I bought some more SDL yesterday at $0.26 (it was down around 11% then), and had a bit of heart attack when it kept going down to 0.24 (down around 18%). The price stayed at around 0.245 for a while, until around 1 hour to the closing when it started to move up again to close at $0.27. Made me wonder though, during preopen time at the closing, somebody actually bid at $0.295!!
It a good day today for SDL, despite the sea of red. At the time I write this blog, SDL is sitting at $0.305, up around 12% from yesterday.
Today's highlight, I put a bid on IBA at $0.715, unfortunately price seems to be bottomed at $0.725.
PNA - On The Move
Well, the ASX was not exactly ended in green yesterday. PNA was the only share in my holding that was green, and I think it now deserves a move.
The thing is: I devided my holding into two sections. I call them : Long and Red.
"Long" consists of pretty stable shares and those who are still sitting above my purchase price. It is a short list of: AGM, BPT, CBH, MGX, TGR and OXR.
"Red" consists of my currently 'not so good' investments, a looong list, lead by AFG, and ended with SDL.
PNA is currently on my 'Red', but doing pretty well for the last week or so. I will do PNA a well deserved upgrade to my 'Long' list sometimes soon.
The thing is: I devided my holding into two sections. I call them : Long and Red.
"Long" consists of pretty stable shares and those who are still sitting above my purchase price. It is a short list of: AGM, BPT, CBH, MGX, TGR and OXR.
"Red" consists of my currently 'not so good' investments, a looong list, lead by AFG, and ended with SDL.
PNA is currently on my 'Red', but doing pretty well for the last week or so. I will do PNA a well deserved upgrade to my 'Long' list sometimes soon.
It's Monday.. and Hey It's Green! (or Not...)
ASX index was touching green few times today, and my holding still doesn't look great. PNA is on the lead after profit taking yesterday, but the others are all in red.
I am watching the screen closely today, but missed a few early chance, when the share price took a dip in the morning. Traffic was bad and took me nearly two hours just to get the kids to school and back.
I am thinking to cut some of my holding in exchange to what it seems a better future performer. I am planning to top up on Tassal Group, and possibly some IBA and REX. I might have to let go MLS.
I am watching the screen closely today, but missed a few early chance, when the share price took a dip in the morning. Traffic was bad and took me nearly two hours just to get the kids to school and back.
I am thinking to cut some of my holding in exchange to what it seems a better future performer. I am planning to top up on Tassal Group, and possibly some IBA and REX. I might have to let go MLS.
Huntley's on CBH
From their new reasearch:
CBH Resources (CBH)
Our valuation rises 3% to 74c a share after increasing near term silver forecasts. We maintain our Speculative Buy looking for strong growth firstly from Rasp in mid 2008 followed by Panorama in FY10. Panorama should bring improved margins while copper will diversify the revenue stream. Rasp margins will benefit from high grade remnant Broken Hill ore.
Near term multiples are attractive considering the growth to come. The balance sheet is solid and CBH well placed to fund expansions. Friction with 25.8% shareholder Toho Zinc adds to intrigue. Recent announcements sound like the type made by a company being stalked. CBH won't necessarily be taken over, but it's a nice option on an undervalued stock. The speculative caveats are high production costs at Endeavor and development risk.
Costs leave the company exposed to any continued pullback in metals prices. Management is working to improve costs and progress would help confidence in the story.
CBH Resources (CBH)
Our valuation rises 3% to 74c a share after increasing near term silver forecasts. We maintain our Speculative Buy looking for strong growth firstly from Rasp in mid 2008 followed by Panorama in FY10. Panorama should bring improved margins while copper will diversify the revenue stream. Rasp margins will benefit from high grade remnant Broken Hill ore.
Near term multiples are attractive considering the growth to come. The balance sheet is solid and CBH well placed to fund expansions. Friction with 25.8% shareholder Toho Zinc adds to intrigue. Recent announcements sound like the type made by a company being stalked. CBH won't necessarily be taken over, but it's a nice option on an undervalued stock. The speculative caveats are high production costs at Endeavor and development risk.
Costs leave the company exposed to any continued pullback in metals prices. Management is working to improve costs and progress would help confidence in the story.
