The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Someone is toying with this share. Look at the share trades – dozens and dozens of sell trades over days, often only amounting to pence at a time, forcing the price down and the spread wider and wider. It's not retail doing it, because the dealing fees would kill whoever tried.
It's always traded very technically, this share, and by that indicator I'd anticipate it will fall to 9p again before its next bounce. If it does, then I expect it will get at least into the 20s. But if it is being manipulated, then how much higher will it be allowed to run? Fundamentally it is worth much, much more. It would be nice if a regulator were to investigate exactly what is going on here, but that is as ever a forlorn hope.
I was a national-newspaper journalist for many years; I suspect Chat GPT has emulated my writing style rather than the obverse. Perhaps a better strategy than to go public myself would be to seek royalties from OpenAI for basing its large-language models on my IP. Seems to have worked for Getty and the AI-image engines...
There was a big piece on Woodsmith in the FT last November. Read it again today. That said the company hopes to get to $380 per tonne (due to the sustainability/organic premium) but that there are issues to achieving that. The other polyhalite producers in Boulby said they are lucky to get to $260 for their product because there's no market for it.
BUT, they are producing in limited quantities and AAL (and SXX previously) have signed a number of quite hefty offtake agreements. Quoting from that piece in the FT, BHP's CCO, Vandita Pant, said: "Crop production went up 50 per cent since 2000 and farmed land has only gone up 3 per cent [per capita]. To meet another 35 per cent increase [by 2050], we need to increase productivity even further. The key becomes crop yields.”
In that piece the FT described BHP as "another mining company that has entered the fertiliser business." So you sense BHP considers Woodsmith a hugely attractive feature to AAL's portfolio. And that's before you even get to the copper.
In essence, AAL (or whoever takes it over) must create that missing market for polyhalite, almost from scratch. But if they do then analysts have estimated the mine value at £13 billion (more than a third of current market cap) but if they fail to achieve that, then it is estimated to be worth c£1bn. So this is not a share without a fair dollop of risk - but the fact the world's biggest miner is prepared to take that risk is hugely encouraging to me...
Wise move, because that price was preposterous. I'm content with the size of my holding and won't add more but I haven't been shaken by recent prices either - this is a long-term hold for me. I also think you're right about China, Norfolkian. Speak to any market commentator with geopolitical insight and they say China is uninvestable. The friendshoring/nearshoring/onshoring paradigm has created an exodus of good companies out of China. Not least because China's intrusive recent Counter-Espionage Law essentially risks making criminals of all foreign nationals there. It's lunacy to continue operating from that part of the world because it is entirely incompatible with good corporate governance - reporting on what goes on in your Chinese factories/outlets has now effectively become a criminal offence!
Although light on details, we can read between the lines of that Trading Statement. On 20th January last year I posted the following on this board:
"...There could be a tremendous amount of growth around the corner for Carclo with just a little bit of a pivot in what it does. Carclo has been active in the aerospace sector for 100 years. Its specialism there is, inter alia, applying technical plastics to electronic components and aerofoil blading.
"Now consider this. The war in Ukraine has demonstrated one thing more than any other: the value of drones. Small, cheap drones and thousands of them. Currently these are sourced from China, which is hardly a reliable partner in a major defence-procurement exercise.
"I would guess that, through a tweak of its existing capabilities, Carclo could quickly be in a position to deliver cheaply mass-produced, British-made drones to the MoD and other NATO partners, whether directly or as commissioned by a major defence contractor.
"I am a humble retail investor with no inside knowledge whatsoever, but if management are not actively exploring this potential already, then they are letting shareholders down."
Now maybe I'm getting overexcited, but I see something in this when Carclo say in the Trading Statement: "The growth of our Aerospace division is sustained by our focus on specialist precision solutions that elevate our competitive position... Our advanced precision technology capitalizes on emerging opportunities in revitalizing markets, while easing supply chain constraints boosts our progress.
"Looking ahead, we are planning investments to diversify our product range at both operational sites. This initiative is designed to capitalise on evolving market dynamics within the aerospace industry, ensuring that Carclo stays at the forefront of technological advancements and market demand."
