The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
That is so funny. "This is the debt and cash of Sylvania Platinum over the past years: " [below that is a bar chart showing cash in 2007 to be on (more or less) equal footing with cash in 2020]. That is pretty impressive considering the fact that SLP`s basket gross revenue in 2007 was $12.6m as opposed to 2020`s gross basket revenue of $139m over 10X lol.
GF is a subscription service.
Say no more.
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So today, (7 June) IC have a published screen called AIM GARP (growth at reasonable price) and surprise surprise SLP are there but they failed two of the 7 tests, one being "cash conversion" - the threshold being operating cash conversion of 90 per cent or more. That is operating cash flow/operating profit x100. Anyway hmmm thought I that's not right (or is it?) so I turned to 2020 AR and there it is: op cash flow = $58.023m ... op profit = $54.33m. That`s 106% (not forgetting the add-back for depreciation and amortisation but only makes up 10% of op cash flow).
(The same screen has a NTM (next-12-months) PE of 3) !!
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Have you heard of Helmut Strebl? I once sent him a pic (post training) and he replied: " [...] at any rate, I want to say that I am truly impressed by the pic. "
Coming from him, that was like praise from God lol.
Lots of years graft have gone into your training -well done indeed!
I just do it for fun. Currently on 10 pulls ups, 60 dips and 70 press ups all with proper form. My core needs to get back to Bruce Lee standards as I`ve been lazy!
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Metals Daily have Rh at $24k.
There is no such thing as definitive intrinsic value. It is like asking what is beauty; it means different things to different people. 200p - what is his risk appetite? Does he demand a 5%, 10%, or 15% return?
If we assume SLP net income for 20/21 will likely be around $116m. If we further assume a blend of (1) normal growth (-1.5% 5 yrs and then 2% for 5 years); (2) best case growth (3% for 5 yrs then 2% for 5 yrs) and (3) pessimistic growth (-3, -1 ) and then weight them: normal (30% probability), best case (10% probability) pessimistic (60% probability) discounted back at 10% , the intrinsic value, fair value, or target price is 223p.
This Rh "spike" has thrown people off kilter, it is almost a distraction in the sense that we have been completely spoiled. We think OMG Rh is tanking to ONLY $20k!
If I drop the net income down to $83m and adjust the probability weightings to 40%, 30%, 30% with the same inputs I get bang on 200p In short, I think Simon T`s target is (rightly) conservative, having said that we don`t know what discount rate he used or how he calculated his terminal value but my guess is both of those are also very conservative.
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"Brokers’ consensus for the price of palladium going forward is forecast to decline and then hold steady at approximately $1,500, thereby shifting the value of some of our exploration projects, especially Volspruit, quite significantly. "
-2020 Annual Report
Pd spot is nearly double that forecast at $2,803 (03/06/21)
If $1,500 signaled a "significant shift" in 2020 what does it signal now ?
I`m looking forward to the Chairman`s update later in the year.
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$25,250 on metals daily
https://www.metalsdaily.com/live-prices/platinum/
scroll down to bottom
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Warren Buffett relies on what he calls "Owner Earnings". This is net profit - add back depreciation and amortisation (and other non-cash) expenses and remove maintenance (stay in business) capex.
SLP are great in their Annual Reports as they very usefully provide us with this maintenance (stay in business) capex data which looks to be from 2015/2016 approx. two-thirds of their capex spend.
Assuming a SP of 142p I worked out SLP`s free cash flow yield at 21% based on Owner Earnings of $113,537,362 (for the year 20/21) and free cash flow per share of 29.4p.
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TBTT - any idea what THS revenue split is on its Cr operations as opposed to its PGM operations? I`d be interested to see a PGM ounce as a ratio to market cap for both. In other words what the market values a PGM prod. ounce for both.
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Que paso?
Means:
What happened?
10 years + reading about what SLP were planning to do with this asset and ...nada.
Will it ever be exploited? Either exploit the rights or sell them, but this is no-mans-land.
Rh won`t last for ever. And then what...? Or, don`t we care...?
View?
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IC: 28/5
The top 10 cars sold in the UK are still all petrol or diesel cars, with the Vauxhall Corsa leading the way, although the company with three cars in the top 10, Ford (NYSE:F), has just forecast that 40 per cent of its global sales would be from EVs by the end of the decade – the predicted volumes for Europe are even more optimistic.
Johnson Matthey’s earnings are dominated by its clean air division, which makes and sells catalytic converters for internal combustion engine (ICE) and hybrid cars.
Just as BP (BP.) is positioning itself as a post-ICE company while still generating plenty of free cash (“performing while transforming”) from oil and gas, Johnson Matthey now has to balance big capital spending requirements, keeping the balance sheet in shape and paying dividends.
