There were few interesting news from the recent Oxiana's AGM. Other than a golden handcuff resolution to the Chief ($2.2 millions worth of shares to keep him at the company for a further three years..!!), it actually makes me reconsider my intention of selling OXR shares to top up on a smaller PNA (Pan Australian Resource).
The other thing is there is this mid week buy alert on OXR from Fat Prophet. This sort of alert usually push the price up a bit, so maybe a good time to sell and buy it again when they wane off?
Here's the alert:
Mid week Alert Oxiana - Buy around $3.10
In FAT320 we highlighted Oxiana as a potential buying opportunity. In hindsight, we should have issued a buy recommendation as the stock has since moved higher. The reason for our initial caution was that we expected Oxiana's production to decline slightly in 2007 and 2008 before picking up strongly in 2009. We therefore thought members could afford to wait before buying. However, given the persistent strength in metals prices and the ever present prospect of corporate activity, we believe the risk lies in NOT having exposure to Oxiana.
The diversified miner held their Annual General Meeting today and the tone was very upbeat. The company has a number of large production projects in the pipeline and if base and precious metal prices hold up, earnings should be stronger than current market expectations.
Oxiana currently produces copper and zinc and a small amount of gold, however gold and silver production will ramp up significantly in the years ahead. The company also holds a 57 percent stake in listed uranium company Nova Energy via the recent takeover of Agincourt Resources.
The company also indicated an intention to 'consider more strategic corporate activity' in 2007, meaning acquisitions remain a focus. On the other side of the coin, Oxiana remains attractive to potential predators, given its development pipeline and cheap valuation. On consensus earnings estimates, the company trades on a price to earnings ratio of 10 times 2008 earnings, and we believe those earnings are overly pessimistic.
We recommend Oxiana as a buy to all Members around $3.10. While the share price may prove volatile in the short term due to the current sensitivity to copper and zinc prices, for those Members taking a two year plus investment timeframe, we believe Oxiana represents an attractive buying opportunity.
Oxiana will be added to the Fat Prophets Portfolio.
Kind regards, Fat Prophets Investment Heavyweights
Portfolio Update (May 2007)
As of 2nd of May 2007, I am holding shares of this companies: (in alphabetical order)
- Deep Yellow Limited (DYL.ASX)- Current share price: $ 0.60. I bought DYL for the first time on 13 October 2006, my entry price was $0.17. I am trading it few times since. My last purchase price was $ 0.495.
- Glengarry Resource (GGY.ASX) Current share price: $ 0.205. I bought GGY for the first time on 03 April 2007. My price was $0.175. My last purchase price was $ 0.195.
- Giralia (GIR.ASX) - Current share price: $ 0.76, first purchased at $0.69 on 08 March 2007. I sold the first batch for $0.89, before reentered again at $0.83
- Horizon Oil (HZN.ASX) - Current share price: $ 0.30, purchased at $ 0.305 on 10 April 2007.
- IBA Health (IBA.ASX) - Current share price: $ 1.305, first purchased at $0.975 on 03 November 2006. Last purchase was on high $1.40s.
- Industrea Ltd (IDL.ASX) - Current share price: $ 0.475, first purchased at $0.305 on 19 January 2007. I'm watching this stock from $0.19 days, and finally decided to buy at $.305. These was sold at $0. 405. Reentered the market again at $0.44.
- Oceana Gold (OGD.ASX) - Current share price: $ 0.87, purchased at$ 0.76 on 12 April 2007.
- Oxiana Ltd (OXR.ASX) - Current share price: $ 3.09, purchased at $2.81 on 21 March 2007.
- Pan Australian Resource (PNA.ASX) - Current share price: $ 0.53, purchased at $ 0.525 on 27 April 2007.
- Tassal Group (TGR.ASX) - Current share price: $ 3.40, first purchased at $2.29 on 27 February 2007. I sold my first batch at $2.89 and reentered again at $2.85.
- Thor Mining Plc (THR.ASX) - Current share price: $ 0.35, purchased at$ 0.415 on 17 April 2007.
I've also bought and sold few shares during the month. Those shares unfortunately kept going down in their prices after I bought them, so I have to bail out when they touched my stop losses. One of them was KIM (Kimberly Diamond Company)
Dividend Yield Play (DYP)
Second dividend cheque is coming.. this time from OXR (my first cheque is from IBA).
Dividend is 5c, paid on 30/04/2007, percentage franked is 46%, Final, 2.3C FRANKED @ 30% NIL CFI D.R.P
There is a strategy called Dividend Yield Play (DYP), it is a popular strategy with many investors. Companies pay dividends at different times during the year, providing an opportunity to buy and sell the shares, and collect the dividend as income. Doing this on a regular basis may generate a recurring income stream.
