees they pay or their time horizons. I've never done it myself and I don't personally know anyone who's involved in professional shorting. I guess we could find out a lot of these by just contacting JPM and asking for a quote...
I am very confident that our trading update will be glorious, like Kingspan's and other similar companies. When that happens, the SP will rocket. Big.
However, as far as RNSs go by, the shares have not been returned to JPM. You need to think what they'll do with their dozens of millions of shares if, by any chance, the results hare are not great...
This is going up. Just hold on here for a few more months. I'm personally not selling one share till I get 100p for them. Or I may hold them for the dividends. 10% yield every year is not bad.
This company is on the up, has a tiny 5m net debt, new leadership, old talent back, CDR experts on board, new patents, 500 branches, 2bn revenue and it's at the heart of the things to come (greening the economy through insulation etc).
gla
Guys, nobody would be happier than me if there was no shorting here.
Just have a look at the RNSs though. JPM shares go up and down through equity swaps every few weeks/months. That's shorting (borrowing for a fee, selling high, buying back low, returning the shares, pocketing the difference). JPM shareholding is by far the most common RNS we get. Shorting is also very common, nothing to surprise us there (but that doesn't make it ethical, it's market manipulation and every few years there are calls to ban this. The EU may ban it in the next few years).
3% here is nearly 40 million shares and that's enough to push this 10-25% down I imagine. Trading volumes are low in SIG.
If someone has a different explanation for JPMs equity swaps, I'm very happy to hear it and I'm always happy to admit I'm wrong if that's the case.
The excellent news here is that what we've been predicting for months now, will soon start happening:
SIG is on the up and the evidence for this is mounting. Soon, revenues and profits will start going up. More and more investors will herd here and SP will start moving up. Fast and then faster.
And something else... If I see any serious shorting here, I'll do again what I did with Reddit (but ten times more effective). It may lead to nothing other than wasting my time. Or... it may attract attention to the share here and we might just have some short squeezing fun. Who knows.
You'd be selling just before top news arrives, in March... And you'd probably be buying something with much less upside potential.
SIG will be double by the end of 2021.
Gla
This man is a legend. And he knows what he's talking about. Please watch this if you have time. I read the headlines from this interview a while ago but only now got to watch it.
He rightly claims that the US market is a bubble at places BUT he makes the case for investing in:
--> value stocks,
--> in stock-markets which are undervalued compared to pre-pandemic levels (UK basically)
--> companies which are involved in greening the economy.
He's basically describing SIG. And he may have invested in SIG as he has ties to the UK and even studied in Sheffield where SIG have their headquarters.
https://www.youtube.com/watch?v=RYfmRTyl56w
CGN -- you're right!
Just to be clear: I'd never think of selling one share. We're so close now.
gla
Mobs, I'm with you. I watch other shares double and sometimes I doubt my decision to invest here.
This share is a recovery story. A value share. It was a company which was badly managed for years and had been underperforming.
I am here because I believe that - for many reasons - this company will return to profitability in 2021 or early 2022 at the latest. When this happens, SHI will double and triple.
SiG needs to prove itself by showing profits to take off though... everything else is mere indications that profits will come.
I now have about 145,000 shares. I only sold once in the last year (to invest elsewhere) many months ago but bought back in just 2p cheaper than I sold.
good luck
And here's a link if what net debt is:
https://www.investopedia.com/terms/n/netdebt.asp#:~:text=Key%20Takeaways-,Net%20debt%20is%20a%20liquidity%20metric%20used%20to%20determine%20how,if%20they%20were%20due%20immediately.&text=Net%20debt%20is%20calculated%20by,term%20and%20long-term%20debt.
All you liabilities in the long and short term minus the cash (including short term assets such as repos etc). The question is: could you pay every liability right now if you wanted to?
Well, SIG nearly can. Their net debt is just 5m. And then they have the long term assets too...
The information offered by Stockopedia below is wrong. In addition the metrics below are shallow (I'll explain later) and, very importantly there's no true insight.
Wrong: For example, the total number of shares in circulation is about 1.18bn, not 618m as mentioned.
