Anglo Pacific Share Discussion Threads

[noslien] 26/7/2012 15:08

Some good analysis, but I think the picture maybe simpler than suggested.
Plot APF against a big general miner like XTA and you get a very similar pattern i.e. APF is just keeping in step with the miners.

[nielsc] 26/7/2012 14:21

Piedro:

I am surprised log charts aren't seen more often. They make much more sense.

QP:

"Sadly, recent market developments no longer favour Long Term Holders in this or many other equities in my view."

I don't really subscribe to that. Being a long term holder here with an average buying price of around a £1 I am happy to take the nice dividend and use any periods of weakness to add to my holding. Brings my average price up, but that can't be helped.

Being out of a share means you can quite easily miss the big unexpected rises. Less trading mean less trading costs as well.

Are you looking to buy APF or do you have a holding already?

Cheers,
Niels

[piedro] 26/7/2012 14:03

All true.

Do you think the Canadian coal
may be our only hope ?

[quepassa] 26/7/2012 13:18

Yup. That's exactly right.

The long-term chart is spot on until it breaks down immediately following the Lehman debacle.

The long-term chart since 08/09 speaks volumes about how the market changed and how volatile things are.

Returns since 08/09 ( many people would consider 3 or 4 years a long-term hold ) have been all over the place and extremely volatile, despite Anglo-Pac's generally excellent performance. That is the market doing things to the share price rather than APF enjoying a smooth ride as it may have expected on the back of its good performance in more stable/historic markets and times.

Irrespective of recent market and share price volatility, if China is slowing down as is clearly the case from all recent economic indicators, one would expect softening of coal prices and consequently less buoyant royalty fows from Anglo-Pac.

ALL IMO. DYOR.

QP

[piedro] 26/7/2012 12:50

Personally, I prefer a log-scale
giving a smoother ride ....


[Charts by Sharescope]

[piedro] 26/7/2012 12:45

QP,

This is a longer term chart



If you buy near the top it can be
painful till the next leg-up
[Growth = +28% since 1999]

[quepassa] 26/7/2012 12:17

Piedro,

Fair points.

Sadly, recent market developments no longer favour Long Term Holders in this or many other equities in my view.

That strategy has been a recipe for disaster with most shares since the Lehman crisis changed the financial world.

The new game in town appears to be Risk-On Risk-off.

Just look at the AngloPac graph above.


February 2011 360 p.

Oct 2011 240p (minus 30%)

April 2012 340p (plus 40%)

Today 2012 220p (minus 30%)

Those swings are enormous despite the recent strength and hitherto stability of AngloPac's royalty flows.


Whilst divi returns on Anglo Pac have been spectacular in the 18th months since Feb 2011, the capital return since then has been NEGATIVE 30%.


It is currently the froth and sensationalism which has a major (perhaps disproportionate) effect on the market. Whilst I may agree with your fundamentally correct view, it is hard to ignore the current highly volatile nature of the market which frequently pays little heed to fundamentals.

ALL IMO. DYOR.

QP

[piedro] 26/7/2012 11:34

QuePassa,

Iron ore has plunged from almost $150 per tonne in April/May to less than $120.

Lots of 'froth' and sensationalism - that's what you pay them for !!

LTHs should consider and be content with $120 per tonne (± $30) as the average Fe price which is much better than it used to be - IMHO

[quepassa] 26/7/2012 09:11

The article on Page 30 of to-day's FT headed " Poor Chinese demand sends iron ore to nine-month low" is telling you something important about current demand from China for this commodity.

Iron ore has plunged from almost $150 per tonne in April/May to less than $120.

The FT article continues:- " Commodities traders started to notice Chinese consumers of iron ore, used in steel manufacturing, and thermal coal asking to defer cargoes and in some cases defaulting on their contracts around May this year as economic growth slowed".

Certainly sounds to me like demand for thermal coal is not going to be as buoyant as in recent past judging by fall off in demand/price for iron ore.

ALL IMO. DYOR.

