Member Info for TigerByTheTail

Hi Ragnar!
IMO, SLP will first look to "sweat value" out of Volspruit. It's the obvious thing to do. I think we need to give them a few months to work out if their current plan is viable and economic. If it is, that offers the market the growth it values so much. If it isn't, then I'd expect them to spin it out or sell it off, as you suggest.
For what it's worth, I agree with not buying assets at the top of their cycle. I don't want to get into it on this board too much, but IMO JLP have overpaid for their recent purchases, especially the chrome assets.
Other than that, opportunities will surely emerge for those with ready cash as this recession bites harder. There is no better time to be a buyer than when the economy is just emerging from a slump.

I can understand why long term shareholders are upset that the 33p bid wasn't put to a vote. I don't think the BoD acted in shareholder interests; rather they voted to keep their own jobs.
But the question now isn't whether that was right or wrong. It's whether Saga represents good value at 11p per share. Which, IMO, it is.

Hi Ragnar!
Volspruit may well offer low cost growth for SLP, if they do take the route of mining the high grade open pit areas and then producing a concentrate (using their existing technology).
Or they may be looking at buying assets for expansion. They've got the money!

If to take your theory seriously, why didn't De Hann just wait, and save himself £100m?!?
Why did he buy equity in Saga instead of buying its debts?
IMO, your theory makes no sense at all.

I imagine De Hann's motive for buying in was to make money - no more, no less. Did you imagine he put £100m into this company as a charitable act?
And, since he paid about 18p per share for his stake, and we can currently buy at a 30% discount to that, the current SP would seem to offer exceptional value.

Hi Nimrod!
You'd think that a big jump is coming here, either in expectation of the results or as soon as they are published. Just look at the basket price.
I'm guessing that profit for Q1 (FY 2020-2021) should be c. $20m. Annualise that, and SLP seems very cheap. Hopefully, the approaching dividend (ex-div 30/10) will help a bit as well.

Hi Ragnar!
So, currently we could buy JLP, THS, and SLP, AND have about £500m left over, all for the price of one EUA.
AIM is truly, deeply, madly crazy.
Obviously, the ratio of the JLP, SLP, and THS market caps is wrong, and THS should be valued more, but after the comparison with EUA, this seems no more than a clerical oversight.
I still have "trust issues" with JLP. You've just got to be suspicious of any company which has Colin Bird as its Chairman.

That's 100% wrong.
But it's a good pun, so forgiveable.

RNS out - geophysics to pinpoint targets at Marsfontein / Thorny River. Drilling in November.
I think we all know another Marsfontein is out there. Let's hope they hit the jackpot this time!

Large sell (in terms of this share, which trades on very small volumes) of £128K on Friday.
Interesting to see if the share price will now move up...

Hi Mr Tibbles!
Don't overestimate Boris's intelligence. It's actually rather stilted and limited. He's naturally lazy, over-privileged, and completely incurious. Those are hardly the traits of a first class mind.
Boris is also willing to shill for whoever pays him. And to generally say whatever he thinks his audience (be it a woman, the readers of his articles, an after dinner crowd, or the country) want to hear.
He does have a decent turn of phrase, and he does have an impressive memory for light verse, and he wraps up his narcissism in a false bonhomie. But finally he's a pebble rolling round an empty pot. I worked that out thirty years ago.
His natural level is that of a devious hack writing mildly amusing but not very truthful opinion pieces for some right wing news rag. He's just been promoted massively beyond his abilities. Unfortunately, by us!
We'd have done better electing a koala.
Back to gold. I believe we may have stopped consolidating, and we may be due the next wave up in this gold bull market. So I'm also hoping for a good week.

Hi RT003!
The knack here is to pick the companies that are going to survive without significant equity dilution going forwards, and hopefully eventually thrive.
You mentioned other potential Covid turnaround stocks like IAG, EZJ, and TUI. I haven't looked at them, but I did take a look at CINE (Cineworld). Their debt is rated at CCC+ (i.e. default imminent); that's a lot worse than SAGA's rating of B1. For CINE, the only way out (I believe) is a debt for equity swap which will nearly wipe out current shareholders. It also doesn't help that their target market (basically 16-24 year olds) are being hit exceptionally hard by the Covid recession; again in contrast with Saga's much wealthier demographic.
As a newcomer to this stock, can I just ask the board if there are any near term debt timebombs under Saga that I've missed? Or any other threats to the business? As far as I can see, the insurance business is sound, and it should be enough to carry Saga through.

