Member Info for TheClive

Managed to buy 1k shares. When I requested quotes only got firm offer 25% of time. Left limit order in the end which got filled. I'm with iWeb/Halifax.

LTH here. Agree that the move down in recent weeks seems overdone, but in the last few months I'd thought myself that in a rising interest rate environment this should re-price lower, when it didn't happen rather than sell out and move on I thought I'd missed something fundamental - market was right and I was wrong, two weeks later we've adjusted (too much IMHO) and now rather than selling I'm thinking of doubling up.

Really torn on what's right here, it's a good long term hold but near term the price action looks horrific. The assets and cashflows seem solid so at sub £2 I think it looks cheap, but at £2.40+ it looks expensive. NAV is a someone's opinion of what the assets are worth, clearly if some assets are financed (they are) then the cost of funding them affects the NAV in a way that doesn't seem reflected in the NAV calculations on some sites, so I take them with a massive pinch of salt.

Obviously do your own research, have added a little today sub£2, could see it at 150-170 for sure but like to think this is a value play if you have the patience.

Are you talking about for reinvestment?
Dividend of 12.2p per share was paid on 28th April.
Normally it will be reinvested into new shares on the payment date, usually as it is a large block it will often be done in lots of trades and averaged over the course of the day as it could be large numbers of shares to be purchased.
You should then be notified how many new shares are in your account shortly afterwards.

If your question is different, I'm not sure exactly what you are asking, please be more specific.

I've been on the TGA ride for several months and have taken some profit. I was buying around COP26 when I figured they would talk hard on coal but do little in terms of actual impact.
I've taken out basically the notional value of my initial investments and still have a holding worth around 50% more at current SP. The difference being that when I was getting in, even pre-Ukraine war I thought the company was valued and 20-40% of what seemed reasonable, now it's more like 50-75% so whilst I still hold it and see significant upside I am looking for other opportunities as well.

Nice analysis pop31, one caveat I would add though is that I'm not sure you can just use a 10x Dividend share price.
In an ongoing business with long term timeframe (let's compare with say tobacco) then would agree that's fair enough, but the coal mines have limited supply of coal which may reduce supply over the 10-20yr time horizon and various environmental commitments may reduce demand over a similar time.

You may have coal demand and usage at similar to say 2019 levels in 20 years time of course which gives upside, but you can also see a scenario where the company has virtually no value in 30 because coal use is banned across much of the world and political/economic pressure means every major economy follows suit (*cough* China). Their coal supplies are also finite. So in that scenario you are not only looking for an ongoing return, but also a repayment of principal over say 20yrs.

You can think of it as like the difference between the payments on an interest only mortgage vs a repayment mortgage.

If you are coming up with a model for value, you could come up with valuation for each scenario, assign a probability of each one and multiply together for expected value. Then you have probabilities of regulatory outcomes as inputs to your model as well!

I have a general rule to take profit on 50% of my stake if I see 20% profit.
My focus (like yours) is to generate capital growth and income over the medium to long term, but short term gains in price are often just short term. Obviously if they've just released fantastic results and that's why SP is up that's different. Often I have 10-20 companies on my 'watchlist' I'm looking to invest in at some point, usually I reckon if one's gone up 20%+ quickly it's gone from 'too cheap' to 'fair value' or from the latter to 'slightly expensive' and so there's probably better value looking elsewhere. Sometimes after I've sold, a couple of months later it's back 20% lower again and I'll buy back in.

"3. The majority of evraz's assets are in Russia"
This isn't true - Russia only accounted for about 30% of it's revenues last year.
They own a steel plant in the US worth a huge amount as well as assets in Canada, Italy, Chechia etc.

So yeah the Russian assets could be seized - but from £6 a share to £1 a share that was arguably 100% priced in.

To me the biggest problem right now is that any takeover or buying of assets based outside of Russia would be subject to shareholder approval, if RA and his mates who own >>50% of the company don't want to sell to say a US steel company because the $$ they received would be immediately seized, then it doesn't happen. Not sure how independent the BoD is and whether they would make decisions like this to get 'shareholder value' for some shareholders, but not for the biggest ones.

Looks and smells very much like suspension to me.... either that or a very long auction.

I mean he owns shares in Apple, Berkshire Hathaway, Microsoft Tesla etc etc. RA sanctioned does not = EVR gets suspended.
But there is a key difference, as a significant shareholder (>25%) they may decide that although he's not on the board of directors, he still has significant control (/influence) on decision making in company. The fact some people are alluding to the fact that dividend was cancelled partly because of potential for RA to be sanctioned: if that was true it shows company makes decisions based on his influence.