Another 'Bloody' Aussie Market
I have to admit that my plan don't really work here..
Another red day, five days losing streak, albeit firmer lead from the wall street and rossy economical condition at home.
Just managed to own 3 green stocks today: AGM, OXR, and MGX.
PNA was the worst performer, as profit taking were happening (I should have sold mine earlier.. should have seen this coming). SDL was very bad also.
There was a news today on Allegiance (AGM):
Basically Allegiance Mining's major shareholder, China's Jinchuan, has backed AGM in rebuffing Zinifex's unsolicited takeover offer.In a letter of support issued to the Australian stock exchange today, Jinchuan, which has a 10.4 per cent stake in Allegiance, said the offer undervalued the target.
“With its near-term production profile and highly prospective nickel province (in Tasmania), the vast majority of which remains unexplored, Jinchuan believes there to be significant further upside in Allegiance; and therefore the $1.00 per share offer for Allegiance is not reflective of the true value of the company,” Jinchuan said. “We strongly support the management and board of Allegiance and believe they are creating excellent value for shareholders and jointly, we will continue to do so.”
Jinchuan has an agreement to buy all nickel produced at the mine.
Another red day, five days losing streak, albeit firmer lead from the wall street and rossy economical condition at home.
Just managed to own 3 green stocks today: AGM, OXR, and MGX.
PNA was the worst performer, as profit taking were happening (I should have sold mine earlier.. should have seen this coming). SDL was very bad also.
There was a news today on Allegiance (AGM):
Basically Allegiance Mining's major shareholder, China's Jinchuan, has backed AGM in rebuffing Zinifex's unsolicited takeover offer.In a letter of support issued to the Australian stock exchange today, Jinchuan, which has a 10.4 per cent stake in Allegiance, said the offer undervalued the target.
“With its near-term production profile and highly prospective nickel province (in Tasmania), the vast majority of which remains unexplored, Jinchuan believes there to be significant further upside in Allegiance; and therefore the $1.00 per share offer for Allegiance is not reflective of the true value of the company,” Jinchuan said. “We strongly support the management and board of Allegiance and believe they are creating excellent value for shareholders and jointly, we will continue to do so.”
Jinchuan has an agreement to buy all nickel produced at the mine.
Allco Finance Group
I lost some (on paper) money on AFG. It doesn't make me feel better to know that lots and lots of other people is in the same situation as mine.
However just in case anybody interested in what the brokers have to say about this stock, here are their opinion: (But again -- I don't really trust broker's recommendation!! Huntley put on "Buy" recommendation a while ago that convinced me to actually bought it. I misplaced the full report).
Maquarie's comments:
Allco Finance Group
Investor concerns
--------------------------------------------------------------------------------
Stock: AFG AU
Volatility Index: medium
We examine the key Allco investor concerns and preview the first half of 2008 result due on 15 February. Allco has also announced the creation of two wholesale funds taking total assets under management to $13bn (excluding Rubicon $5bn).
ImpactPerception #1: Allco's funds management division is ex-growth. Despite the poor performance of the Allco listed funds, the creation of wholesale funds is driving continued growth. Allco previously set a target of four new wholesale funds by June 2008 (Transportation, Shipping, Infrastructure and Singapore based investment funds) and has now delivered on two of these, raising $600m of external equity, with two more shortly.
Perception #2: Allco is running out of money. Allco raised $500m of equity in December 2006 and a further $350m of subordinated debt in May 2007. When the credit crunch hit in July, Allco was positioned with $900m of undrawn funding facilities and Allco now has $312m left prior to any asset sales, lease maturities and loan repayments.
Perception #3: Allco is highly geared and financially risky. Total recourse debt as a percentage of debt plus equity is only 35%. Allco has a wholesale financial service division (ie Gateway & Mobius) that operates like a bank by borrowing and re-lending. This division was less than 3% of Allco 2007 net profit after tax, but increased assets and liabilities by over $3.6bn distorting the Allco balance sheet. Secondly, Allco financed 3 Airbus A330s for Emirates on long term leases using 95% non-recourse debt, 5% equity in December.
