Ferrexpo Share Discussion Threads

[bellbottom] 03/2/2017 09:01

Not happy with the ongoing Trump effect. Russia continues to battle on the ground and in cyberspace. This may seem a long way from the mines in Poltava, but lets not forget previous Russian effects on FXPO. Crimea and the loss of the Zaliv shipyard.
Also the Stakhanov Rail car works, which is owned by Zhevago. This is located in the heart of Russian backed territory and appears to be closed down.

Great to have the new Deutsche Bank upgrade but not happy with the continuing Russian 'war' and the nurturing of Putin by Trump.

I like the article about Ukraine building a wall between it and Russia. Maybe get the Russians to pay for it?

[onedb1] 03/2/2017 08:34

Morning Granto,By the way am ex Blackrock and know asset management pretty well. Very different model to an investment bank ( sell side )

[muffster] 03/2/2017 07:07

Great post onedb

[bigbigdave] 03/2/2017 06:49

Iron Ore taken a wallop off 7%, top up time here today perhaps.

[telbap] 02/2/2017 16:38

Granto......bankers are bankers.....if Blackrock step in, they will want their pound of flesh for sure.

[granto2] 02/2/2017 14:23

Blackrock are firstly investors, but they are also Bankers, or 'shadow' bankers. They can and do step in as bankers if they feel that their investments are being squeezed by banks or bondholders. If Ferrexpo ever found itself boxed into a corner and was getting forced into a raw deal from its current bankers or bondholders, Blackrock's banking arm could step into the breach offering more favorable terms. They would take the view if anyone is going to cream the company they won't stand for it.

[onedb1] 02/2/2017 13:23

Not expensive actually as we had 2015 Eps at 20p whilst 2016 will most likely be higher due to h2 better conditions and already known cash increase . 2017 so far is on track for another EPS increase. So if in March we have 25/30p EPS at around 7 P/E ratio we could justify 210p. But given that the current Ytd average price is already far exceeding anything in h2 2016 , even 210 is conservative . The average price we are told in the RNS in 2016 went up to 58.5 from 55.5 in 2015. Jan 2017 is in a narrow range around 78-80$ . The more this continues the more we earn and significantly cut debt . Blackrock is not a speculator but an asset manager that invests for the longer term . Hence having them on board is significant . My super wave 3 if any recall my chart ( me too in from 70p) was around a conservative 165-170. Wave 5 is much higher. By March I would not be surprised to see this at 205-220p

[granto2] 02/2/2017 12:58

what happens if the price of ore crashes back to $50 a ton?
Clearly this would be a disaster for everyone in the ore business, but Ferrexpo has a few cards to play here.
1, Ferrexpo is the lowest cost producer in the world, even though it sells a quality product, if we are caught in a race to the bottom, Ferrexpo will be able to stomach the depths greater than our competitors.
2, Ferrexpo sales. 90% of Ferrexpo's sales are sold on long term contracts, of course this really only protects for the 3 to 6 months ahead, so in theory if ore absolutely fell out of the sky over the next two weeks, to a mind blowing $50 a t, we still would be protected for the next 3 to 4 months on average. It would not save us, but the extra $80m profits would provide some cushion in that doomsday period. After than we'd be at the mercy of the market.
-all told, the market looks reasonably stable for the months ahead, even of the market hits the bricks in May June or July we will have enjoyed the serious profits generated in Q1 and April, over $50m a month EBITDA, and we will have our long term contract pricing to protect us in MAY JUNE JULY ( agreed in Q1 contracts ).
In a nut shell what all this means is that Ferrexpo is beautifully positioned for the next 6 months, by the time, Ferrexpo hits July 2017 I expect it will have generated $300m EBITDA for H1. add that to the Balance Sheet of today.
all of these explains the recent share price rise. I genuinely cannot predict where the share price will go, but I suspect when late summer Interim report comes out we will be sitting on over $300 cash, and have a further $87m paid of our debt, an additional $40m pumped in Capex, The ratings agencies will have finally caught up with the game and Ferrexpo will be re-rated. Out net debt position will be $300m and even if the market were to collapse at that point, Ferrexpo could weather just about anything than came its way. I haven't even mentioned Blackrock and their $60m investment here, any aggressive bondholder threatening and being unreasonable will have to contend with their investment team.
The March AR will be a boon here, but for me the Boom will be in the interims later this year.
DYOR and Best of luck to all, also read the risks in the annual report, Mining can be risky ( Samarco should be a sad reminder ). But to end this post on a up. I think Ferrexpo looks very strong