Hi Toneman!
No need for a tin hat, but Covid is slowly being solved. Yes, the virus is still wildly infectious. But the death rate is way down thanks to better treatment knowledge and the use of therapeutics.
And the first wave of vaccines should be coming through the approval process by Christmas.
IMO, it's time to be "looking through" Covid and buying bombed-out stocks which stand a good chance of recovery in the post-pandemic world.
I'm coming at Saga as a new investor, so I do realise it is a lot easier for me to be optimistic than if I were sitting on historic losses.

I can't work out if this is a gold-plated investment opportunity or a value trap. Can anybody help? Am I missing something crucial?
Former CEO Sir Roger has bought a large stake in the firm at a price substantially higher than today's. He presumably did extensive due diligence before risking so much money. I've spoken to a couple of former Saga managers, and they state (emphatically) that he is no fool.
Also, other parties were willing to table a 33p per share offer (pre-dilution) for the company recently.
Saga's debts are rated B1 - not investment grade, but at the higher end of junk. Most companies with debts rated B1 can be expected to survive. The debt burden is heavier than I would like, but it isn't crushing, and I don't believe any large repayments of principal become due in the near future. And the company has plenty of cash on hand after the rights issue.
The insurance business is healthy right now.
Consensus seems to be that Covid vaccines will be approved by the end of November, and they will be administered to Saga's target customers first. It seems reasonable to expect travel and cruises to start up again in spring.
In short, why is the share price so low? Isn't the worst for Saga already past, or nearly so? Shouldn't we be looking forward to the turnaround already?

Just thought I'd post the result of this drill hole from Sanoumale West again.
Canadian mining juniors actually pay good money to advertise results like this on sites like Kitco, so I thought it was worth a re-run.

Shoezone has always been a well-run company and, before Covid, its balance sheet was in excellent shape. Also, most of its leases are short ones.
If Shoezone can't survive Covid, then I'm afraid very few retail chains will. We're looking at abandoned and boarded up High Streets across the land.
There should be a full-year trading update sometime this month - that will be the moment of truth here.

Hi Ragnar!
I guess you're right, and we investors truly are a slothful lot. But even a rapid calculation and comparison of this year's likely revenue against last year's reveals how much better Tharisa are now doing. Yesterday's RNS helpfully provides all the production numbers and average prices needed.
And then if you simply multiply the mid-point of next year's guidance provided by the current chrome and PGM basket prices, it becomes clear that revenue could well grow another 20% or so (with little increase in costs). And, looking out to 2022, you have all the revenue growth that the new Vulcan Plant will provide.
So, like you, I make it that THS is simply mispriced at the moment. I'd go with £1 by Christmas as well, but it maybe that once a rerate gets started, the market will price in not just this year's results, but all the growth prospects for 2021 and beyond, and take this higher.

So how long does it take for the market to realise the mismatch between the actual state of the company and the current share price?
From SLP we know that these mismatches can last for some time. I think THS will rerate just before and after the annual results. Any other predictions?

Hi Bangrak!
The trouble is nothing offers the same combination of qualities as SLP. (We've been through this several times on this board). But I refuse to put all my money in one single stock!
In the race for "second best heavily-undervalued stock" out there Tharisa is a decent competitor. So I'm happy to have money in it as well.

2019 final results disappointed, and the share price dropped sharply, bounced back a bit, and found a level at around 82p.
We now know enough to work out that 2020 final results (due 30/11) are likely to be substantially better, notwithstanding Covid. We also now have positive guidance for next year; better yet.
So why is the share price lower now than it was after the 2019 results came out?
It's just one of those stock market things, I guess. But it doesn't make me a convert to the Efficient Markets Hypothesis!