Here's an article from the ASX website about DYP:
On July 1, we set up two mock portfolios and compare their performance over the 2004/05 financial year. Each portfolio started with $100,000.
Objectives of the study
The objective of the portfolio study is to compare the returns of using instalments versus shares when actively implementing the Dividend yield play (DYP) strategy. The aim of the DYP is to generate a regular dividend income stream throughout the year by buying shares and instalments prior to the ex-dividend date and then selling those shares and instalments some time later (trading period is 45 days in our study). This process is then repeated by reinvesting the capital into the next dividend opportunity.
What type of investors will this strategy suit?
This strategy aims to actively manage an investment portfolio and requires monitoring on a regular basis. Due to the leveraged nature of instalments, this strategy may suit investors with a moderate risk profile.
Expected results of this study?
Our expectation is that the instalment portfolio will outperform the share portfolio during periods where the share price remains neutral (or rising) during the specified trading period. Conversely, we expect the instalment portfolio to underperform when the share price falls strongly after the ex-dividend date.
Which stocks will be selected?
The selected shares are expected to go ex-dividend in the certain months. They are expected to pay fully franked dividends and there are a range of instalments available over each share.
How we run the portfolios
There are two portfolios:
Portfolio 1 - Trading for dividends using shares
Portfolio 2 - Trading for dividends using instalments
Each portfolio will have an initial $100,000 available from 1 July 2004.
All dividends and remaining cash will be placed in a cash management account. For simplicity, we assume no interest will be accrued on these amounts.
What if the share price falls?
A stop loss will be placed in the market for shares and instalments traded. This is to manage the capital loss of the portfolio given underperformance in the share price.
The shares (and instalments) will be liquidated at the closing price of that day where the closing price of the share falls by more than 5% compared to the purchase price of the share during the investment period. The stop loss level will be adjusted down on the ex dividend date by the dividend amount.
Brokerage charges
A brokerage rate of $40 per trade will be factored into each transaction.
Tax implications
All trading positions will be liquidated within a 12-month timeframe. As a result, each portfolio is ineligible for the 12-month capital gains tax concession.
Both portfolios are eligible for franking credits, as the shares and instalments will be held for a period of 45 days plus two days (franking credit ‘45 day’ rule).
http://www.asx.com.au/investor/warrants/news/dyp_rules.htm
Dividend is 5c, paid on 30/04/2007, percentage franked is 46%, Final, 2.3C FRANKED @ 30% NIL CFI D.R.P
There is a strategy called Dividend Yield Play (DYP), it is a popular strategy with many investors. Companies pay dividends at different times during the year, providing an opportunity to buy and sell the shares, and collect the dividend as income. Doing this on a regular basis may generate a recurring income stream.
Here's an article from the ASX website about DYP:
On July 1, we set up two mock portfolios and compare their performance over the 2004/05 financial year. Each portfolio started with $100,000.
Objectives of the study
The objective of the portfolio study is to compare the returns of using instalments versus shares when actively implementing the Dividend yield play (DYP) strategy. The aim of the DYP is to generate a regular dividend income stream throughout the year by buying shares and instalments prior to the ex-dividend date and then selling those shares and instalments some time later (trading period is 45 days in our study). This process is then repeated by reinvesting the capital into the next dividend opportunity.
What type of investors will this strategy suit?
This strategy aims to actively manage an investment portfolio and requires monitoring on a regular basis. Due to the leveraged nature of instalments, this strategy may suit investors with a moderate risk profile.
Expected results of this study?
Our expectation is that the instalment portfolio will outperform the share portfolio during periods where the share price remains neutral (or rising) during the specified trading period. Conversely, we expect the instalment portfolio to underperform when the share price falls strongly after the ex-dividend date.
Which stocks will be selected?
The selected shares are expected to go ex-dividend in the certain months. They are expected to pay fully franked dividends and there are a range of instalments available over each share.
How we run the portfolios
There are two portfolios:
Portfolio 1 - Trading for dividends using shares
Portfolio 2 - Trading for dividends using instalments
Each portfolio will have an initial $100,000 available from 1 July 2004.
Every month, the portfolios will take the following steps:
Select companies from the above list who announce a profit result and payment of a dividend
The companies will be filtered in the order that profit announcements are made
Ensure that these companies meet the criteria set below:
- The size of each trade is $10,000 per portfolio (plus brokerage)
- Purchase date : the shares and instalments will be purchased at the offer price (at 3.55pm EST) two trading days after the company announcement of the dividend payment.
- Sell date: the shares and instalments will be sold after 45 days at the bid price (at 3.55pm EST), entitling each portfolio to franking credits. The total holding period is 45 days plus two days for acquisition and disposal.
