Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
So endeth the bear case.
the bull case:
PGMs in decline when Rh is at 12,100 p/oz? Forget 2021, everybody understands that was a one-off. Over historical 10 year the current Rh spot is hardly in decline when the asset comprising 50% of their basket is worth 6 x more than gold.
The normalised (six years) ROIC for this SA "miner" - wrong description really, they do not mine - is 18% which is comparable to Unilever. (Amazon is just under 10%. JLP is 8.5%. Rio Tinto (five years) is 21%)
They have not gone under their 200 day -:
https://www.tradingview.com/x/jUR7fvkD/
Speculators come and they go. Long term investors do not really care much about these swings and simply take advantage.
The movement in the direction of finally recognising their assets other than the SDO is exciting. It could be game changing and leads me to the inevitable conclusion that should those deposits realize the potential talked about they could be a target. But we will see.
LOL!
Kinda guys who would shell out $10,000 on an "investment" opportunity yielding a 5% return ($500) every year in perpetuity (for ever).
What is that in present value terms?
At a discount rate of somewhere between risk free (3.5%) and S&P 500 average 50 yr return (10%) Let`s go with 8%. Sounds reasonable. Wow, what`s not to like?!
Plenty...
Unlike this wonderful oppo. Just wait for the interest when this lands.
My query to mesen is do I sell when it does...
Been said before. But now that SLP seem to have woken up to the reality that the future growth lies in their assets, is there an acquisition- risk do you reckon?
What price would you comfortable giving approval ?
Not sure I`d be happy with anything less than £2 which admittedly would not be likely.
Luna will be HP; another opportunity to buy the dip.
Gotta go back to Aug 2021 for something like this.
Rumour probably. JLP sold off heavily too on inter alia news of a fatality. Sentiment is fear.
Seize the oppo!
BRK.A latest 13F filing: https://www.sec.gov/Archives/edgar/data/1067983/000095012323002585/xslForm13F_X02/20651.xml
to all of the Old Skool value investor Ben Graham acolytes out there.
Look at the holdings and ask yourself what ratios (if any) define the fabled Economic Moat?
Easier said than done!
As an aside all 13fs for all assets under management of $100m or over need to be filed not later than 45 days post quarter.
So that means (usually) the following dates: 15/05/202[2], 14/08/202[2], 14/11/202[2], 14/02/202[3]
Interesting to see what Berkshire are buying/holding.
A drop of 10% to just above its 200 day MA just over 89p would be a collapse. Christ, I cannot see that happening. If the spot price of Rh halved overnight, fair enough but is not likely to happen. Rh is stable atm.
(I`d forget about the SP and remind yourself that SLP Q1 and Q2 net earnings are 15% up YoY.)
Falls through its 50 day MA for the first time (yesterday and confirmed to day) since end Sep/start Oct. `22. But Rh spot increased last week. Not by much.
But it is not dropping, that is the point.
Uncertain future...License a year to run. What is the % it is not renewed...any views?
I like boring.
I won`t like it if those CPs are not fulfilled.
Paul McD must be sweating now...the clock is ticking. He did this to salve his reputation and make a few bob along the way. It is all or nothing on this one
But I have no doubts....and to those who kept the faith ye will be richly rewarded....aye, even that Scots pish-head Donmac, bless him. No offence intended.
Tweedy Brown bought in at $35.14.
With these low multiples, that makes sense as a Value Investor.
£14.73 on LSE
£26.69 on NYSE (ADR)*
* in USD at exchange rate $35.89
https://www.marketwatch.com/investing/stock/gsk/charts?mod=mw_quote_advanced
That is quite a wide discrepancy.
His piece was not discussing South Africa or SLP at all. So no.
Of course the risk free rate is used in a DCF valuation which is what he was discussing otherwise he had no need to be talking about a discount rate. But it is only 1 part of the CAPM which is used to calculate the cost of equity. The other parts are the ERP and the beta.
Some value investors poo-poo CAPM but to simply offer up a 10 year bond rate as a proxy is laughable.
