Episode 14 has dropped: Investing Matters Podcast, Tim Rogers, the former CEO of AB Dynamics. Listen here.
Just goes to show that you don’t have to dip into the micro caps of AIM to find undervalued stocks! No reason why this can’t head back towards 500p as they must be making a fortune from this volatility!
I note the shake early doors probably to grab 290 stops and then we close at the highs!
Still an 8% yield on offer, well covered and a share buy back underway.
Makes you wonder how the market misses these at times!
There ya go 7’s now to sell. Timing is everything in this game but also impossible! Lol!
Anyways on our way back up now after a nice nudge by our CEO. For me the honesty about the confusion was the most important message. Lessons learnt. Put it right move on and bring the SP with you! That’s what the market likes.
Enjoy the sunshine all!
In my humble two ways of playing it.
1. Whatever you can afford to loose buy and forget. Sub .5p is a great price.
2. Average in to a position and average out on the run up to drill. The overhang should clear next week. Then just leave your punt money in. You may even be able to sell half on a double and get a free carry. There’s just lots of stock to clear atm.
As for the SP. It depends what they find but this drill won’t imo identify +11TCF or even 7 TCF of gas. It’s an expo drill any economic find I will be a great result. The well will then be plugged and abandoned.
A find should see the SP well north of 1.5p. They only have 10% of the well but their mcap is only 10m. The well cost £25m.
If they prove up 4 TCF then wow the SP will be huge but that is an unknown and a long way to go. But it’s an excellent risk reward 1 in 3 CoS and on a producing fairway, of the 17 previous drills 15 are active discoveries! Importantly there is a seal already proven.
If they go one to prove +7 TCF then you are looking at a SP of well over £100m! That’s a ten bagger min.
It does happen. Look at ARB went from 4p to 300p. I valued it at 100p when the SP was 4.3p. Folk thought I was mad but they had the revenue and the glidepath to prove it. The market just missed it. But now see how it’s come back and has basically been revalued as a BTC hedge.
He1. Lol the metrics added up to £5 if they found commercial helium. They haven’t yet but it was still a multi-bagger for those that derisked ahead of results. Same principles apply to CLON.
Always best to take profits on the way no matter how good the odds imo as this is a jungle where few survive.
Anyways this may help your decision…
Good luck with your investments
Better interview. Well I voted with 2x500k buys. Kinda figured this was the last chance to get my average down. With the chart turning there will likely be a chance to sell some on the way up if I so choose.
I think the 7’s will be here by close and we will head back to 1p resistance once the results are out.
For sure things are really happening on the ground and they have a monthly target driven plan. That’s stuff I can associate with.
Yes that is correct it is SOFR in US and SONIA in UK for RFR’s (risk free rates). EURIBOR and EONIA will be replaced by ESTR in the Eurozone by the end of the year.
I thought it may be more confusing so used the old terms for illustration. It’s basically a fixed rate plus a hedge to protect the investor from wild swings in rates over and above the coupon. They may or may not even have a RFR.
The main point is if they pull of debt base financing this SP will literally be history!
But worth pointing out and I would guess it’s unusual for an ‘investment banker’ to buy a minnow mining stock! Lol!
As a tax it is also based on profits so that takes many minnows out of the equation that are still offsetting tax against investments or decommissioning so may not be paying any tax yet.
A pretty myopic process imo. Perhaps they should tax insurers that paid out so little during covid and are now buying back their company shares!
Instead of short term tax the government should imo have a long term sovereign wealth fund that they generate income from for the country. That could have been funded by QE rather than buying junk bonds which just filtered through to more share buybacks.
An arms length investment of £trillions into quality companies to fund pensions and infrastructure spend. An inheritance for generations to come instead of expecting the youngsters to pay for our short term squanderings!
Unfortunately that means a strategy beyond the next election!
Just on the bonds. As it stands the intention is they will pay a coupon of interest or NSR royalty whichever is higher.
They will be tradeable and have a 10 year maturity.
So after 10 years the company will buy them back at face value. I would hope that they have a call provision if there is a LIBOR element to the coupon to protect the company should rates go up or the NSR is so high that it makes it worthwhile to recover the bonds.
The bonds will likely trade at a face value discount until maturity depending on the rate of return. The interest will likely be biannual. It’s normal for them to trade at a discount which tends to reduce the closer they get to maturity.
So a $1000 bond may attract a fixed rate of return of 10% + LIBOR or NSR + LIBOR paid twice yearly.
The bonds may then trade at $990 - $1010 depending on market conditions and company prospects. The market will attribute a rating from AAA to junk.
At the end of 10 years the company will buy the bonds back.
If there is a call provision then company may be entitled to buy the bonds back earlier at a premium of say one years interest for each bond.
It really is a straightforward system but the value of the bond is predicated by the value of the asset and the likelihood that the company can meet its payments.
The fact that PXC are confident that they can go down this route differentiates them from the amount of junk investments out there. Many other company’s have no alternative other than to issue dilutive equity with a warrant bonus because their assets are so risky that they cannot raise debt in the market.
I am completely perplexed why so many ramping posters on the many other BB’s can not see through the quality of PXC’s financial proposals.
IF they get a debt finance package together it will set this company ‘light years’ apart from others in terms of market valuation and perception with only 130m shares fully diluted. Yes million NOT billions!
A huge vote of confidence could land at any time this year for this company. You can then kiss goodbye to even 80p a share imo as you will have an independent market vote of confidence akin to someone stepping in and buying say $10m of PXC stock!