Selection criteria for shares and instalments
- Portfolio 1 will select shares based on the following criteria:
After two trading days following the company’s profit announcement, the share price must NOT have fallen by more than 5% of the closing price on the trading day prior to the announcement.
Dividends are fully franked. - Portfolio 2 will select instalments based on the following criteria:
Instalments are regular geared (i.e. <>
All dividends and remaining cash will be placed in a cash management account. For simplicity, we assume no interest will be accrued on these amounts.
What if the share price falls?
A stop loss will be placed in the market for shares and instalments traded. This is to manage the capital loss of the portfolio given underperformance in the share price.
The shares (and instalments) will be liquidated at the closing price of that day where the closing price of the share falls by more than 5% compared to the purchase price of the share during the investment period. The stop loss level will be adjusted down on the ex dividend date by the dividend amount.
Brokerage charges
A brokerage rate of $40 per trade will be factored into each transaction.
Tax implications
All trading positions will be liquidated within a 12-month timeframe. As a result, each portfolio is ineligible for the 12-month capital gains tax concession.
Both portfolios are eligible for franking credits, as the shares and instalments will be held for a period of 45 days plus two days (franking credit ‘45 day’ rule).
http://www.asx.com.au/investor/warrants/news/dyp_rules.htm
Glengarry (and Uranium)
An interesting article about Glengarry Resource at the New Zealand Herald. GGY went up around 12% yesterday.
Here it is:
Uranium
There's big money to be made in heavy metal. And for those after stock which has the potential to rise tenfold in quick time, gold is good but uranium is even better.
The all-important ingredient for nuclear bombs has soared from US$7 a pound at the start of this decade to more than US$100 this month.
Uranium miner Summit Resources - which trades on the NZX as well as the ASX - was worth just 19c a share at the start of 2005 but hit a record high of $7 this month. The shares took off when the price of uranium started to soar and a drilling programme at Mt Isa in Queensland confirmed its uranium deposits were world-class.
The company has since become a takeover target for the larger Paladin Resources.
Those looking for the next big thing in uranium mining will find plenty of minnows on the ASX but one which at least one New Zealand broker keeps a regular eye on is Glengarry Resources.
The Perth company trades at just A18c a share but it has a number of exploration properties in well-mineralised but relatively unexplored provinces of Australia including strategic land holdings adjacent to two world-class deposits - Kidston (gold) and Cannington (silver-lead-zinc).
And just this week the company announced it has been granted two exploration licences "considered highly prospective for uranium" in the northwest of Western Australia.
The licences cover the northern part of Glengarry's, 1700sq km Citadel Project 100km north of Telfer in the Paterson Province. The Paterson Province hosts the world-class Kintyre uranium deposit (36 Kt U308) currently being assessed by Rio Tinto.
BUT ... High prices may make exploration a more attractive investment but until mining begins, stocks like Glengarry remain highly speculative investments.
Uranium could hit US$1000 a pound and it won't change the odds of finding the stuff. - Liam Dann
http://www.nzherald.co.nz/category/story.cfm?c_id=25&objectid=10435345
Here it is:
Uranium
There's big money to be made in heavy metal. And for those after stock which has the potential to rise tenfold in quick time, gold is good but uranium is even better.
The all-important ingredient for nuclear bombs has soared from US$7 a pound at the start of this decade to more than US$100 this month.
Uranium miner Summit Resources - which trades on the NZX as well as the ASX - was worth just 19c a share at the start of 2005 but hit a record high of $7 this month. The shares took off when the price of uranium started to soar and a drilling programme at Mt Isa in Queensland confirmed its uranium deposits were world-class.
The company has since become a takeover target for the larger Paladin Resources.
Those looking for the next big thing in uranium mining will find plenty of minnows on the ASX but one which at least one New Zealand broker keeps a regular eye on is Glengarry Resources.
The Perth company trades at just A18c a share but it has a number of exploration properties in well-mineralised but relatively unexplored provinces of Australia including strategic land holdings adjacent to two world-class deposits - Kidston (gold) and Cannington (silver-lead-zinc).
And just this week the company announced it has been granted two exploration licences "considered highly prospective for uranium" in the northwest of Western Australia.
The licences cover the northern part of Glengarry's, 1700sq km Citadel Project 100km north of Telfer in the Paterson Province. The Paterson Province hosts the world-class Kintyre uranium deposit (36 Kt U308) currently being assessed by Rio Tinto.
BUT ... High prices may make exploration a more attractive investment but until mining begins, stocks like Glengarry remain highly speculative investments.
Uranium could hit US$1000 a pound and it won't change the odds of finding the stuff. - Liam Dann
http://www.nzherald.co.nz/category/story.cfm?c_id=25&objectid=10435345
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