Perception #4: Earnings quality is poor. If the Allco business model is working effectively, there should be a high and growing proportion of asset sales to Allco related vehicles. Average compound earnings per share growth since May 2002 of Record Investments/Allco has been 53.7%, a commendable effort.
Perception #5: Rubicon transaction is overpriced. We can't rebut this one given the embryonic and unpredictable nature of Rubicon's earnings. The related party transaction however is small in the group context of Allco (circa 10%) and it will take two years to assess the quality of this acquisition.New price target of $9.30 (previous $14.15). Our previous price target of 14 times 2009 earnings per share now looks optimistic given the current environment. We have cut this to 10 times to reflect the dilutive Rubicon acquisition.
Earnings revision
Earnings per share: 2008 -7.2%; 2009 -8.3% due to dilutive Rubicon acquisition.
Price catalyst12-month price target: $9.30.
Catalyst: Delivery of transparent results, further funds management growth.
Action and recommendationOutperform (12-month view).
Fear of the unknown has destroyed Allco's market rating and two more satisfactory results (February and August) are needed to reverse this. With a 2008 price to earnings ratio of just 7 times and a dividend yield of 8%, we maintain the Outperform despite the unfavourable market backdrop.
Citigroup Figures:
Rating : Buy - High Risk
12 Mth Target Price : $12.69
Investment Fundamentals:
FYE 30-Jun 2007 2008 2009 2010
Profit $Am 211.8 261.7 362.9 386.6
Profit (norm)* $Am 201.4 261.7 362.9 386.6
EPS($A)* 60.7 72.6 97.4 103.8
EPS Growth % 26.4 19.6 34.1 6.5
P/E* x 9.2 7.7 5.8 5.4
P/E Relative % 60.4 49.5 37.6 37.4
DPS($A) 44.0 46.0 50.0 53.0
Yield % 7.8 8.2 8.9 9.4
Franking % 71.6 70.0 70.0 70.0
* Adjusted for goodwill and unusual items
Source: Company Reports and Citi InvestmentResearchShare Price
However just in case anybody interested in what the brokers have to say about this stock, here are their opinion: (But again -- I don't really trust broker's recommendation!! Huntley put on "Buy" recommendation a while ago that convinced me to actually bought it. I misplaced the full report).
Maquarie's comments:
Allco Finance Group
Investor concerns
--------------------------------------------------------------------------------
Stock: AFG AU
Volatility Index: medium
We examine the key Allco investor concerns and preview the first half of 2008 result due on 15 February. Allco has also announced the creation of two wholesale funds taking total assets under management to $13bn (excluding Rubicon $5bn).
ImpactPerception #1: Allco's funds management division is ex-growth. Despite the poor performance of the Allco listed funds, the creation of wholesale funds is driving continued growth. Allco previously set a target of four new wholesale funds by June 2008 (Transportation, Shipping, Infrastructure and Singapore based investment funds) and has now delivered on two of these, raising $600m of external equity, with two more shortly.
Perception #2: Allco is running out of money. Allco raised $500m of equity in December 2006 and a further $350m of subordinated debt in May 2007. When the credit crunch hit in July, Allco was positioned with $900m of undrawn funding facilities and Allco now has $312m left prior to any asset sales, lease maturities and loan repayments.
Perception #3: Allco is highly geared and financially risky. Total recourse debt as a percentage of debt plus equity is only 35%. Allco has a wholesale financial service division (ie Gateway & Mobius) that operates like a bank by borrowing and re-lending. This division was less than 3% of Allco 2007 net profit after tax, but increased assets and liabilities by over $3.6bn distorting the Allco balance sheet. Secondly, Allco financed 3 Airbus A330s for Emirates on long term leases using 95% non-recourse debt, 5% equity in December.
Perception #4: Earnings quality is poor. If the Allco business model is working effectively, there should be a high and growing proportion of asset sales to Allco related vehicles. Average compound earnings per share growth since May 2002 of Record Investments/Allco has been 53.7%, a commendable effort.