So for me this increases chance of suspension from say 5% to 15-20% but company has the MAJORITY of it's assets/revenues/staff outside of Russia, so I would see a way forward even so, and a way out of suspension which is more problematic for companies like POLY where basically their operations are almost all within Russia.

I do think we will see a dip towards 60-70p range though on fear as well as disappointed dividend hunters.

I think this will hurt the SP in the short term, but then I wasn't expecting a 38p drop tomorrow either.
Even after tomorrow I viewed the probability of actually receiving the dividend at around 85%, a lot could change between 10March and 30March. But still a bird (or 38p) in the hand is worth more than one in the bush, yes as a shareholder you own a piece of the cash sitting on their balance sheet, but there is a non-zero probability something between now and any future dividend payments that something happens to make the company worth a lot less e.g. delisting on LSE and relisting on MOEX - which may be preferable for RA and the other big Russian shareholders as less chance the UK government/regulator can seize the shares or dividend payments.

I was always planning on taking the dividend and holding the shares, hoping/expecting some recovery to at least £2-3 which would be a 250-400% return for me, so in some ways I am not so bothered about a short term blip, but I still think that there is now less reason to hold for many people who bought this for dividend yield, which suddenly doesn't look good when the future dividend flow is now a LOT less certain.

Yes company is still prob worth £2-3, and am looking for that kind of valuation (or higher) by end 2022, but I expect this to trade to around 70p tomorrow, but I will happily add on that dip if it does come. Yes it could go to £4+ and obviously I hope it will, but to me that kind of valuation requires no sanctions with Russia, which is possible but there are plenty of outcomes this year which don't end up in that situation.

Who is selling?
Combination of institutional investors who either want out because holding Russian assets might hurt their brand, or because it’s gone below their internal stop loss level. Also will have been in some ‘Russian’ themed funds, which are essentially being liquidated.
Also would suspect hedge funds shorting on back of possible delisting or pre-empting RA selling some of his stake (as he is with other UK assets).

Any shorts will not want to hold when it goes ex-div.

Given the dividend is not 100% certain even after Thursday’s open, I wouldn’t expect this to drop by exactly 37/38p *but* a lot of holders / value hunters will have a lot less reason to hold as next dividend is a long way off. So I expect fewer buyers and more sellers at end of this week so price may fall by more than the dividend anyway. It spent enough time below say 70p last week when buying it meant a potential 50% cash payment, there are much less compelling reasons to buy it next week at 70p (assuming war situation is broadly the same).

Still like the long term value myself but will be a choppy ride the next few weeks/months. Of course on any deescalation of the UKR situation this should fly.

DIVIDENT noun.
Impact on your hedge fund's PnL or personal net worth from shorting a stock with dividend yield of over 40% when it goes ex-dividend.

Ummm that's not how it works. For example when various firms cancelled dividends *after* they went ex-dividend during Covid, i.e. share price abc with dividend 10p went down by 10p when it went ex-div, there was no recompense to those who bought before and sold after. The dividend was cancelled, so the assets of the company went up (in effect) and only those who still held shares benefitted.

Someone who owned abc before dividend, and who sold immediately after for a 10p loss, didn't get 10p or anything in lieu of cancelled dividend. Those who bought after it went ex-div basically benefitted but that's what actually happened in the last two years. Those who were holders earlier but are not now won't get anything in lieu of any cancelled demerger.

Sorry my bad totally right is ~400mio shares.
Even so - volumes traded means he hasn't sold even half. And of course we would get RNS on a T+1 basis if his holding changes by much.

Looking at quoted ownership amounts that Abramovic holds - it's of the order of 900mio shares.
Total volume traded yesterday was around 50mio and that was highest for a few weeks.
Even if you are selling in a fire sale on exchange, you will struggle to be >50% of volume as a lot is market makers and algos, to be honest 50% may even be a push. But even so, and even if he'd been selling @ 50% of volume per day for 2 weeks (plenty of days have been less than 10mio volume) he wouldn't have even sold a quarter of his holding.
If he had (by some miracle) been every sell on the exchange for 2 weeks, he wouldn't be near half done.

The reality is that this kind of size of holding would be offered around to institutional investors (Blackrock etc) who would be able to take a decision to invest $100mio+ in a big chunk - maybe split between a few institutions, and would be at a discount to share price. Right now he'd probably have to sell for less than the dividend... which is why I think they will pay the dividend, but then we may see a placement of the rest, best outcome for the man who owns ~30% who clearly has some clout on decision making.

No it's not. A secondary listing means it's listed/traded on more than one exchange. They are talking about companies listed on *Russian* exchanges and *also* on LSE, eg Gazprom, Sberbank, VTB etc.

