Member Info for Quiggers52

Yeah, apparantly Guvvi, you have "Na-zi" tendencies lol. Not cool really, bringing in the Third Reich.
I seem to recall Stoodio imploring someone to "chill the fk out" a while back. Echo chamber needed
Who is next in the firing line?! Been moi, y Bangak, et Chat und you. We are all a bunch of "see you next Tuesdays" obviously.
ha

I`d say both. I take last 5 years revenue and average and use this as the base. The growth rate in net income I calculate based on a reinvestment rate. (To that could be added macro/economic factors that are mentioned below (Rh deficit etc.)
Growth Rate in net income from non-cash assets current year [USD]
Net Income $m (current year): [E]
Book Value of equity (prior year) (G)
Cash Balance (end of prior year) (H)
Income from Cash Balance: (F)
Capex: (A)
Depreciation: (B)
Increase in working cap: (C)
Total debt: (D)
Equity Reinvestment: A - B + C - D = [Y]
Non-cash net income: (E) - (F) = [B]
Non-cash book equity: (G) - (H) = [R]
Reinvestment Rate: [Y]/[B] = [G]
Non-cash ROE (B/R) = [P]
Expected growth rate: [G] * [P]
I compare over years to get some idea of what is going on etc. The cash flows are discounted back at cost of equity/capital (here, no cost of debt). This is a matter of taste based on one`s risk appetite. There is no right answer provided that the cash flows being discounted are cash flows to equity and not to the firm. The terminal value I use is basically inflation only something like 2%. Conservative.
So for SLP the discount rate = the cost of capital = the cost of equity = risk free rate + beta * equity risk premium. The risk free rate is easy enough - a 10-yr USD T Bill. The beta again not difficult. This is pretty volatile so above 1, about 1.25. And the ERP is what margin you demand really (the S&P 500 has returned about 10% av last 50 years as comparator)
Bangrak probably uses a similar discount rate to me and his growth assumptions must be similar too.

Chat - I used a Moody`s Ba2 rating (Brazil equivalent) and is already built into the discount rate/cost of capital
Of course, that was before the current unrest.
One can always increase to say 15% to 20% in which case the intrinsic value will be lower, around the 1.40 mark as I see it

Agri - yes, that would be the £2+ valuation using this year`s numbers as base and projecting 15% growth over the next 4 years which I`m wary of because this years numbers are not sustainable, they were a windfall - Rh ATH - acknowledged as much by SLP themselves, which is why I used normalised rev and assumed conservative growth built on that taking into account the supply and demand bull case.

I arrive at DCF equity valuation of £1.76 on the following assumptions:
Base year rev normalised to $132m. with 25% growth then 15% (x 4) then 12.40%, 9.80%, 7.20% , 4.60% , 2.00%.
Cost of capital/discount rate: 12.8% (x 5 yrs) then 11.57%, 10.36% , 9.15% , 7.93% , 6.72% , 6.72%
Cash of $96m.
The £2 comes from the mistake of not normalising the base rev and assuming the current (est.) $210m will grow at 5% and then 10% 8.40%, 6.80%,5.20% 3.60%, 2.00%.
Of course this could happen, but the more conservative approach would be to ignore current windfall revenues and take a 5 year average, using that as the base, and then building in a growth rate which is sensible.

There has always been country risk. SLP`s internal discount rate varies around 12%. There are those on here that push that up nearer to 20%. Now we can see why. The higher the discount rate the lower the net present value of the cash flows (the lower the valuation of the stock). S&P 500 index last 50 year average return is about 10%. I think 15% is fair.
I`m confident the release of the Q4 in 2 weeks will provide a base for a rally. To where, who knows in the short term.
GLA

No, I think it can change overnight, of course it can - if the future expected cash flows that we discount back have no basis in fact.
And that causes panic selling. Besides frauds - Enron, Worldcom, Wirecard (etc.) this can happen with growth companies too. FSLY is a recent example.
But I`m saying that is NOT the case here. SLP is (as far as we know) steady as always. With - in a couple of weeks - earnings that will be mouth-watering (hopefully). SLP IV remains in tact. PGMs holding. Rh, steady and (compared to normalised) still massive for us.