Perception #5: Rubicon transaction is overpriced. We can't rebut this one given the embryonic and unpredictable nature of Rubicon's earnings. The related party transaction however is small in the group context of Allco (circa 10%) and it will take two years to assess the quality of this acquisition.New price target of $9.30 (previous $14.15). Our previous price target of 14 times 2009 earnings per share now looks optimistic given the current environment. We have cut this to 10 times to reflect the dilutive Rubicon acquisition.
Earnings revision
Earnings per share: 2008 -7.2%; 2009 -8.3% due to dilutive Rubicon acquisition.
Price catalyst12-month price target: $9.30.
Catalyst: Delivery of transparent results, further funds management growth.
Action and recommendationOutperform (12-month view).
Fear of the unknown has destroyed Allco's market rating and two more satisfactory results (February and August) are needed to reverse this. With a 2008 price to earnings ratio of just 7 times and a dividend yield of 8%, we maintain the Outperform despite the unfavourable market backdrop.
Citigroup Figures:
Rating : Buy - High Risk
12 Mth Target Price : $12.69
Investment Fundamentals:
FYE 30-Jun 2007 2008 2009 2010
Profit $Am 211.8 261.7 362.9 386.6
Profit (norm)* $Am 201.4 261.7 362.9 386.6
EPS($A)* 60.7 72.6 97.4 103.8
EPS Growth % 26.4 19.6 34.1 6.5
P/E* x 9.2 7.7 5.8 5.4
P/E Relative % 60.4 49.5 37.6 37.4
DPS($A) 44.0 46.0 50.0 53.0
Yield % 7.8 8.2 8.9 9.4
Franking % 71.6 70.0 70.0 70.0
* Adjusted for goodwill and unusual items
Source: Company Reports and Citi InvestmentResearchShare Price
Hang in There!
Recession has arrived or will very shortly, said a senior US economist at Goldman Sachs in New York.
ASX was down today, dragged by the miners and banks. I do not own any bank's stock (No, I don't like to deal or work with the banks, full stop) but I do have few miners, so today is not going to be my best day.
Back to the US recession, wonder how it's going to affect Australia and the rest of the world.
Australian Stock Exchange has been in a losing streak for few days, but not the Asian. KLSE (Malaysia) has been gaining and reached a new high just yesterday, and Jakarta, Shanghai wasn't too bad either. Is this just to say that the Aussie are just too nervous about what happening in the US, and it's just a very good time to buy bargain shares?
Note: I transfered some more money on my trading account this morning. I am down again, now about 8% of my initial investment.
Re-enter Tassal Group
Tassal Group back on trading floor this morning, with a news of an oversubscribed placement of $3.85 per share. I sold some of my IBA shares and bought few TGR at $3.90
REX is still looking very bad, seriously looks oversold. I went to the company's website, and found out that despite the pilot shortage, everything else still looks good. But I suppose pilot is one of the most important part in the airline industry. One of the hot stock in 2008 according to Rick Klusman, Aequs Securities, is now sitting at $1.70, a far cry from $2.88 around seven months ago.
REX is still looking very bad, seriously looks oversold. I went to the company's website, and found out that despite the pilot shortage, everything else still looks good. But I suppose pilot is one of the most important part in the airline industry. One of the hot stock in 2008 according to Rick Klusman, Aequs Securities, is now sitting at $1.70, a far cry from $2.88 around seven months ago.
Allegiance Mining - Takeover Update
Australian Newspapers today posted an update on the Zinifex's hostile takeover on Allegiance:
Allegiance looks to Jinchuan -- The Australian
Allegiance may have a white knight -- Sydney Morning Herald
Chinese may bid for Allegiance -- The Age
Allegiance looks to Jinchuan -- The Australian
Allegiance may have a white knight -- Sydney Morning Herald
Chinese may bid for Allegiance -- The Age
Tassal Group on Trading Halt
Today's announcement from Tassal Group stated that the company was requested (and granted) a trading halt, in regard to equity raising. Indicative price now sitting at $3.90, quite a way down from $4.35 just few days ago. Price has been moving downward, so it will be interested to see the placement price. Hope it will be around $3.70-3.75 so I'll be able to pick a few. Trading will be resumed on 15 January 2008.
