simplethesis - maybe it should "make perfect sense for us too" ... why would any intelligent BoD want to provide aggressively optimistic forward projections in a volatile and unpredictable market and regulatory environment - especially when you are engaged in a sustained, long term share repurchase program with your surplus cash. With a PE substantially below 10, this BoD are obtaining for all of us shareholders a return on cash in excess of 10% by simply keeping the share price low and using cash to buy shares ... please tell me where you would get a guaranteed 10%+ return if they increased the dividend to you.
I'd like a little faster capital growth, but I'm happy to wait for us to drift back to 1600p / 1750p and I'm sure when our FY revenues are 800m+ and net profit 350m+ we might even hit 2000p all whilst having bought back thousands of shares at an average around 1600p
Buster - don't think I've been invested here as long as you but I have suffered for over 5yrs now.
I still use my gambling analogy to support why I'm heavily invested ... and that is that this stock could go bust or go to £3 on the next piece of news ... if you think those are 50:50 odds then as a gambling man you would be prepared to buy below 150p.
I happen to be much more optimistic, but the market doesn't share my sentiments (yet). I feel with the re-financing our chances of going bust are under 10% ; our chances of just drifting along at under 5k oz p.q production is around 25% in which case our current price is about right (maybe we get to 150-180p) ; but our chances of sustaining 6-7k oz p.q production is now around 33% and our chances of growing to 10k oz p.q producer in the next couple of years is also around 33%.
So my revised gamble is 0.09 x 0p + 0.25 x 150p + 0.33 x £3 + 0.33 x £5 = fair value 275p.
They're going to report 2020 results showing that revenue grew from $14m to $27m, which will catch people's attention ... if they can also report that Q1 '21 production was 7k oz and that they additionally milled some of the surplus mined ore from q2/q3 last year and so report Q1 revenue around $17-18m then this gets very interesting ... if they can finally credibly state that 2021 production guidance is 30k oz then this doubles in price instantly.
Problem is I've been waiting 2yrs for them to make those statements and they have failed to deliver ... but maybe this is the year it all falls into place !!! GLA & DYOR
Mickey - sometimes you want quiet BBs ... too many are full of drivel, ramping/deramping and useless "non" information.
ALU is operating under the radar and going about its business steadily. My Jan prediction of 100m revenue 10m profit looks quite achievable after the interim results and steady growth from there should continue. Given my average (below 100p) I'd like to see this providing a stream of 10%+ dividends for many years to come and a little sp growth on top
It's very easy to buy in here, there is plenty of liquidity today ... you just can't buy at yesterday's closing price of 4.125p.
What alarms me is why the 30% movement on no news ... this smells like some insider info has been leaked ... and that's always a bad sign for genuine long term small private investors.
I certainly hope BoD get an RNS out a.s.a.p.
I've kept faith with Live for a couple of years now getting my average down from well over 25p to a shade under 7p now and can see a bright future as restrictions lift, but trading activity in advance of news is not good for reputable companies.
Human nature dictates that most people hate losing money much more than than like making it. Unless you have huge risk tolerance you would probably do better to sell 1/4 to 1/3rd your initial holding, lock in some profits and basically have free money riding on the future. You'll still see plenty of upside if everything goes well, but if it all implodes, you know that you have made a healthy return on your investment. Consider how you felt when the price rose from 2p to 8p in January then fell back to 5p in March ... if watching your paper profits disappear made you really anxious then now might be a good time to get some real cash back in your account
I saw my first £15k invested in ITX turn into £1k, but then saw a further £10k investment turn into £70k, there is no telling where this is heading next - good luck whatever you decide
Lots of euphoria after the results announcement today, so I'm going to dampen a few of the ultra positive holders, especially those new to this share.
I top sliced again today at 7p and will continue to do so at 8p / 10p if we get there. I started top slicing at 2p !!!
I've been invested in ITX since the Revolymer days when they tried flogging nicotine gum in desperation !
For those who don't know the history this company listed 25m shares in July 2012 @ £1.00 giving a total market cap of £53m, the highest it has ever been. I bought my first shares at around 50p before the first dilution in June '16 @ 37p.
I then watched this basket case decline all the way to 5p in early 2018 when it had a market cap of under £3m.
The shares were suspended in the summer of 2018 and then a monster issuance in July took place at 2p, a 67% reduction on the prevailing price .... market cap after that stiffing of existing shareholders was under £5m.
At that point I decided to double down heavily and got my average to around 12p.
But even 2p wasn't low enough for ITX, last year in March '20 it dropped below 0.5p and a market cap of under £1.5m.
This was when I lucked out and took the plunge to treble my holding by purchasing 1mm shares for £6500 ... reducing my average to a tolerable 1.8p from which I thought I might be able to recover my losses if the turnaround ever happened. By December I was back around breakeven and I've been top slicing ever since so that now I've recouped my initial total investment and still have a holding worth more than that ... yes it would have been much more if I had held tight but I still don't have great confidence in this basket case ... here's why.