Intrinsic value can change overnight. But not the case here. SLP still a 200+p stock and it doesn`t need Rh to be at these current levels either. $10k is a great price. $15k the land of milk and honey. What are now at, hovering around the $17k mark?
The short-term panic is text book value investing 101. If IV holds, you buy more. It`s not difficult. This drop isn`t tied to Rh falling from 30k - that wasn't sustainable; it was a spike. The 200p valuation doesn`t need anywhere near those highs.
It isn`t nice seeing a fall. As Peter Lynch wrote about, you don`t need to be strong in maths, you need a strong stomach. Buy and hold isn`t for the weak.
GLA

Cash adjusted P/E is 2.9 based upon net earnings of $108m for 20/21 and est. net cash balance of $83m which is being conservative. assumes 272,473,865 shares outstanding.

Another 3,948 in the bag. A couple of weeks and earnings reported should be 30m -40m USD .
Holding now 40,000.
GLA

Yeah it hurts, I`m 18k down in only 6 weeks. It is fk incessant all over, not just here. Patience is key. Sentiment is rock bottom everything is selling off it seems. There are nuggets, ITM recently, but those opportunities are few and far between.

Rhodium
Exchange traded fund.
The idea is SLP exposure is about 60% of their revenue. Something like that.

fk it. I`m all in. Bought the dip. Now 40% of portfolio up from 30%.
When u believe... you believe.
200p is there.
Nothing has changed.
This is a blip with a fool and his "men" causing trouble.
SLP still doing what SLP does best. In 6 months we will see
GLA
S

on or behalf 30 July.
S

https://www.tradingview.com/x/nSvRMJa5/

https://www.tradingview.com/x/nSvRMJa5/Hoping that channel continues upwards and the break through support is just a blip. F-K typical. Sold ENW to improve position here (I was already in). They are up, this is down. Was 4% up this morning, now 6% off. Couldn't make it up.

https://www.tradingview.com/x/9OA9wU6o/
If you look at the big red thing at the bottom of the chart, that isn`t buys - its red (this morning at 0800) not surprising really as SYS turned in a loss of 234k. How is that a nice set of results? I`m not being funny I'm saying a loss isn`t nice.
Really do not get how a loss like this merits a 4.4% gain for the day. I just looked at CSH who turned in 37.7m of earning today, s a 59% increase on expected earnings and their PE drops from 28 yesterday to 18 today. It`s mad!

Yesterday, PE was 28. 24 SP was 107. 6 Making EPS 0.038214. On Shares Outstanding of 622.10m gives est. future earnings of 23.7m.
This morning`s results come in and earnings are 37.7m up 59% on 2019 . SP is now 110 and EPS is 6.06p that makes PE now only 18.15.
The earnings are up 59% but the PE is down from 28.2 to 18.15?
Huh....?

At the moment a V-shaped recovery from the 159 low which started after the Q1 results were digested. Q2 (out end July) numbers will no doubt be down more so but the market knows that already. Still, looks here like speculators are moving in -similar with CCL and before that JDW both predictable, volatile stocks where a pretty reliable 3, 4 or even 5% return could be made day-to-day.
My feeling is we won`t see that low again except if there is a 2nd lockdown which possibility has surely to be remote would people stomach it? I`m not so sure.
IAG is one of those where the easiest approach is buy and forget and return in a year or two.
What the return will be who knows - as Buffett said "the world changed for airlines". His selling out was a shock for me given his long term approach. He obviously though the returns were not gonna be there for him.

He says he opened his short at 0938 (sp = 184.10). SP closes at 187.60 that`s a 1.9% loss to you and me but that's not how CFDs work as they are leveraged products so whilst gains are magnified (in percentage terms) so too are losses.
A very risky thing to do at the best of times but on this morning`s chart??
(And each night open = more costs. )
Personally, I think its ball hooks. No offense.
A second drop worries me here. A similar uptrend quickly dissipated end of April down from 2.50. Could happen again as the fundamentals haven't really changed. Sentiment can quickly evaporate!