It is still widely used as the standard simply because there is nothing else comparable. It is the best we have. This despite the fact that it has been labelled as probably invalid in practice by Fama and French:
" The CAPM, like Markowitz’s (1952, 1959) portfolio model on which it is built, is nevertheless a theoretical tour de force. We continue to teach the CAPM as an introduction to the fundamental concepts of portfolio theory and asset pricing, to
be built on by more complicated models like Merton’s (1973) ICAPM. But we also warn students that despite its seductive simplicity, the CAPM’s empirical problems PROBABLY INVALIDATE its use in applications"
http://www-personal.umich.edu/~kathrynd/JEP.FamaandFrench.pdf
[My emphasis]
I`d be very wary of Simon Thompson`s stated returns. In his article Bargain Shares 2023 under Arix he states that tech companies are valued using the 10 year risk free rate: [!!]
"An equal-weighted index of US biotechnology stocks declined 21.5 per cent last year, the reversal coinciding with the steep rise in 10-year US Treasury yields, the preferred discount rate used for valuations."
That is just simply wrong. There is this thing called the "Equity Risk Premium". Think about it. You can put your money in a safe risk-free investment and get 3.6% (current yield). But, we all know equities carry much more risk. Right, so the difference between the two is the premium you are prepared to accept... the higher risk to put your hard-earned into equities as opposed to govt. bonds (Treasuries or Gilts in UK parlance.)
The ERP varies of course by index with the ERP for the S&P 500 at say 6.4%. So you add the two together: 10%.
You then adjust for the beta (the risk in the stock itself measured against the index in terms of volatility).
This will be the cost of equity. Assuming no debt (so no cost of debt) this is the cost of capital. The cost of capital is the discount rate. The higher the discount rate the lower the NPV, the net present value. The lower the valuation in other words. He is saying that because bond yields went from 1.5% to 3.5% - this lead to the lower valuations. But to completely ignore the ERP from valuations especially for tech companies is baffling to me and isn`t what I learned when I read for the CFA.
(SLP use 15% or so last time I looked - another reason I like the management. They are not aggressive in their financials with daft discount rates like 4% lol. Simon T - what is going on in your thinking??)
I really hope so, will move the price down.
Back up the truck and load up.
Has Xmas come early?
TY TW TY !!
" In other shocking news... night follows day."
rofl
The TW piece is behind a paywall.
If you ever would like information about what pro money managers are putting their clients` hard earned into in respect of the U.S. indexes, NASDAQ, NYSE et al you can go to SEC
https://www.sec.gov/edgar/searchedgar/companysearch
key in the hedge fund and search on 13 F
https://www.sec.gov/Archives/edgar/data/1389403/000110465922119059/0001104659-22-119059-index.htm
click on Information Table html
https://www.sec.gov/Archives/edgar/data/1389403/000110465922119059/xslForm13F_X01/infotable.xml
and there you will find the securities and by dividing the amount paid by the volume, the share price paid.
This will give you a good feel as to how much the so-called professionals are paying for the stocks listed.
It was this route that made me aware that Point 72 Europe - Steve Cohen - had bought into Zhihu at $8.10
So I waited until they were a net net and went in at 1.60 albeit - late - urrggghhh. This had been in my sights for weeks before but I did not pull the trigger.....(lesson learned)
Still, 31% yesterday and 13% on the open today but that is peanuts compared with what Steve C paid.
So there you go.
As you were good people.
"deals done"
Ah - fuk yeah, of course it is.... dumbass me must have done missed that one. Thanks Mr Enlightenment.
I can add you to my Mr. Men collection along with Mr. Silly, Mr Strong, Mr. Whisky - Guzzler, Mr. I can nay fooking spell t` save me bleedin` life, et al
ianfm
I don`t know what approval you think is going to make this close but there are CPs - two of them.
Conditions Precedent.
If they do not get fulfilled, this is a no go.
What concerns me is the Long Stop Date. This is a termination trigger. If that happens lots of egg on face etc for AET team. But I have put that at 25% risk
With a 75% probability of this going through with those CPs fulfilled.
The question then becomes exit price on this part of the investment. The bulk I will hold.
The market is putting a price on risk otherwise this would be at c. 40. The fact that it isn`t confirms that. So the real question is what is the likelihood this will not happen. IDK. No-one does. But I am trying to compute a special situation calc to do a risk and return exit price for some of my holding. (The rest I intend to leave in.)
Part of that calc assumes a risk factor. I think 75% is not aggressive.
(Incidentally OT, there is a similar MSFT position with ATVI atm with a potential 25% return.)
This has become a pure arbitrage opportunity for speculators. Not risk free of course
What % do you put on this NOT happening...25%?