[bellbottom] 02/2/2017 12:21

Hi Giles,

I've been in and out since about 2008/2009. Seen the highs, experienced the lows along the way. Certainly the potential was there for me to make huge amounts but retrospect is a wonderful thing.
Been in since the low 30's on this run and have five figure profits over the span of what must now be eight or nine years. Could so easiliy have been six figure profits. Won and lost along the way. This share, as you know, has been hit by a few hefty blows over the years. But since the bank went down late 2015, there hasn't been any further bad news of such intensity. Looking back, this was a fantastic opportunity to buy low - anyone who got in at around 15/16p and HELD, should be laughing all the way to the bank.
My mistake has been to buy and sell, trying to guess the peaks and troughs, and though succeeding some of the time, overall I have lost out. Better to have sat tight when I bought back in the low 30's.
Also, used to get a very nice divi with this share. This will return, so in the meantime, unless we are hit by some unexpected bad news, I will be holding and adding, where possible, on any significant dips.

Good luck

[gilesgraves] 02/2/2017 10:22

Im so grateful to the information provided by you guys. I have been with FXPO since 70p and I have learnt so much. I literally didn't have a clue when I started. The only reason I invested in it was because I saw it had a +30% day or thereabouts. It seems incredibly expensive now at 165p but that is only because of my perception due to starting point. I see from previous years it has been much much higher. Some of you guys must have made huge fortunes from this share alone. Amazing. Congratulations.

[pbutterworth1] 01/2/2017 16:58

thanks granto

[granto2] 01/2/2017 15:48

I would add that Ferrexpo will spend $70m on Capex, that should improve operations even more.
There is a newly developed product in ferrexpo, its a premium plus, we will hear more about it in the annual report.

[telbap] 01/2/2017 15:48

Thanks granto.....nice info..:-)

[granto2] 01/2/2017 15:44

Blackrock absolutely have shorted Iron Ore as a commodity, protecting any downside. They absolutely can't lose on this ticket.

[pbutterworth1] 01/2/2017 15:43

...thanks granto..

[granto2] 01/2/2017 15:36

a couple of things have happened this share recently and a few things that will impact it. The recent arrival of some serious institutional investors in the guise of BR and TT, coupled with it ascension into FT250 listing. I suppose we could add in the Q4 Production report.
Moving forward, things to watch
1, The Annual report in March, but more importantly the CASH on hand at that tine. It should be $200m. and a further $40m paid off debt. The post Dec 31st activity will be crucial
2, The reschedule of bonds over longer maturity dates should occur. oddly the longer this gets delay the better deal we will get. don't be surprised if its mid 2017.
3, The longer Samarco remains closed and in limbo the better, and things looks sad and drawn out there.
4, the expansion of the mine to 20m tons a year can be achieved through a new plant. But debt needs sorting first.
5, clearly iron ore price is huge here. But this is a premium product so protected somewhat.
lastly, Blackrock ran the calks and worked out the Ferrexpo will make $720m EBITDA in 2017 of iron ore stays the same price.

[volsung] 01/2/2017 14:05

Poor old Jesse killed himself in the end

[telbap] 01/2/2017 13:09

Buy buy buy!

[pbutterworth1] 01/2/2017 12:34

On a more focussed note the buying and selling here is showing a change after last week. Sellers appear to have dried up, buyers are panicking as there is no stock. Classic. Reminds me of a day in the life of Jesse Livermore 'Reminiscences of a Stock Operator' Edwin Lefevre 1923. Nothing really changes :-)

[pbutterworth1] 01/2/2017 12:26

I could buy several audis with what I have/continue to make on FXPO. Busy preparing my tax return 16/17 and hunting for losses. I run a (comparatively rare - why not more petrol ?) Merc estate E350 v6 3.5l cgi petrol. Goes like sh*t. I am very luck I do not do the miles - diesel cars are nasty in many ways, including when you fill up and touch that pump...

[panic investor] 01/2/2017 12:13

We were all told we were saving the planet!

[telbap] 01/2/2017 10:42

Got a4 diesel this time, just see trouble ahead for all diesel's.

[panic investor] 01/2/2017 10:26

My next is going to be petrol too - having been ambushed down the diesel route for years !Have to wait till Sept though !

[tugwil] 01/2/2017 10:18

Good to see that it's not a dirty diesel!