Wrong: net debt is not 347m. It's actually only 5m.
Net debt is defined as long term liabilities + short term liabilities - cash and short term assets (which means that long term assets are not measured and SIG has a lot of them as the biggest supplier in UK/Europe).
Also, Shallow information:
The loss in 2019 was indeed 120m BUT if you dig a little deeper you'll see that actually SIG had underlying profits. It was only after the inclusion of accounting tricks such as "impairment" of 80 million that they appeared to be loss making.
However... When SIG revenue starts going ups again (and it will), the impairment will return. So, SIG profits will appear to skyrocket now because 80m will come back.
No insights:
Choosing stocks through Stockopedia metrics is like trying to assess where a car will go Only by looking Backwards. That's a mistake. we should be looking ahead and try to predict things based on emerging info about the future. For example:
Cd&R bought here to fix the company. They Are experts in turnaround cases.
Insulation drives and Green expenditure from governments in the UK and Europe
Francis's plan makes sense to me and seeks to boost margins for SIG
Talented people coming back
Patents for new products
Branches reopening due to demand
Small acquisitions already (and they have loads of money in the bank)
Loads of money in the bank
Tiny net debt
500 branches and the Biggest supplier in insulation in the UK and Europe in times when expenditure in the area will rise.
Quantitative Easing has resulted in property prices appreciation. That means that profits for construction will go up and so new projects by the private sector will mushroom too.
I could write more points here, such as that SiG will easily reduce their refinance costs etc. The main point here is that by looking at the metrics (let alone outdated/shallow) metrics, you can't see where the vehicle is heading too.
Gla
Welcome on board Mick! I'm into real estate too, but I don't plan to purchase anything else for a number of years to come -- I think we've already peaked there in terms of capital appreciation and Theresa May's tax changes have taken much of the profit out of the rent too. I take pride of being stupidly nice to my tenants but as the shortage of houses gets more intense in Britain, even the responsible landlords will be construed as evil too...
As GCN rightly says, most of these stockmarket gurus are a joke. If they were so good, they'd be living in a private island, not writing nonsense at Motley Fool for a few pennies per piece.
I'm mostly here to make some good money, but I will also take some personal satisfaction when SIG takes off. I'll take screenshots of what these experts say "before" and "after". haha
The SP here will really fly when there's actual profit (and then dividend). So far, any rises have been mostly because of speculation for the profit to come. However, there's mounting evidence that SIG is turning around and the company will be at the centre of things to come in construction. The next few trading updates will be positive and will lift the share I believe.
Good luck everyone
Worst case scenario:
1. Someone bought many shares,
2. Will be selling them progressively in the next few days to drive the share down,
3. Buy them back when they decide the share won't fall any more and then,
4. Wait until the share price goes back in the high 30s to sell again.
That way, they sold high and bought back low, pocketing the difference when the price rising back to where it was this afternoon. In a shallow market on can do that!
As I said, this is a worst case scenario though. It may as well have been a legitimate buy.
I try to ignore all this. Sometimes it's dificult because people want to do something, rather than sit on their hands but that's the best strategy. Let the fundamentals speak in time. Let the shorters sweat and stress.
SIG is coming out of the woods. They have the money in the bank, the low debt, the vision, the leadership, the strong backers, the 500 branches, the patents for new products and they even have some of their competitors discredited. This is going to double soon. I wait!
gla
Considering that JPMorgan has not issued an RNS saying that they took their millions of shares back... the shorters are still out there. They had bought recently, ahead of the news on insulation grants and now they're selling again after the good news. Many retail sellers took profit and also are selling precisely because they also expect the price to fall.
I ignore any temptation to sell myself. In just a few weeks we'll have even better news and everyone will start positioning again for the budget and -- more importantly-- the trading update that will come with the final 2020 results. Shorting this in-between good and then better news is a risky business. As this is turning around, it will be attracting more interest and a big fish (or many small ones) may jump in, lifting the share.
It will be a bumpy ride (thanks to shorters) but a ride upwards. Just look at the fundamentals, feel very comfortable with what you see and... wait.