The fact that they have not explicitly said what these "evolving market dynamics" and "market demand" are does not dissuade me. In fact, this oblique reference reinforces my notion that this is to satisfy the enormous future military demand for drones. Because to openly state that Carclo is at the forefront of drone technology would be folly in the extreme, not least because it would make military targets of Carclo facilities in the event of a future war.
But this is very, very exciting to me. If I am right, then the £30m debt pile will be incidental. I believe that addressing this market (alongside Carclo's other interests, which similarly serve future market trends, e.g. the demongraphically driven medical sector) would see this share explode into the three figures in due course. I'm certainly holding up to 200p and beyond.
strongly agree with you, @porter_.
1. a few points to add: undersea cables are being laid at an exponential rate by tech titans seeking proprietary internet infrastructure.
2. ‘russia’ (the inverted commas are because the kremlin denies it, just as they denied the troop build-up on the ukraine border 🙄)m is chopping up cables wherever it thinks it can get away with it.
3. the uk royal navy and raf have recently invested in coastal-patrol capabilities to protect the digital and energy infrastructure that serve our island. installation and maintenance of that infrastructure is the domain of the private sector.
4. despite having to reduce the returns to energy co.s at auction, the uk continues to invest heavily in offshore-wind capacity.
these factors mitigate in favour of either a.) a tech titan, b.) the mod or govt or c.) a big yield-hunting investor either i.) providing massive maintenance contracts, or ii.) launching a takeover bud.
so solid are the fundamentals that porter_ has already set out below (for which reason i shan’t rehe**** them here) and so clear is the chart, that i would personally vote against anything less than 116p for my shares. this little gem is that good.
This is beginning to look very exciting. We have here that heady ****tail of value and growth. *Rubs hands in glee.* Someone has had a sell order at 14p for a very long time. But at 11.30am on Wednesday someone else put in a sizeable buy of perhaps 200,000 shares and more that filled the last of that sell order. We spiked above 14p for the first time this year.
It was the latest of a few lumpy buys that have been dropped in this month: https://finance.yahoo.com/quote/CAR.L/history/
If we can close the week and then the month at or above 14, then it could be very propitious for the technical picture of this share. A short squeeze could well be under way. It’s early days in the process - this is a multiyear play based on Carclo’s presence in some key growth markets - but I see a volcano rumbling here. This share is on a 4.5x earnings multiple for goodness’ sake!
Some interesting news to digest:
https://www.marketwatch.com/press-release/led-secondary-optic-market-booming-with-rising-demands-and-massive-opportunities-2023---2028-2023-02-22
(This one doesn’t mention Carclo by name but it is a player in the double-shot moulding market.)
https://www.marketwatch.com/press-release/2-shot-injection-molding-market-industry-analysis-database-for-period-from-2023-2028-2023-02-12
GLA and DYOR!
Pressure is building… The bid is 12.5p and the ask 17p. That’s a 26% spread. The price suppression feels to me again to be part of the technical picture. Carclo, as of next Wednesday, will not only be above the trendline on the weekly chart but also above the monthly. This is potentially huge. And the buying pressure reflected in the ask price is to me a very strong indicator that we are sitting on a volcano that is about to explode.
BUT DYOR and GLA
Hi all. New here. Long-time lurker, first-time poster. This is an exciting juncture for Carclo and several other businesses I’ve been watching that have taken a big hit in recent times (PHE and TGP on the LSE and NANO on the TSX). But it’s Carclo I find most compelling of a very interesting bunch.
The share hit a high (a classic double top) in January 2013 and went on a dramatic slide. When that downtrend was broken, in December 2014 and at about 90p, it went on to double over the next 30 months to about 180p, before resuming its downtrend. That slide that commenced in June 2017 has endured five-and-a-half years. It hit peaks in May and November 2021 and September 2022, without ever breaking out.
Yet next week, just by dint of time, (barring a calamity in price today) the share looks like opening above the trendline on the weekly chart for the first time across those 67 months. That is quite important, and the share - which has provably traded very technically - looks like it is making a bit of a move today.