I think folk forget this is only a 404m mcap company! It’s like the expectations are for a FTSE250 such is its brand and divi!!!!
No 424 on the list
Tucking these away, imo there will be a fintech buyout!
In the meantime happy to take the quarterly divi!
Good timing purple.
Every time this has dipped in the last year it’s gone on to rise significantly.
However, it has then fallen back as news didn’t underwrite momentum.
Imo this time is different for no other reason than the time past has taken us closer to transformational news.
Likewise I believe the bod will deliver. That’s what the signs are.
If we have the permits, finance and ops updates as intimated then the SP will likely mean all will be well into the blue!
It’s an IF but the odds look exceptional!
I urge potential investors to read the last years RNS’s and last corp ppt.
It’s a rare gem this one and yet so overlooked!
Yes I know. That just means more stringent company regulatory compliance in terms of reporting.
Nothing to do with liquidity. It’s actually traded on SETSqx. Normally for less liquid stocks.
‘A riddle wrapped in a mystery inside an enigma!’
ATM can get a quote to sell 3m max on ii at .65 and could buy at .67.
Amazing liquidity for a stock this size!
Still no TR1’s, so someone may be being naughty. Which does happen.
(I reported Acacia to the MAR for blatantly selling (SNG) without notice and the MAR said they would send them some educational material! I reported them twice more after for different companies and the MAR said they don’t comment on individual examples!
So yes it does happen and it isn’t enforced although the TR1’s did eventually come through. Imo the MAR couldn't care less if a PI looses money while an insti makes it! All part of ‘regulation!’)
Or one can assume this is having the arse traded off of it but for the most part the spreads are a deterrent although that said I have managed to sell some and buy back cheaper but days after selling a small percentage not the same day or within a day.
Probably a combination of both brought about by the confusion in the comms consequently dividing opinions and likely even resulting in -20% down folk selling.
Seems to me that whenever RM tries to address it more confusing evolves and more selling!
I hope the next interview and newsflow clears up some of this and clarifies the objectives with more ‘how’ not just ‘what and when’.
I am still convinced this will turnaround. There are some very knowledgeable posters here who’s data I have validated and think this is just teething problems.
The mcap is getting so disconnected now. I have set another buy target having sliced elsewhere.
Very interested to see what’s next. Fingers crossed emoji!!
Good luck with your investments
Noted. Market just took the divi off of 4p.
Built myself a little excel to factor in the changes. Could be a well timed ‘9 dart finish’ here to make a few bob ahead of closure.
Those that follow the story will understand what I am saying.
Well at least that’s confirmation that it doesn’t seem to be anything ‘sinister’, in terms of a dump!
Yesterday’s large trades took UBS below threshold. They were likely all their sells (2x 150k and 1 x 157k) else if the later trade was a buy as it was at a higher SP it would not have resulted in a crossing.
So I can only assume UBS are moving stock on to another account/recipients/nominees etc.
All normal ‘abnormal’ behaviour if trying to build a position in a relatively illiquid stock. I saw similar trades at HZD and LID before a bid came in.
That’s NOT to say I am right in terms of a bid coming. Could be another reason.
I am just buying shares here so I am biased and as there are only a handful of posters here and no volume it will likely take ages to grab any meaningful numbers of shares here so I wouldn’t expect anything quick.
I also noticed how GLO share price was being held back with huge numbers of single trades followed by odd high UT trades end of day. I posted it there. Then look what followed!
DYOR and …..
Significant usual caveats!
Really low volume so far today on results day. Don’t get that at all. Perhaps the City folk need permission to buy or are still running their slide rules as the numbers are I believe much better than the market was leaning towards.
Still gives us PI’s a chance to top up before SP does it’s usual lag and catch up!
For those that find the divi confusing PAY pay two interims and two finals. Sometime more. So the 18p is a final split July and Sept, 9p each. If the next interims follow the same. I.e no increase (unlikely) that will be an additional 18p split 9p in March and 9p in December.
Those are the payment dates which of course can change so assume 36p per year in 4 instalments. That gives a quarterly yield of 6.16% at 584p.
The policy is to hold the divi with 1.2 to 1.5x cover.
It’s currently higher due to cash from disposals - cash £67.9m / (2x £12.4m divi, assuming next interim is same as this final) = 2.74 x dividend cover.
Could be further acquisitions or another special divi to get back to 1.5x cover 67.9-(1.5x24.8) = 30.2m surplus cash. Not as simple as that but shows there is scope.
This may help…. Not updated yet but you will get the gist…
My macro comments refer to rates, Ukrainian war, energy costs and supply constraints as opposed the lower level consequence of increased cash use for some to manage budgets which has resulted in a higher ‘till’ service take up.
Great set of results with beats across the board. Cash in from disposals and divi up quite substantially.
Obvious macro headwinds which are same for all.
I am a bit confused with the regulatory comments. I take it OFGEM have accepted the commitments as closure. If so great result. For some reason I thought we were awaiting final letter but hey, easy to miss.
Anyways I will be adding. Having lost future income with the takeover of GLO (8.55% forward yield paid quarterly, 2.5x covered with cash) this is an obvious candidate to make up some shortfall. Whilst it doesn’t have the same divi cover it offers higher growth.
Predicting SP’s usually results in egg on one’s face at the same time we don’t buy shares unless we think they are going to go up! I now think we will gradually head above 6 as these results are absorbed.
Let’s hope it’s not omelette for breakfast and an embarrassed Trek!