Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Given what just happened with Nordstream and the recent “buzzing” of various Norwegian offshore oil rigs by various unidentified underwater drones, it would be interesting to know HUR – as a single point of failure asset – has disaster insurance in place.
And, specifically, whether such insurance excludes force majeure and whether it covers remediation in such a situation (because it would have been an unplanned de-commissioning with much more damage caused).
The leadership team here seems entirely uninspiring. And they have virtually no "skin in the game in terms of shareholding, so its hardly surprising that they just seem to be sitting back and ring the nice salary wave.
One would have thought - and hoped - that either Crystal Amber or a decent quality chairman would have done something about this and get in a crew who could either put that cash to work or work out a way to give it back to shareholders.
One needs to be very careful about the slippery slope called conspiracy theory - because then the sounds of flapping white coats coming down the corridor cannot be far away.
And,it does appear that there may have been sabotage of Nordstream.
It is far less clear that the villain is necessarily Putin (megalomanical nutter though he be).
www.youtube.com/watch?v=jLb0QeCQF_I
For any of those interested, it suggests that certain parts of the Washington establishment might not be above suspicion here.
Ignore the messenger (Carlson can be a bit grating) - just contemplate the possibility that he could be even partially right. And thus the ramifications globally.
All of which continues to speak to the massive VALUE of the assets PRD has assembled. If there is going to be a huge storm, one might as well be selling raincoats.
The SP seldom goes up because there seems to be little reason to price in any excitement. The SP is basically a proxy for the value of the cash held by the company off a single asset (high single point-of-risk) which has only a few years of life left.
There seems to be no discernible strategy for the future of this company and the leadership team (management and board). And why another company would look to merge with a company that has nothing more than some cash in the bank - even then, they'd hardly want to pay a premium for cash.
Getting a decent leadership team might give some renewed lease of life of what seems to be a tired, listless, strategy-less company.
I am not being negative here - I hold a small position and I think there might be some short-term gains as the SP comes to more accurately reflect the cash balance.
But companies without a strategy for the future seldom attract much excitement from investors.
I am also in PANR (smaller position than in PRD but material) and, like PRD, I believe it is a fundamentally very VALUABLE asset and that the share price will at some point reflect that.
I do not think that date of VALUE-SP correlation to be never-neverland stuff at all but trying to time the market successfully over any period of time is very difficult indeed. Of course, I know some people are active traders (I am not - i do as much research as I can to identify what I think the probability-weighted VALUE is and then hold until the correlation happens).
Unless, of course, there is a significant change of circumstances in the asset quality (because that affects the likely VALUE). But SP movements, certainly in the short term are not change of circumstances, they are just weather on the way to the destination.
Far be it for me to make any suggestions to others on investment philosophy or style but I have been in the game over 30 years and would simply observe that getting too worried about short term SP movements, whether to the positive or negative, is distinctly unhelpful one's sanity and enjoyment of the journey.
I remain very positive PRD and PANR and have seen nothing in the asset quality of either to give me cause for concern.
DYOR, etc, etc.
I also expect the share price to track somewhere towards the 9p range, simply based on the cash balance.
But how do shareholders get to see any of that cash balance? The company can't dividend it out (insufficient distributable reserves), so it just sits there on the balance sheet, being pretty much sod-all value to shareholders unless the company winds itself up - which would be at least a few years away.
During which time the oil price could go anywhere, including down.
Single asset, unloved sector (fine by me - I hold a few other O&G stocks I believe to be severely under-valued. I have only a small holding in HUR because I think it is pretty close to fairly valued with no real upside potential. And, anyway, I can't see how the value of the cash on the balance sheet can actually be gotten out into the hands of shareholders.
So, I have a small position because I can see a max 30% rise from current SP - and no ways to access cash for shareholders.
Obviously, I am disappointed to see what has happened with GRH. And I think the BB will be much the poorer for his departure.
I do think, MEM, you have hardly covered yourself in glory in playing a not insignificant role in causing this most unfortunate development.
Obviously, I am aware that there is considerable debate about the merit of Chancellor Kwarteng's strategy to arrest the current slide towards disaster.
I happen to think the man is on exactly the right track and reiterate my belief that we needed a Churchill at this moment and he is showing many good signs of being precisely that.
Whatever, the very fact that that that ludicrous fool, George Osborne, thinks what the Chancellor is doing is wrong should give anyone sane enormous comfort that it means the Chancellor is almost certainly right.
I was being unfair on that lamentable joke, Norman Lamont, when I said he was the worst Chancellor of recent times (worse even than Brown or Major).
I had forgotten about little Gorge Osborne (easily done). He wins hands down in the race for being the biggest idiot at No. 11 Downing in recent times (Sunak gave it a good go but, thankfully, was not in office long enough to give vent to the full damage he was capable of).
Polemic,
Your posts suggest that someone much more professionally qualified than I may be needed to help you.
