Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I've held LGEN for a while now and love this share for the divi. Its laggardly sp does make you wonder, though, if the market cap will ever take off anywhere near those circa 400p projections.
Not that long ago, Breedon was, for nearly a year, the top gainer in my portfolio. These days, it's just another footnote, albeit I'm still 7% up. Doubtless the market cap will recover, once construction activity returns to normal. Meanwhile, we can probably look forward to its languishing in the usual 60-70p range for the next couple of years. The only silver lining is the divi.
I've held Wimps for 4 years and even after reinvesting all the 'generous' divis, I'm still well down. This isn't quite my top dog share, but it's up there with my worst FTSE 100 buys of all time. Wimps could strike gold and the market cap still wouldn't budge. After the initial euphoria, expect it to return to sub-120.
And before anyone asks, I'm talking it down because talking it up has never done any good.
I bought HSBA and Lloyds during Covid (summer 2020), on the basis that they would eventually be paying a decent divi again and consequently the market cap would rise. I couldn't understand why everyone else wasn't doing the same. Was I missing something? Apparently not.
With inflation and continuing airport disruption (not to mention the other risks associated with this industry) it is hard to see IAG getting itself out of the rut anytime soon. I can see it visiting penny share territory for a while (it happened to Rolls Royce) and possibly requiring another cash raise in the next 12 months. On the upside, it will probably recover - and be paying something approaching its old divi, in about ten years' time.
Similar disruption is happening at airports around the world. I was at YYZ in Canada last week and it was bad there. I and several people I know have been put off flying for years by recent travel experiences. Flying was always a bit of a nause, but it just feels like too much hassle these days. The good news is that the airports and airlines will probably have returned to near normal operating conditions by next summer (assuming terrorism, strikes and the other perils of the industry don't intervene). The bad news is, many people will have lost the desire or won't have the spare funds to travel abroad in the next couple of years. There are unlikely to be many bargains out there. How many airlines, including IAG, can afford to stay on life support for another two years?
I have had a 90p buy limit on IAG since the outbreak of the war in Ukraine. I think it will probably hit that level some time in the next couple of months - and might even head lower (e.g. as Rolls Royce did).
Given the current state of the industry and the economy, it is easy to see the company accruing even more debt before it makes a meaningful recovery. I can't see it paying dividends again in the next 5 years - and it probably won't be yielding 5% for another decade or so. This should now be considered a risky buy and priced accordingly.
US PE will probably bide their time, until the sp has reached a 6 month average of 225p (at this rate, in about 6 months time), then offer a premium of 35% - and tell us how generous their buyout offer is, at just over 300p. Trouble is, by then, most of us will probably believe them.
If this keeps rumbling along in the 200-250p range for the next few months (as seems likely) , I can see a PE takeover bid coming. PE appear to have a nose for undervalued companies, whereas the City seem happy to leave them hanging out to dry.
With these weird huge price drops, the FTSE 350 is behaving more and more like the AIM these days. Given that the stock market is now largely run by computers, algorithms and passive managers, we shouldn't be surprised that it doesn't behave according to human rationale. Knowing why it happens doesn't make it any more palatable though.
The SP appears to be reverting to its performance during the dark days of Covid, (understandable then, but ridiculous now). I certainly won't be topping up, regardless of how low it goes. Throwing good money after bad is never a good investment strategy. I'll do what I usually do with poorly performing shares - stick them on the back burner and hope for better things a few months (or years) down the line.
I bought this as a 'recovery share' toward the end of the second Covid wave. Clearly the company is recovering, but the market cap is not. I'm filing NEX in my $**t share column, along with the likes of Taylor Wimpey. Hopefully, some American PE buyer will come along and put it out of its misery. Strange how foreign private buyers can see the true value of our companies, but the City cannot.
The historical metric.
Even up 7%, this is still dirt cheap.
With a bit of luck, Countryside Properties will turn down In-Cap's approach and they'll bid for Wimps instead, finally putting this share out of its misery.
I thought this would grow slowly post-100p (and paying a divi), but it seems to be returning to its old form (i.e. bouncing around in the 60-70p range. Pity, but can't say I'm entirely surprised. Breedon probably needs to make the leap into the main index for the sp to gain any long-term stability.
There was much consternation here several months ago when someone dubbed this a 'dog share'. If it wasn't then, it certainly is now. The market cap has been woeful throughout the housing boom and now, as we head into a probable market slow down, it is pitiful. What next? The FTSE 250 probably.
"I have already informed everyone that nothing will happen"
Oz The Great and Powerful has spoken.
Oh well, it looks like the RR chat room has turned into yet another irrelevant general discussion forum. I'll stick to the financial press for any updates.
The uptick in defence activity alone ought to have put it circa 110p. Civil aviation (and the prospects of the Indian deal) are looking good for the medium term. SMRs are more of a long-term thing, but could well bring a substantial uptick in the next 5-10 years.
As for Monday, 100p, if there is no further A&M news or an RNS. 120p if there is.