Brutal
Battered by the wall street, ASX is in the sea of red today. Uh oh.. Recession that will make 1929 like a walk in the park? Seems so extreme that way, but the picture is not so pretty either. I am thinking to reduce my holding and keep the cash in the meantime. Will see what will happen tommorrow, at this moment, FTSE is slightly up, but of course it still very early in the day.
Strong Gains on Base Metals
Wall street slightly up, and strong gains on base metals.
Nearly all shares in my portfolio are on the green today, led by Oxiana (OXR.ASX - News of a one-day "warning" strike at most Codelco copper divisions in Chile is helping to keep copper prices aloft, said analysts. According to the mining giant, production at the Salvador division is below normal levels).
London Metal Exchange base metals made strong gains due to broad investment activity. Aluminium rose $73 (2.98%) to $2,505 while copper firmed $290 (4.30%) to $7,035 and nickel added $2,175 (8.03%) to $29,275. Zinc strengthened $120 (4.92%) to $2,560 and lead gained $60 (2.29%) to $2,675. Comex copper was last quoted at 317.30 US cents per pound.
Spot gold was last quoted at $864.20. Comex gold futures climbed $9.10 (1.06%) to $869.10.
Nearly all shares in my portfolio are on the green today, led by Oxiana (OXR.ASX - News of a one-day "warning" strike at most Codelco copper divisions in Chile is helping to keep copper prices aloft, said analysts. According to the mining giant, production at the Salvador division is below normal levels).
London Metal Exchange base metals made strong gains due to broad investment activity. Aluminium rose $73 (2.98%) to $2,505 while copper firmed $290 (4.30%) to $7,035 and nickel added $2,175 (8.03%) to $29,275. Zinc strengthened $120 (4.92%) to $2,560 and lead gained $60 (2.29%) to $2,675. Comex copper was last quoted at 317.30 US cents per pound.
Spot gold was last quoted at $864.20. Comex gold futures climbed $9.10 (1.06%) to $869.10.
Gold and Oil
Cloudy today, the boys started school again. Little zayd who's starting Grade 1 was a bit quite and Isa looked a bit sleepy. Worse, we stucked in a traffic jam on the way to school!
Shares are no better, unfortunately. Gold is apparently in an uncharted territory, and oil hit the $100 magical number. Thanks to Wall Street, ASX was trading lower, and so most of my shareholding are in red, except PNA (which is a gold miner) and BPT (which is an oil digger). Oxiana is in more or less flat, and today's worse performers are DYL and AFG. Of course, how so predictable.
From today's The Australian:
Oil hits $US100, gold rises to record
Rhys Blakely January 03, 2008
OIL prices hit $US100 a barrel in New York overnight for the first time and gold reached a record in London.The surge in the value of crude oil, amid thin trading, follows violence in Nigeria, Africa’s largest oil producer, as well as a warning from OPEC that it may not be able to meet its share of global oil demand by 2024.
It is also a reaction to the weaker US dollar and a broader flight into safe-haven investments.
US crude futures gained more than $US4 a barrel to hit $US100. In London, Brent crude rose $US3.63 to $US97.48. In Nigeria bands of armed men invaded Port Harcourt, the centre of the oil industry, on Tuesday, attacking two police stations and raiding the lobby of a major hotel.
Four policemen, three civilians and six attackers were killed. The Niger Delta Vigilante Movement claimed responsibility for the attack.
“Although the violence has not impacted oil flow out of the country, it has reignited supply concerns as militant attacks have reduced Nigeria’s crude output by roughly 20 per cent since 2006,” said John Gerdes, an analyst at SunTrust Robinson Humphrey. Talk that several Mexican oil export ports were closed due to rough weather also stoked the market.
Oil last traded at more than $US99 a barrel on November 26, a few days after rising to a previous record high of $US99.29. Oil prices are now within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $US38 a barrel then would be worth $US96 to $US103 or more today. Trading volumes were about 50 per cent of normal in the session, meaning the price move was likely exaggerated by speculative buying.
