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Share Bear

Buying miners – Snappy Intro Series

November 30th, 2012 | Posted by shauniekent in Uncategorized - (0 Comments)

Buying miners

What i’ve learnt

  • Firstly, help yourself to a large dose of scepticism. Seriously. Small mining companies and explorers seem to constantly over exaggerate potential, timescales and underestimate costs. This leads to the market being dissapointed and confidence in the company reduced. It also leads to cost over runs, running out of cash and having to refinance/take on debt/issue more shares – all bad news for shareholders.
  •  Explorers are speculative, with timescales being in years before a mine goes through all the required tests and gains the required permissions.
  • There are mega caps like Rio Tinto (more correlated to global output/need for raw materials)and there are of course tiddlers with perhaps one mine somewhere they are pinning their hopes on.
  • Miners are correlated with commodity prices. if the company mines copper, then expect its share price to correlate to the price of copper over time.
  • Finally i have found some interesting looking miners, only to later discover some complex and confusing financial arrangements that exist where profit or assets are shared/split/part owned by another entity. Far too confusing for anyone other than an expert and often the financial arrangements may be hidden in RNS stories from way back.

There is an interesting article over on Investors Chronicle about mining companies and how such a small % are successful.

In summary, i’d have to have some very compelling reasons to invest in small miners. Hopefully i’ve dampened any mining risk taking tendencies you may have – just as i did(do!). It’s far to had to judge the risks and potential rewards unless you are experienced in this sector. My only mining position ever is Frontier Mining who i believe are priced cheaply due to poor expectations management/communication with shareholders. They are just starting to produce and i’m hoping i bought in on a low with plenty of upside as they increase (hopefully) production. I couldn’t find any nasties lurking but you never know…

Snappy Intro Series – Introduction summaries for the aspiring investor

November 30th, 2012 | Posted by shauniekent in Educational - (0 Comments)

I have been interested in shares and investments for a couple of years now. I have learnt a tremendous amount but am still fresh enough to remember the ignorance of my beginnings and the biases I unknowingly held. That’s not to say I’m free from bias, but certainly less so.

I want to set out a series of posts on different sectors of the market and summarise what I’ve learnt from my own experiences and from what I’ve read on the web. I hope they are succinct, snappy and mostly an accurate assessment .
I’ll be starting with mining companies…

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PVCS – PV Crystalox Solar – BUY!

November 28th, 2012 | Posted by shauniekent in My positions | Oppurtunity - (0 Comments)

I’ve bought £500 at 9.1p. I was looking to buy when they were at just over 8p but dithered and missed my possible entry point by a penny! Their recent interim management statement hints at a return of cash to shareholders. I’ve writtenabout this company before and their massive cash pile. They have been crippled by low prices for their products and their strategy was to conserve cash, cut costs and limp along until prices picked up, perhaps in a few years time. The latest statement shows a marked change of tone: http://www.pvcrystalox.com/scripts/php/rns_viewer.php?id=20506230

 

“The Group has a strong net cash balance and the Board is continuing to reorganise the Group, to enable the return of cash to shareholders.  The Board expects to make a further announcement before the year end. ”

Briliant news and an expected catalyst by year end for share price movement (year year or financial year i wonder). Best case scenario for shareholders is a winding up of the busniess and redistribution of all cash – worth twice the current share price. Worst case, who knows, but just 20% giveaway could be 3.5p.

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Ms International – MSI – Half year report

November 22nd, 2012 | Posted by shauniekent in On my watchlist | Oppurtunity - (0 Comments)

Half year report out today. Share price reacted well to the news.
http://www.digitallook.com/news/rns/20516659-12869/MSI-Half_Yearly_Report_html

239p £44m market cap. 10m cash. Healthy asset sheet.

Profits lower than H1 2011 but they have 25% higher value of orders on hand than H2 last year (i wonder if this means they think revenues will be 25% higher than H2 revenues). If so then profit could take a small jump and P/E currently perhaps around 8 would fall to maybe 6 or 5!

Vague I know but I can’t find accurate forecasts and this is a quick glance.

The chairman finishes with a caveat.
“All matters considered, the Board has a good measure of confidence as to the full year outlook for the Group, subject to there being no further deterioration in the global economy that could adversely affect our two industrial engineering divisions.”

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PV Crystalox Solar PVCS – Ready to give out cash?

November 20th, 2012 | Posted by shauniekent in On my watchlist | Oppurtunity - (0 Comments)

(Figures in Euros unless otherwise stated)

Solar panel maker that has been savaged by cheap Chinese competition. I can’t recall the details of what’s gone on in the industry but essentially there has been mass over supply. At the half year point they had 122m cash. And at a glance about another 100m of assets too. Their strategy seemed to be  to cut costs, reduce production and limp along until prices recovered – using their cash pile slowly. Of course shareholders might like the company to voluntarily fold and cash to be distributed.

First half loss was about 12m. Market capitalisation is £35m.

In the management statement released yesterday ( from the ‘outlook’ paragraph):

‘’The Group has a strong net cash balance and the Board is continuing to reorganise the Group, to enable the return of cash to shareholders. The Board expects to make a further announcement before the year end.’’

From the half year report ‘outlook’ section:

‘’While the Group continues to believe in the positive long-term outlook for PV, it is mindful of the intensely competitive environment which is likely to persist in the short to medium-term and which has already led to many companies exiting the industry, either voluntarily or through insolvency. The Group has a strong net cash balance and the Board will make the necessary decisions during the remainder of the year to serve the best interests of shareholders.’’

This looks like a change of attitude within the company. Just how much cash they might return is a guess at the moment. Of course with a dividend payout the share price will fall but if a payout is announced, then I expect the SP to jump before the ex div date.

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Hosting Problems – Sorted!

November 20th, 2012 | Posted by shauniekent in Personal - (0 Comments)

I’ve had a few problems with my GoDaddy webhosting lately. This site has been up and down and i even lost a few posts. With any luck it’s all rectified now, expecially as i may be branching out into offering some freelance webdesign services myself!

 

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