We would love to hear your thoughts about our site and services, please take our survey here.
I've been mulling things over. I've read the last couple of days of posts and gone over the RNSs from this year.
- The business has made all the capital investments they are going to make
- The company is making a profit
- Sales are increasing
- The business has a long lifespan
- Marketing is going well
- New 25KG bag is selling well
- The solar array will save them 8% per annum
- They have other similar products in the pipeline (lime)
So why is the share price in the doldrums?
If you are asking why I said these things, it's because it's my opinion of what I think is about to happen in the short term. I also added my thoughts about why this might be. All I'm attempting to do is understand the company and share price; and to discuss it on a public forum. Thus far, my short term predictions have proved to be fairly accurate. As long term holder I really dislike the current share price. I've held shares in HMI for several years, I've traded and averaged down. My most expensive buy was 18p. And yes, I think HMI is worth a buy at 18p.
I really like the business of HMI. I think they have a golden opportunity to grow very significantly while at the same time helping to solve some issues with sustainable agriculture and environment. I honestly think this company should be valued significantly higher than it is today.
I do believe the business is "almost there". I think the next results will bring HMI to the forefront of the investment communities attention. And I think that long-awaited re-rate will materialise.
I would like to see the HMI appoint one or two new people to the board. I've said it many times that I think we need to appoint a CFO.
What are your views on the company, Swingy?
Trust definitely needs to be rebuilt. As I said in post previously, the company needs to appoint a CFO who can communicate sales and cash properly.
From the podcast, in one breath Brian says it is a really simple business and the next he talks about the complexities of reporting. It really is a simple business. Dig stuff out of the ground, process it, put it in bags, sell it, get cash. Compared to other listed businesses HMI really is a simple business but those other listed companies seem to be able to report to the satisfaction of the investors.
Sadly, I see the share price dropping away to 3p ish and maybe back to the previous lows of 2.5p ish before the next results.
I never thought I'd be agreeing with one of your statements, smalleyus! But the facts are true, that RNS and what was said in the podcast don't align.
I'll say it again, the company absolutely has to appoint a time-served Financial Director/CFO. Brian is making a mess of communicating the financial position.
The rest of the message in the podcast is clear though. The company is selling above their target. They are not discounting the sales price (other than rounding the corners by 1-2%). The ending message regarding dividends, I paraphrase: "not this year but in 12 months we will be having a different conversation". He is saying as clearly as he can: cash surplus on the books is coming. Now all we need is a CFO to show us the numbers and the SP will rerate.
If you are in profit I'd suggest you sell a few and trade the 3p to 4p range. I predict the price is going to slide away (not dramatically) over the next month. Buy back in a few weeks/month ish. Should net you 10 to 20%.
I'm still really confident the next set of results at the end of the year will bring a re-rate.
I've been trying to work out two things. Firstly, why the market did not re-rate the company at 6p plus. I'm putting that down to doubts over unit sales price, cash position and the crazy high fees to directors and consultants which offset the sales performance.
Then I've been trying to work out what the share price is going to do next. I think we will see a slide back to the lower side of this trading range before we get the next results, around 3p. I still think we will see really good sales performance this year but there are too many doubts and open/unanswered questions.
The shares I hold are locked away for at least 2 years.
My gut feel is something is a bit wrong. If any financial wizards are reading this forum can you help me understand how this all works? The numbers just don't seem to match up.
f15jcm, yes, good point. I would expect the credit facility to be like invoice factoring and they would get a good percentage of cash on invoice. If my old brain can recall correctly, a company I worked for some 30 years odd ago used to get 50% of the invoice face value at time of order and a further 40% or so when the client paid the invoice.
This is a bit of a warning flag for me too. I've not been able to match them up or work out the price per tonne sold. I would've predicted a cash accounting profit in these results given the amount sold. I guess most farmers have taken advantage of the credit facility and we will see the cash in the next results.
I've said it before and I'll say it again, I really hope they appoint a time-served Financial Director very soon. Having Brian holding all these roles is not good business. The objectives of a CEO are very different from that of a CFO.
john4242, no, I added the link because of this:
"As a result of Jangada's reduced ownership in ValOre, Mr. Brian McMaster and Mr. Luis Azevedo have stepped down from ValOre's Board of Directors, effective June 1, 2021. Mr. Azevedo will continue to assist ValOre as a Strategic Advisor."
Our CEO, Brian, has fingers in a few pies. Being aware of what he is doing in other businesses, I feel, is really important to interpreting what he is planning with HMI. It shows Brian's thought processes of businesses focusing on one project only. As he has also done similar things with HMI it establishes this mode of working as his modus operandi.
Morning all,
This is of relevance to us: https://www.lse.co.uk/rns/JAN/sale-of-93-million-valore-shares-i2khryyd3fkfezs.html