Matthey finance chief Stephen Oxley told Investors’ Chronicle there was plenty of cash flow to come from the clean air division.
“Yes, at some point [the sun] is going to set [for clean air], but actually, even under our most pessimistic scenario... that business is not only growing in the short and medium term, but is throwing off an awful lot of cash,” he said.
Clean air’s underlying operating profit of £269m was 9 per cent below last year, while sales fell 8 per cent to £2.4bn. ‘Efficient natural resources’, a higher-margin business, upped its underlying operating profit by 5 per cent to £268m, on flat sales year on year of around £1bn.
The new markets division had total sales of £356m in the same period, an 8 per cent drop on the year before, but snuck into an underlying operating profit of £9m.
Oxley said the company’s pessimistic forecast for clean air was cash flow of around £400m a year for the next decade.
Johnson Matthey has built one cathode plant in Poland, opening next year, and has recently signed a deal to build another, in Finland. Lithium-ion battery cathodes vary in composition but Johnson Matthey is making a nickel-based cathode. The industry has looked to nickel instead of cobalt for technical reasons as well as supply difficulties for the latter.
Johnson Matthey has agreed a supply deal with Norilsk Nickel, which famously got hit with a $2bn fine for spilling diesel and has a long record of environmental issues. Oxley said nickel supply was limited and Johnson Matthey was in the same boat as competitors, and that his company would work with the Russian miner to "improve its record".
The other big area of investment is hydrogen, which fits with Johnson Matthey because of its platinum group metal (PGM) expertise. Platinum, palladium and other metals that are used in catalytic converters are also critical for clean technology, such as the electrolysers that split water into hydrogen.
Despite massive hydrogen investment globally in the past year or so, its use-case is less certain. Johnson Matthey forecasts its fuel cell business will have sales of £200m a year by 2025.
Johnson Matthey is painting electrification as a massive oppor
To add, SLP relies (indirectly) on Chromium. The main use for that is steel-making. If construction is booming, steel will be and Cr will be in demand.
And the reverse is true.
Look at SLP annual reports from a decade ago to see these kind of risks when PGMs were down and gain a rudimentary understanding as to the underlying reasons why.
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It may be just wording, but for fear of putting people off and just to clarify, Phil Oakley doesn`t do any "Technical Analysis" on IC or off of it as far as I know; he is all fundamental analysis. Agreed it is good for dipping in and out of. (Michael Taylor is IC`s TA expert.)
Havent got around to TSMM by SC but seen he has been pushing it widely on YouTube and abouts. PO also gave it a thumbs up IIRC.
SLP doing well today so far. Your Bank Holiday prediction is on the money so far V-man.
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IMHO, SLP does not need STHO.
IC subscribers will (most likely) be Stocko subscribers and SLP comes up in so many screens anyway!
Easy to print "Buy" all of the time.
Am I the only one who maintains a STHO file and then watch the 6% spike only to then see it drift back a month or so later and think okay maybe now I will buy in...?
But not so sure of that.
Besides saying things like "pro-forma earnings" - big red flag right there, (translates as "AS-IF" earnings) STHO is prone to being a bit "lazy". He cuts and pastes from Annual Reports, which is pretty crap if you are not simply coping facts. But he doesn`t, he copies (advertently or inadvertently) management opinions.
Last year e.g. the buy stock was about some UK listed Asian air conditioning unit manufacturer, I don`t remember the precise details. His point was (copied word for word from the Report) was that the local law changes (the market they were selling into) would result in a big uptick, I mean BIG. These guys did green air con.
Only it never happened. A profits warning was published following a change in the law - not in their favour.
That completely smashed the investment case like a china vase in front of an express train.
STHO had never even mentioned any such risk. He just assumed it was a fact, only it wasn't.
Lesson learned there. Thank God I didn`t invest.
Having sad that, if his view brings more peeps in, praise da Lord.
On a more positive note, his fellow IC expert Phil Oakley IS the nuts in my view. His books is a MUST. (google it.)
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https://www.tradingview.com/x/o0ShCt0w/
Very positive.
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Deutsche Bank Xtrackers Physical Rhodium ETC
holding - is that a green candle I see?!
https://www.tradingview.com/x/JLUFnC4P/
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I completely agree el Cajones de las Tungsten - not meaning to put a downer on SLP as it equally my biggest holding. For those who may be concerned at the recent Rh fall, I was trying to put that into perspective by painting a bleak picture not aligned to reality but in any event even with that scenario it is still 25% under fair value.
On a more realistic note, I don`t see that pessimistic view being played out and incidentally you predicted a Pl uptick and that is borne out in the Pt futures contract which is looking strong (soon to be tested as it hits WMA 50)
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