Earlier in the overnight session in London, Gold had hit a fresh high, at $US859.30 an ounce, beating the $US850 fixing high recorded in 1980. The move followed renewed US dollar weakness and fuelled speculation that the sub-prime crisis is spreading into the wider economy. Gold, widely regarded a hedge against oil-led inflation, gained more than 30 per cent in value in 2007.
The Times
Shares are no better, unfortunately. Gold is apparently in an uncharted territory, and oil hit the $100 magical number. Thanks to Wall Street, ASX was trading lower, and so most of my shareholding are in red, except PNA (which is a gold miner) and BPT (which is an oil digger). Oxiana is in more or less flat, and today's worse performers are DYL and AFG. Of course, how so predictable.
From today's The Australian:
Oil hits $US100, gold rises to record
Rhys Blakely January 03, 2008
OIL prices hit $US100 a barrel in New York overnight for the first time and gold reached a record in London.The surge in the value of crude oil, amid thin trading, follows violence in Nigeria, Africa’s largest oil producer, as well as a warning from OPEC that it may not be able to meet its share of global oil demand by 2024.
It is also a reaction to the weaker US dollar and a broader flight into safe-haven investments.
US crude futures gained more than $US4 a barrel to hit $US100. In London, Brent crude rose $US3.63 to $US97.48. In Nigeria bands of armed men invaded Port Harcourt, the centre of the oil industry, on Tuesday, attacking two police stations and raiding the lobby of a major hotel.
Four policemen, three civilians and six attackers were killed. The Niger Delta Vigilante Movement claimed responsibility for the attack.
“Although the violence has not impacted oil flow out of the country, it has reignited supply concerns as militant attacks have reduced Nigeria’s crude output by roughly 20 per cent since 2006,” said John Gerdes, an analyst at SunTrust Robinson Humphrey. Talk that several Mexican oil export ports were closed due to rough weather also stoked the market.
Oil last traded at more than $US99 a barrel on November 26, a few days after rising to a previous record high of $US99.29. Oil prices are now within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $US38 a barrel then would be worth $US96 to $US103 or more today. Trading volumes were about 50 per cent of normal in the session, meaning the price move was likely exaggerated by speculative buying.
Earlier in the overnight session in London, Gold had hit a fresh high, at $US859.30 an ounce, beating the $US850 fixing high recorded in 1980. The move followed renewed US dollar weakness and fuelled speculation that the sub-prime crisis is spreading into the wider economy. Gold, widely regarded a hedge against oil-led inflation, gained more than 30 per cent in value in 2007.
The Times
Hope for a Better Year
There is a good way to start a new year. Praying that it will be a better year ahead.
(Opening my computer this morning, an email from Huntley read that Australian Market was set to trade lower. Wall Street in selling mode again... Oh No...)
And there is another good way to start the year, that is to actually starting it in a better and positive note:
Australian stock market was higher in today's early trade, despite a weak lead from Wall Street and lower metal base's price.
Ok. I started this new year with a regret that I sold off TGR a while ago. I just love this company, and was very close to re-buy them again few weeks ago, except the price run off in an uncatchable pace. Will watch it closely from now.. really really closely!
Second, there was a good news from DYL today. Just about time, if you ask me.. This company has been testing my patient for a while.. It's not from the frontline in Namibia, still at least something that reasonably good, hopefully keep the price from falling lower.
REX is still traded very thinly, down some 3% more, but still hoping the new year will bring new pilots and newly re-opened route.
(Opening my computer this morning, an email from Huntley read that Australian Market was set to trade lower. Wall Street in selling mode again... Oh No...)
And there is another good way to start the year, that is to actually starting it in a better and positive note:
Australian stock market was higher in today's early trade, despite a weak lead from Wall Street and lower metal base's price.
Ok. I started this new year with a regret that I sold off TGR a while ago. I just love this company, and was very close to re-buy them again few weeks ago, except the price run off in an uncatchable pace. Will watch it closely from now.. really really closely!
Second, there was a good news from DYL today. Just about time, if you ask me.. This company has been testing my patient for a while.. It's not from the frontline in Namibia, still at least something that reasonably good, hopefully keep the price from falling lower.
REX is still traded very thinly, down some 3% more, but still hoping the new year will bring new pilots and newly re-opened route.
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