It would take nothing to double in price (to where I initially invested with my SIPP and family funds) and that is why I have bought again today.
Still more intriguingly, though, are the Fibonacci levels in this recent downtrend. A retracement to the 50% Fib would take it to 91p, tantalisingly close to the several equal highs at 94p, and to the ICT fair-value gap to the swing low at 101p.
I consider these modest targets. In the longer term, the swing low at 316p should also be achievable.
The reason I think this is that there could be a tremendous amount of growth around the corner for Carclo with just a little bit of a pivot in what it does. Carclo has been active in the aerospace sector for 100 years. Its specialism there is, inter alia, applying technical plastics to electronic components and aerofoil blading.
Now consider this. The war in Ukraine has demonstrated one thing more than any other: the value of drones. Small, cheap drones and thousands of them. Currently these are sourced from China, which is hardly a reliable partner in a major defence-procurement exercise.
I would guess that, through a tweak of its existing capabilities, Carclo could quickly be in a position to deliver cheaply mass-produced, British-made drones to the MoD and other NATO partners, whether directly or as commissioned by a major defence contractor.
I am a humble retail investor with no inside knowledge whatsoever, but if management are not actively exploring this potential already, then they are letting shareholders down.
If they are, however, then the possibilities for Carclo are tremendous, and a 2000+ percent increase in the market cap (to c£200m) could be eminently achievable. In that event, the current fears over gearing and the pension deficit would become a negligible sideshow.
This is, to my mind, one of the most undervalued shares on the market.
BUT: DYOR and GLA.
Cheers,
?Testudo
Hi all. New here. Long-time lurker, first-time poster. This is an exciting juncture for Carclo and several other businesses I’ve been watching that have taken a big hit in recent times (PHE and TGP on the LSE and NANO on the TSX). But it’s Carclo I find most compelling of a very interesting bunch.
The share hit a high (a classic double top) in January 2013 and went on a dramatic slide. When that downtrend was broken, in December 2014 and at about 90p, it went on to double over the next 30 months to about 180p, before resuming its downtrend. That slide that commenced in June 2017 has endured five-and-a-half years. It hit peaks in May and November 2021 and September 2022, without ever breaking out.
Yet next week, just by dint of time, (barring a calamity in price today) the share looks like opening above the trendline on the weekly chart for the first time across those 67 months. That is quite important, and the share - which has provably traded very technically - looks like it is making a bit of a move today.
It would take nothing to double in price (to where I initially invested with my SIPP and family funds) and that is why I have bought again today.
Still more intriguingly, though, are the Fibonacci levels in this recent downtrend. A retracement to the 50% Fib would take it to 91p, tantalisingly close to the several equal highs at 94p, and to the ICT fair-value gap to the swing low at 101p.
I consider these modest targets. In the longer term, the swing low at 316p should also be achievable.
The reason I think this is that there could be a tremendous amount of growth around the corner for Carclo with just a little bit of a pivot in what it does. Carclo has been active in the aerospace sector for 100 years. Its specialism there is, inter alia, applying technical plastics to electronic components and aerofoil blading.
Now consider this. The war in Ukraine has demonstrated one thing more than any other: the value of drones. Small, cheap drones and thousands of them. Currently these are sourced from China, which is hardly a reliable partner in a major defence-procurement exercise.
I would guess that, through a tweak of its existing capabilities, Carclo could quickly be in a position to deliver cheaply mass-produced, British-made drones to the MoD and other NATO partners, whether directly or as commissioned by a major defence contractor.
I am a humble retail investor with no inside knowledge whatsoever, but if management are not actively exploring this potential already, then they are letting shareholders down.
If they are, however, then the possibilities for Carclo are tremendous, and a 2000+ percent increase in the market cap (to c£200m) could be eminently achievable. In that event, the current fears over gearing and the pension deficit would become a negligible sideshow.
This is, to my mind, one of the most undervalued shares on the market.
BUT: DYOR and GLA.
Cheers,
?Testudo