Evraz is not listed in Russia, it is *only* listed in UK on the LSE.

Not sure I buy this - sure a Russian citizen (/oligarch) owns a chunk, but it's listed in London (and only London) and loads of non-Russians own bits of it. That's like saying any company with >1 share owned by any Russian citizen has sanctions - sorry that's probably close to 99.9 companies in the world listed on any public exchange.

Total (the oil company) only yesterday said they are not selling their Russian assets, will they have sanctions on all the oil companies too?

I get that this is slightly different with such a large chunk owned by a prominent Russian Oligarch but it's a publicly listed FTSE100 (for now) company, I'm sorry they won't introduce sanctions on them. This is just completely uneducated speculation.

At a (massive) push they may say that they would have to be in process of disposing of any Russian assets (like Shell/BP have said) or face sanctions, but they would have to apply that to every company equally.

Anyhow - what if Roman has been selling his stake - if he now owns less than 5% do they sanction them still??? I mean it's pretty likely the reason the SP is being hammered is exactly this.

In a normal market, the value of the company (market capitalisation) is number of shares x share price. Simple valuation of the company. Some assets are cash, there will be debt, assets, future cashflows etc. A lot of people will talk about 'book value' of a company, kind of the asset stripped value, sell of things, but hard to quantify that, as if you are forced to sell, you usually don't get the market price for it.

Anyway when companies pay dividends, clearly the cash portion of their assets goes down by that amount, so in theory the value of the company goes down by same amount, market cap reduced etc so in simple terms without any other information or change in sentiment the share price should drop by divi amount when it goes ex-dividend.

Clearly in this case, the value of the company will not be zero after div is paid, but as many have pointed out (including myself but good luck finding in the 000's of comments!) there is no guarantee the div will be paid, and even after it goes ex-div they can still change their minds and not pay it. So in this case clearly the price will not drop by 37p next week *because of the dividend*. In fact if they make statements confirming the dividend payment, and say the money is not in Russia etc. then I think the share price would go *up* not down.

The value of the company as it stands is >> the market cap right now, but the future is uncertain. There is non-zero probability that the company will be worth zero at some point soon, so a better way to think about the share price right now is an expression of the probability that it will be worth zero, some people will say that if it delists this is the same thing (may be true, may be not, arguments for both). There is clearly a non-zero probability of dividend not being paid as well.

Either way it's unlikely to fall by 37p when it goes ex-div (since even then we probably won't be sure that it will be paid) and a share price will almost never trade at zero, even a bankrupt company has some value: if you can buy it for £1 and offset losses against profits in another company you save £££ in tax, so it still has non-zero value.

I'd look at the value of the company as some combination of [value of non-Russian assets] + [value of Russian assets] + [dividend payment due March] with each of those things multiplied by a probability of whether you think they will be still there in the company at some point in the future/or in case of dividend actually be paid; also multiplied by an adjustment to valuations based on the fact the world has changed.

Two final points, valuations based on EBITDA / figures from last year - great but the way the company generates cash / operates in 2022/23 will be totally different than in 2021 dues to situation in Russia/sanctions/economic impact of this war. I'd be downgrading the non-Russian bits by 20% and the Russian/Ukrainian bits by 90% right now. Also IR will of course say the dividend will be paid, the BOD may decide d

I'm with Warren Buffett on this one: being greedy when others are being fearful, and fearful when others are being greedy.

IMHO there are 3 risks for this stock right now.
1. Delisting to Moscow - yes it doesn't make sense from a company perspective in theory, but the owners of 66% of the company might decide shares held in UK could be seized, shares on MOEX safer. I think any forced delisting will be long down the road, again a rational western company might be forced to give away Russian parts of the company and keep operations in US, Canada, Italy, Czecha etc. To me this is largest risk.
2. Abramovich (and others?) sell their significant stakes and take cash offshore rather than leave a shareholding that could be seized/frozen. Massive selling of 1/3 to 2/3 of the company (maybe this is happening now in small chunks?) there is talk Abramovich is selling his properties in London and Chelsea FC.
3. Dividend doesn't get paid / delayed. If you are holding this stock because you will receive big future cashflows, and the cashflow tap is turned off - uncertainty means value may be much lower.

1+2 hard to quantify, in theory still mean fundamentally company is worth way more than current SP, but a company listed in Moscow might not be possible to hold. 3. We will be able to observe, a lot of fear may be about future cashflows and if/when dividend gets paid, far from the SP dropping, it may give confidence in future cashflows. Given timing of dividend it is pretty certain IMHO they would have already moved the cash out of Russia to pay this, so sanctions are not the issue, but company can still decide not to pay it - happened after companies went ex-div during Covid times.