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Tommy,

We should be valued at over £1 now; show me a metric and I will show you a valuation. But what I say doesn’t matter. It’s what Mr Market says that counts. ARB has suffered from a trading pattern agnostic to reality. It has ignored the P&L and NPV in favour of trading bias.

I can’t change that. But wha5 I can do is find value and trade it. There are lots of similar stocks. Some kick in like ARB others take time. But it’s fun! ARB is flourishing now! Enjoy!

Trek

£1

Alwaysone,

I’m down 40% here but up considerably for 2020. Not by any means rubbing salt. That’s not me, lots of it is luck!

Some of my rules apart from DYOR is to cut losses and ride winners unless there are exceptions. Also know the BoD & finances inside out and don’t ‘trust’ any of them!

ARB was such an exception it was hard work trading and then it stuck in a range but now look at how quick it turned and I am up 655% on what I left in having taken several bags out!

TXP up 620% having also taken several bags out and now I have a considerable free carry. So it can be done! I would buy more TXP because they found stuff and it’s not been reflected in the SP. Simple.

I just sold DDDD having made over 500% on it! But yes I may be back. ECR I bought recently and am 80% up. There are others.

Also losses though. Down slightly on TTG, GSK & GRL. Got a free carry on AVCT & BPC but down on my reinvestments. I could go on. It’s hard work ‘staying ahead’ of the game and that’s not even mentioning some good trades like OXB or steady eddies like ONC, GGP, ORPH, D4T4 etc.

It’s taken years to get to a point where one has a formula to follow and it can vary per share. I learnt the hard way by nearly getting wiped out on XEL!

I say per share because they all vary having learnt that by spreading risk. Normally if it’s a resource stock like TXP or GGP that find stuff. You can invest ahead, sell before news and sell into good news then let an amount ride. You get the gist it’s about risk management. Protect one’s capital at all costs. Leave a bit in, bank a bit of profit.

You can by all means hold and hug. Some stocks deliver like that. Like ONC or ORPH, incremental news. Financed, regular deals. Moves slightly then leaps, pulls back then recovers etc.

Others like SNG you gotta try and second guess when they will raise. You are basically buying into an idea that always needs funding but may be the one! It often comes down to luck. Riding a wave but getting out when you think it’s run it’s course then buy back. Gosh did I get stick selling AVCT at £1.97 from 60p then I bought back after the placing. I wasn’t ramping or deramping just calling it as I saw it and got lucky.

You gotta challenge the BoD and be aware of the financial structure. On ECR I spent a whole afternoon going through all the warrants, building an excel. The conversions, what’s outstanding. I went back through 3 years of RNS’s. I found issues but they were within my tolerance, just. But now I know the pivot points and if I have a decent cushion I will ride them. If not I may top slice with a view to buying back in or finding another target.

I actually worked harder this time on ECR as I didn’t do a good enough job here! A while back I posted about 4 pages of my research but I didn’t expect the issuance of stock at the same time. It’s not all being sold but lesson learnt.

Atm the postcode & cash here is a good reason to stay.

Trek

Guys,

Refer to the 13th Aug 2020 RNS...

“Placing raising £1.5 million, before expenses, through the issue of up to 1,500,000 zero coupon convertible loan notes ("CLNs") with a conversion price of 2.3p per Ordinary Share, with new and existing investors. The CLNs have a one year maturity;

· The CLNs are convertible into Ordinary Shares, at the election of the Company, on the Company publishing a new prospectus in order to allow the Ordinary Shares into which the CLNs convert, to be admitted to the standard segment of the Official List of the FCA and to trading on the London Stock Exchange plc (the "Prospectus"); conversions of the CLNs are not permitted prior to the publication of the Prospectus;

· The Ordinary Shares issued on the conversion of the CLNs each have a warrant attached entitling the holder to subscribe for an additional Ordinary Share at a price of 3p (the "Warrants"). The Warrants have a life of 2 years from the date of the publication of the Prospectus are subject to accelerated mandatory exercise if the Company's 5-day volume weighted share price exceeds 4.5 pence;

· the conversion price for the CLNs at 2.3p per Ordinary Shares represents a discount of 6% per cent. to the 5 day VWAP to 12 August 2020.”

Now the CLN’s have ALL converted on publication of the prospectus to shares at 2.3p. That’s the objective but there is a 2 year window to take the 3p warrants with an accelerator term.

The FURTHER 71.3m 1p warrants also listed following the 26th Oct RNS and then the 2p placing warrants that were left were subjected to the accelerator on 27th Oct.

The company may have overcooked it a tad. They may have been better off not issuing the accelerator as there were a lot of 1p shares slopping around. But then they may have thought let’s grab the cash.

I didn’t like the use of significant in the Christmas Eve RNS heading either, nor did I like the Christmas Eve RNS! Yet to see a good one then or on Maundy Thursday for that matter!

But we are where we are. We still have more to come and at least we are funded. This can turn but it’s now going to take a little longer.

Sell at a loss and perhaps come back or sit it out. Those are the decisions I was considering. The next drill results could be sold into but if good it will come back as there will be new holders.

Gonna sit for now.

Trek

I don’t hold here. I have just had a look as it was plugged on the ARB bb. This is obviously a recovery play. Those drivers are pretty evident. Resumption of trade, refinancing and no additional covid disruption.

Looking through the RNS’s make sure you read the one for 18 Dec 2019. It gives an overview of the drawdown facility and the finance drivers. This is what the drew money for and because of covid much of it has not come to pass on time or on budget....

“Works at Nagpur, including a Private Freight Terminal ("PFT") and additional warehousing should be completed before the calendar year end. DLI is actively marketing the PFT and DLI expects an uptick in bulk cargo volumes as these facilities ramp up. Nagpur has expanded commodity freight with the addition of sugar and cotton exports during the period and the terminal maintains strong market share of the export-import market of around 40%.

The terminals at Bangalore and Palwal are both expected to be completed and to commence initial commercial operations by the end of the current fiscal year. Completion of the terminal at Chennai, along with its Free Trade Warehousing Zone, is expected to be later in 2020, as the team work through the regulatory approvals required for the facility.”

From the September interims the have a nav of 15.3p and 30.8m cash so you have to understand what the gap is between the current sp and nav. For a closed investment like this there will nearly always be a discount.

The discount here is imo due to the loss/share of 2.9p, the huge admin costs and the accrued interest on the draw downs. Factor that in with revenue reductions, project delays and the risks with covid and you see why the market has been harsh on the SP.

The stimulus plans and base rate cuts in India will help.

Outside of calendarised trading updates and mandatory results it’s also not exactly a news driven share. Imo this one is pretty much all about the financial footing.

The real catalyst here to get closer to the nav is covid ‘testing/containment’ and debt restructuring and cost cutting. That is why they need so much cash but it won’t last. If, however the management can renegotiate better debt terms or govt finance then this indeed would rerate.

Atm 1.6p is probably too cheap due to risk aversion and 10p may be too expensive based on current losses.

There are some interesting plays in the pf, particularly energy. That should give them good leverage to refinance as the current rates are too high. Look at the consolidated statements for income and expenses summary tables to September 2020 at the bottom of the RNS.

Investors may do well here but not for me. Atb.

Trek

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