I have not ever seen stuff on this excellent BB that would suggest clearly argued cogent arguments to the negative or even sceptical are not tolerated.
But, its very nature - a BB of shareholders in a given stock - it has a tendency to be self-selecting to the positive (those that truly feel negative (unless on ulterior motive - Redbox, little Nige and maybe yourself) sell their shares (if, indeed, they ever held any) and bugger off to invest in something else.
The quality of discourse here is generally extraordinarily high (just read the stuff posted by GRH, Wacky, Seabright, Methodology, MickTrick and various others). Certainly better than any other BB i have ever seen.
We are very lucky to have the benefit of those informed, experienced contributions.
And, should we ever need extra loo paper, we also have your postings and those of Redbox and little Nige.
I think GRH and MickTrick came through with some pretty interesting numbers, some of which look quite juicy.
Of course, nothing is ever guaranteed but, based on those numbers and even applying some pretty severe stress-testing, the current SP looks to be way, way south of what would be a more reasonable risk-weighted valuation of the company and its prospects.
Put simply, it appears to me that PRD is the mother of all arbitrage opportunities. I am very glad I am well loaded up (and have been for nearly 3 years) and I fully intend to deepen my exposure (upside potential) to this stock.
It may, for whatever reasons, have been overlooked by the market. In this case, I think they have missed a gem - that is fine. The truth (VALUE) will out in due course.
This is one of the most exciting stocks I have invested in in what is now quite a long investing career.
I think making landfall is not far off for the great ship PRD.
Have a good week all.
HTB,
I can think of no more dangerous an endorsement of anything than that it is "supported by 300 senior economic scientists", the vast majority of whom would struggle to run a bath, let alone a business.
Zebra,
I think you and HTB and Androcles might be among a quite small band who yearn for a return of the "great days" of Gordon Brown.
Which is fine - of course, everyone is entitled to their own view. But managing the currency is best one lever in a Chancellor's arsenal. Having an actual, functioning economy that is growing and energised is actually a rather more important factor than currency strength.
I would further observe that currency strength is not always an accurate reflection of economic health. The US economy is arguably in the worst condition it has been since the disaster days of that Democrat/Communist (same thing) Carter in the late 70's - yet the Dollar is stronger than ever??
So, currency strength is not always a reflection of national economic health.
Dissipline,
I agree with you very much. The house of card s is currently very unstable. And I totally agree that it might only need one small domino to fall (Kaupthing's collapse in Iceland set off a tsunami that hit the UK) to see systemic damage (one only need look at the statistics around immunology and virus infection patterns to get a sense of how dangerous this stuff is - Fauci and various other ludicrous buffoons notwithstanding).
Here the situation may be much more dangerous, given that Deutsche Bank is at the core of the pyramid. Their links to Russia and the increasing tendency of executives to feel the need to jump from tall buildings should not be underestimated.
All of which may be interesting or otherwise, as the reader may perceive.
Fact is, that whether there is a major collapse in the western financial systems or not, people and businesses will still need power. Power from stable sources in stable places.
PRD is beautifully situated on that VALUE creation matrix.
I am very glad I found this stock and this team, PG and LB. I have long believed this company to be a stratospheric winner and I have backed that belief with my wallet.
This, I believe, is a very good ship and I feel very happy to be aboard and look forward to berthing at the VALUE destination in due course.
HTB,
I am sure Gordon Brown must be very grateful to know that you are still pumping air in his trumpet, despite his being probably even worse a Chancellor than the farcical Norman Lamont (and that is quite some bar of sheer ineptitude).
On top of which, Brown had a personality which would make Redbox or little Nige seem veritably charming by comparison.
The only way to handle a car that has gone into a slide is to accelerate out of that slide (counter-intuitive though that may be).
I think Kwarteng's statement was a brilliantly encouraging statement in the face of significant headwinds and I think he has every possibility of being the greatest Chancellor since Nigel Lawson (and is certainly infinitely better than that ludicrous buffoon, Sunak, who is now thankfully well away from the levers of power).
The impact on Sterling may be short term negative. That is irrelevant in the context of saving the country's economy.
I may currently live in the (former) Colonies but I am deeply invested, financially and emotionally, in Great Britain and I think that Kwarteng is absolutely what we need right now.
He may indeed turn out to be Churchillian.
Great post, Wacky (as always),
Between Ryan (Ireland), Gwede Mantashe (South Africa) and Gavin Newsom (California), it would be hard to think of a greater collection of monumental stupidity on the planet.
Little Nige,
You really are a most unpleasant chap.
I personally find your postings to be unhelpful and uninformative but some appear at least to have some modicum of actual surrounding them.
The rest is just poisonous, spiteful bile.
I am not an expert in these matters but I suggest that a visit to a therapist - or, indeed, a vet - may be in order. Maybe if you take along your little friends, Redbox, Barnyards and PastaBelly, you could get a group discount?