Today's 156% increase in revenue has blown people on this BB away because it is much higher than expected ... so let's assume we deliver 50% growth for the next 3yrs and move from £3.5m revenue to £12m revenue , manage to maintain a 33% gross profit margin and management stayed disciplined and keep Operating Expenses to £4m (fat chance) ... that's still only breakeven. Another 2yrs of 33% growth and we get to Rev £21m ; GP £7m ; Net Profit maybe £2m. That equates at current market cap to a p/e of 15 hardly earth shatteringly cheap for 5yrs of stellar growth. Furthermore, if the prospects for some of our products is really explosively good then I suspect one of the big chemical companies would be looking for a pull back in the share price to below 5p in order to put an offer in at 8-10p and subsume into their own much larger operations.
My prediction is that the £53m market cap on the date of the IPO in 2012 will not be achieved by an independent ITX.
That's my opinion, I've backed it up by a rational analysis and I look forward to hearing some constructive opposing points of view ... but I suspect I'm just going to get the usual '****ging off' from all the partygoers.
So here is a recast of the Plus500 revenues for the past 4yrs
2020 Customer 997 ; Trading -125 ; Net Revenue 872
2019 Customer 382 ; Trading -28 ; Net Revenue 354
2018 Customer 548 ; Trading +172 ; Net Revenue 720
2017 Customer 540 ; Trading -103 ; Net Revenue 437
... it's pretty clear that trading losses are highly material to the group results and have run +/-30% of Customer Revenue
Now lets look at 2020 by quarter
2020 Q1 Customer 236 ; Trading +80 ; Net Revenue 316
2020 Q2 Customer 320 ; Trading -72 ; Net Revenue 248
2020 Q3 Customer 240 ; Trading -24 ; Net Revenue 216
2020 Q4 Customer 201 ; Trading -109 ; Net Revenue 92
... even more volatility in the "trading earnings" than in previous years
... and finally let's look at Bitcoin prices at 31st Dec 2019 and each subsequent quarter end
Q4'19 $7.2k : Q1'20 $6.5k : Q2'20 $9k : Q3'20 $10k : Q4'20 $29k ... Q1'21 $55k
So if Bitcoin trading is the main source of our trading losses and a price move from $10k to $29k in Q4 caused most of the -$109mm trading loss then no wonder the market is waiting for the Q1 results before re-rating this share price higher !
Are we going to see weaker Customer Revenue of $180m and larger Trading Loss of -$150m = Net Revenue $30m or are we going to see higher customer activity, say $280m and better risk management, say Trading loss only -$40m = Net $240m.
Pretty hard to put a convincing value on this stock when quarterly net revenue could change by a factor of 8 !!!
For my part, I'm still over-exposed to PLUS ; I'm encouraged that quarterly customer revenue might have shifted higher to the $200m +/-$50m, so if we can limit trading losses to just $100m p.a (forget about flat over the long term) then we are still looking at a p/e <5 which is just crazy for such a cash generative business
Rusty - you seem to have answered your own question about IRC ... so underlying profit around $20mm giving p/e around 20 and the market is still pricing IRC lower than Oct 2016 ... I'd still prefer to see POG lose the @240mm contingent debt rather than continuing backing Jay Hambro !
The two P's managed to over-estimate production nine x out of ten during the 2010's, so maybe Sturckov is doing something almost unheard of these days .... gathering data, analysing it and making informed comments in the media rather than just spouting rubbish on twitter. All gold stocks are 25-30% below their recent peak prices and all will turn when Bitcoin falters and/or spot gold price rises back above $2000. For now we're back in the unloved category ... or maybe the savvier Chinese / Russian / Middle Eastern Central Banks are stocking up their reserves and ditching dollars whilst the going is good.
Does anybody know how to open a Chinese Yuan bank account .... parity with the greenback can only be a decade or two away
In my notes to myself last November I put a top slice order in place at 125p and had 150p as fair value.
I've made good money on TSG over the past three years (my av around 55p) but it is still disappointing when these cobbled together offers are forced on small shareholders (I guess we could all reject the offer and hope for better) .... this price doesn't even match the post Covid high that TSG reached last year !!!
I think if their "trading results" are driven by punters taking long positions in Bitcoin then they will have a shocking Jan / Feb & March. It's been several years now that the BoD have peddled the narrative that in the long run "trading" will be neutral .... but in that time they've lost about $250mm ... they need to either improving their traders or accept that they will perpetually be on the wrong side of certain trading strategies
Rusty - about the only updates we ever get in March are either about IRC or the latest Boardroom shenanigans !
Let's hope we have some boardroom stability this year and maybe some sort of 2021 outlook statement from the new CEO.
