Member Info for Sirius50

I agree Luna, I thought it was a typo. He is the world`s leading authority on valuation (teaches at Stern). Think that is fair to say. His MBA valuation and corporate finance classes are available on YouTube. They are a joy to watch, if a little "challenging". The detail is really quite something to behold. He really is something special and clearly does not find Wall St in the lease bit attractive and has the tools to dismantle their sharp-practice valuations and happily does so.
If his data cannot be trusted then frankly no-one`s can. Still I would be interested to see the breakdown of the 1620 and I might just ask him. He probably gets 000s of email a day but if you don`t try etc !

Shows how subjective this can be!
E.g. if we look at Prof. Damodaran`s spreadsheet admittedly dating from March 2020 (freely available) he sets out the trailing PE of 1,620 metals and mining sector stocks. The industry average trailing PE was according to his data - get ready for this lol - 175!
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The Wall St. valuation implies 15.19% growth each year for next 5 years followed by 9.5% growth each year for the 5 years after that with a terminal multiple of 20 with a discount rate of 14.85%.
So those growth figures are not outlandish to be fair but personally I`d treat them with extreme caution. If the discount rate/cost of equity is lowered to (say) 10% then with 5% growth for the next 5 years and then falling to say 3% for the following 5 (with a terminal multiple) of 10 the fair value is £3.87. (My own cautious, conservative price is around the £2.50 mark.) If we used discount rates like Goldman, MS et al, of (say) 8% - 9% the valuation is off the chart.
I keep breaking my own rules with SLP. First it was the 10% rule. Then I moved it up to 20% no 1 holding.
Now, after seeing that the market is valuing zero growth (in fact negative) even with a whopping 20% cost of equity I`m minded to follow Buffett's not so talked about rule of always be prepared to break your own rules.
We all know the all time high`s in PGMs won`t stay that way for indefinitely but they dont have to. Even assuming fairly flat or no growth at all, SLP is STILL undervalued! I`m lucky to have some cash lying around and cannot see a better alternative than SLP even at its all time high. And I know that sounds mad... but there it is!
It is a pleasure to be here with you lot. Such a knowledgeable crowd.
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Growth rate: next 5 years (-2.29% p.a) | Growth rate: 5 to 10 yrs (-5% pa) | Terminal Multiple: 8
MCap: $522,140,478
USD Ms
20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32
111.5 108.95 106.45 104.01 101.63 99.30 94.34 89.62 85.14 80.88 76.84 647.07
PV(20%) 90.79 73.92 60.19 49.01 39.91 31.59 25.01 19.80 15.68 12.41 104.51
=NPV Value: 522.83
So with a hefty 20% discount rate on a very pessimistic negative growth of - 2.29% each year for the next 5 years and then -5% for the following 5 with a terminal multiple of only 8, we end up with a net present value of 522.83m = today`s market cap.
STs 200p target price (with the same 20% discount rate) implies e.g. a years 1 to 5 growth of 4.7% p.a. with the next 5 years at 2.5%
Having said that, SLP have no debt (so there is no cost of debt) and 20% cost of equity looks to me very high given the very low risk free rate for USD and even allowing for South Africa country risk. If the discount rate is lowered to (say) 15% the Share Price is valued at 259p
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The market cap is $522,140,478.
Using the last 3 quarters earnings and averaging the 4th (conservative as we know) with a 20% discount rate (very high) the market is valuing SLP at negative - 2.29% growth for the next 5 years, and then negative -5% for the next 5 with a terminal multiple of 8. Lower the discount rate to 10% and on the same negative growth numbers, the market cap reads $ $848.6m.
And this in the context of PGMs, Rh, autos, China, hydrogen, etc etc. I don`t need to repeat, we all know it.
Unreal!!
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Agreed.
it took 20-years for Greggs plc to 10-bag from 120p in July 1995 to 1200p in June of 2015. Missed the 50% p.a. returns boat perhaps? Not a bit. The 2nd 10-bagger took only 4 years - from June 2015 to July 2019!
Appreciate SLP isn`t Greggs but for those thinking of selling where else would you put your hard-earned?
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Same old, same old...opens down on double net profits from last period.
Down 2.7 % atow.
Have to laugh. Looks like Luna got his/her wish.
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Thanks but interest rate risk and forex risk are two different things?
GLA for tomorrow
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I see returns will be 25% less than a year ago based on nothing more than the ZAR/USD exchange rate movement. So a year ago $1 would give ZAR 19.19 whereas today the same dollar gives ZAR 14.32.
I`m not an FD. Has anybody had experience of trying to mitigate forex risk with say swaps or other financial instruments? It is quite a dent in the profits.
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Quote from todays Wall St. Journal:
Ford: The auto maker posted its highest quarterly net income in years, fueled by strong pricing in North America. Shares slipped 3.2% premarket.
MGM Resorts: The casino operator reported another quarterly loss, but it was smaller than Wall Street expected. Shares added 1.1% premarket.

Ce la vie.
I will buy-the-dip tomorrow then !
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Ain`t laughing now lol
10% loss me and closed.
Should have taken a 3% profit on short position. Lesson learned.
Any short profit - take it!
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Sure to be great numbers but SP, bound to be anti-climax, release on a Friday and over a bank holiday weekend. That does not sit right. Hope I`m wrong but seen this too many times, BP, BOO all showed great results and SP dropped leaving people going huh??!

https://valuehunter.files.wordpress.com/2009/05/conversation-ben-graham.pdf
Thanks for that citation Velo.
As you say surprising to say the least.
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TY for your candidness - takes cajones to say something like that - even on an anon BB.
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Obvs a fantastic return and performance Studio - well done! Will keep your annual average higher than Peter Lynch`s 29.2% that one lol!!!
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Thanks for the clarification and agreed that my statement is not as strict as written - he clearly provides the 50 -100% "typical" profit. I was more basing that on his experiences of being (nearly) wiped out in the Crash such that it obviously would have made him a very cautious holder of "common" as he called it.
On reflection is 100% reasonable? I`m happy if I make 30% over three months tbh!
Keep it running, I agree. Much more to go we all feel that is consensus for how long is another matter.

Sage words there and food for thought from you chaps - appreciated.
Ben Graham was wrong then with his 50% rule! Sirius-ly though I take the point about forgetting about buy-in price. And I do agree with the logic/reasoning. Also with the under-value.
Trouble is in the logic/applied reasoning world, a green apple = a black raven :)
Anyway, I see we are having a blue day so far. Fingers crossed.
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Often find it confusing when an analysts "target price" does not indicate as a buy or sell price.
When is enough profit enough? Each to their own but I`m reminded of Ben Graham`s rule of selling at 50%. He lived through the Great `29 Crash so had every right to be cautious.
People have made 10 baggers off of SLP and well done to that. I dont have any such expectations and am thinking now about exit options and at which target price. 138 yields 100%. I`m wondering what to do next if reached. Actually not if but when more than likely.
The likes of Studio no doubt have done considerably better than that already.
Thoughts of all LTHs welcome.
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4 trading days left - payout 3 May.
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Back to the highs

https://www.tradingview.com/x/ArF0Hhf8/

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