On the IRC front I see that the HKD share price is up 50% on 31/12/20 ... so maybe I'm going to be proved wrong and IRC isn't the millstone I've been calling it for the past 6yrs ... mind you it is still trading at half the level is was at when the 2015 POG Rights Issue occurred
It's now over 6mths since the flanks license was granted, which I had thought was the hold up on progressing the sale.
Find it hard to believe that BoD have nothing to update over that period, just the daily Form 8.3 announcements.
Maybe the fact that PMG basket prices have risen about 30% in that time is causing difficulty agreeing a price !
Profit for the year was almost exactly in line with my calculations which had led me to believe that this was worth double the current share price ... however the Tanzanian Legislation comment "These changes preceded the announcement by Barrick Gold on 20 October 2019 that they had entered into a bilateral agreement to share the future economic benefits from Barrick Gold's mines in Tanzania on a 50/50 basis. It is management's view that a similar arrangement between Shanta and the Government of Tanzania could be required" seems to suggest that we should continue to expect to pay away $21m tax on $39m profit. If that is the case then I might need to re-assess ... even with Singida 37k oz and increased production in 2022 with 50% being taken by the Tanzanian Government we might struggle to get much beyond 20p !
Good to see commentary on the company not other contributors returning today.
My main takeaways from the presentation were the concerns voiced by the Credit Rating Agencies (although I don't generally have a high opinion of CRA as being able to detect risk even if it hits them in the face) ... so I don't think we'll be getting a divi any time soon. I was also disturbed by the v.high AISC at Pioneer (our growth mine) vs low AISC at Albyn (in decline). However the projected mine output for 2022 at 40% above 2020 actual ... and mix towards higher margin own concentrate ... really could make for a very profitable next 18mths. With reasonable margins on a 2022 production of 750k oz I'd say we could double in price from here. So I'm a HOLD for now with a bit more top slicing at 35p & 40p.
Oh and Rusty I still think you have plenty to gain from investing in THS ... it is trading barely above the high it hit in 2019 pre the Feb/Mar 2020 Covid selloff and with PMG prices substantially higher.
Hard to imagine that a company that sold pregnancy testing kits to Chinese women in October, with a share price below 1p then bought a gene testing company for around £500k in mid November should now be at £40m and some people thinking it might ten bag from here ! Just glad I kept the faith with Concepta last year.
But here's the thing with fads the price has no relationship to reality (Tesla / Snowflake etc) in the short term.
Mind you if I understand correctly the UK government (and US & probably most of Europe) are looking to have students "self test" every two weeks .... so just in the UK 9mm students x 20 tests each (between now and end of 2021) @ say £10 profit per test means we have a £1.8bn prize for the lucky winners.
And whats a £billion or two to the UK government these days when Stephanie Kelton and the Magic Money Tree are in vogue.
Just remember that "unrealised profits" are nothing until you sell and crystalise them
Since gold is rather in the doldrums right now and will probably drift for the next few months until paying for the damage to the global economy becomes a factor again .... I'd like to offer up a precious metal miner alternate to POG. Platinum / Palladium and especially Rhodium have been on a massive run and some of the PM miners have followed suit.
JLP has gone from 2p to 16p since last March low and SLP from 25p to 125p. However Tharisa (THS) has "only" gone from 40p to 130p ... and here's the rub .... all three are valued roughly the same at £350mm, but THS has the same production as the other two combined. I think JLP & SLP are fairly priced but THS really should be close to double its current level.
Full disclosure I own all three of these and having bigger positions in all of them than POG currently.
Freddie - you have the rights issue back to front
If you had 100 shares for which you had paid £4000 you would have been entitled to 15700 shares in the RI costing just £785.
So your current holding of 16,700 shares which cost you £4875 are now worth £4500 at 27p. So even somebody who had an average of £4 before the RI would now have re-couped their losses !
The tricky part was that immediately prior to the RI your 1000 shares were worth just £125 (a 97% loss) and you were being asked to spend over 6x that amount to participate ... fortune favoured the brave !!!
I've also topped up today - even though production and grades are down this is just too cheap imo.
I've been invested since 2016 and this is a rare gold miner that hasn't managed to make me money in 2020, but unlike so many holes in the ground with a sleazeball standing over it ... this is actually a productive mine. I can't help but think that if ALL HUM did was mine 500k oz from Yanfolilia over the next 5yrs and made just $300 p.oz net profit and wound up the entire business they would still realise $150mm profit for current investors. If any grade improvements arise ; or any new reserves are added or either of the major projects Kouroussa or Dugbe produces anything then that has to enhance the value substantially. Even if they cut production to just 60k oz in FY 2021 to maintain margins it would still put this on a p/e of under 5 !
Think you need to consider all of the recapitalisation shares issued and not just the 15:1 consolidation to gauge the potential price increase here. The SAGA market cap was around £1.3bn back through most of 2018 .... so a return to close to that would see the share price doubling from this level ... I think that is possible if the cruise business gets back to previous profitability but I'd be quite happy if we got back to around 500p in 2021