QP

[quepassa] 23/7/2012 09:29

Market sentiment has turned negative on this stock, irrespective of fundamentals.

Personally, I see this going lower than £2 in the coming weeks/months.

ALL IMO. DYOR.

QP

[piedro] 18/7/2012 13:50

You opened the ..... link ... ?

[mozy123] 18/7/2012 13:04

Cant see the charts.. :(

[piedro] 18/7/2012 12:36

Kestrel and Crinum production charts

[noslien] 18/7/2012 11:55

The Kestrel and Crinum assets generate about 2/3rds of apf income, so they are pretty critical. I agree with you that they will be difficult to replace. However current investment should extend the life by 20 years so there is no short term threat.

The critical point at the moment is the market for coking coal and iron ore, which maybe a bit soft in the near term.

I don't think they will cut the dividend, they have plenty of cash and a track record of steady icreases UNLESS there is a real drop down in demand in which case the share price would drop. The reverse is also true of course. So its quite balanced at the moment.

So I am not buying more or selling what I have at this time.

[trytotakeiteasy] 18/7/2012 10:31

Noslien.. thanks good point.... yes Q2 tough for commodities... I would of thought volume would offset price....in this instance as the sales in Q1 were very low... but I suppose it highlights the important point that the mine looks to be getting back on track... also Rio has longer-term plans to boost Kestrel output..

Agree price is the key driver.... not sure on this... all down to steel demand... so China driver..

you could be right too early on the stock.... there must be a real chance they would cut the dividend although on the Q1 results they appeared confident they wouldn't.... we shall see....

Longer-term.... I am not sure they will replicate the assets they have in production.... i.e. Kestrel is an outstanding asset.. by comparison a royalty agreement for London Mining's iron ore project in Greenland.... looks more risky and long-term with delays likely....

Overall though a tougher mining environment should mean they can do finance for projects on more attractive terms surely... but they need good Kestrel cashflows to achieve this...

[noslien] 18/7/2012 10:14

tryto .. good point. I read that volumes are up which should be good news for APF, but, on the other hand prices for coking coal are down in Q2 2012 from about 190 to 130. Remember APF gets 7% on prices up to $100 and 10% over 100, so the drop in price of 32% represents a drop in apf income of 38%. Not sure if that will compensate for the volume increase. A pretty fine call I think. So short term I am not expecting too much improvement in performance.

Just my three pennies worth

Noslien

[trytotakeiteasy] 17/7/2012 18:35

All .... Q2 for Rio isn't it positive on Kestrel production???? See below.



Trouble is we don't know how much of Kestrel is in AFP's royalty zone... but Rio reported production at the mine was 790,000 tonnes in Q2 as opposed to 300,0000 tonnes in Q1... also Q2 compares to 318,000 tonnes in Q2 2011..

any thoughts??

[nielsc] 13/7/2012 09:10

christh,

When you hold a share like this long term I don't particularly watch the price on a daily basis. I try and time my top ups to get more at a reasonably low price. Could be a good time to buy. I'll maybe keep my eye on them over the next month and see how things go.

Cheers,
Niels

[kipper62] 13/7/2012 09:04

Amazing how a 'slowdown' to 7.6% growth is viewed as a disaster. Can you imagine what that 7.6% growth means in terms of extra business in the world. Wouldn't we in the West love just the 0.6% growth? Time to panic is when they look as though they may get anywhere near our figures.

[fieldhouse] 13/7/2012 08:23

China slowdown is the name of the game IMHO

[christh] 13/7/2012 05:47

gavapentin 12 Jul'12 - 17:15 - 5814 of 5814

It was the bad weather that cause problems in Australia.The exports were affected but it has now improved.
New royalties are coming up so the profits and the revenue will be good.
Make sure you Buy them in your ISA to keep the taxman away.

Hope to be 300p by Xmas if not before with the commodities price rises expected.

DYOR

[gavapentin] 12/7/2012 17:15

Whatever is said on this BB, this has been a poor 4 months!
I do hope a turnaround is imminent

[haywards26] 12/7/2012 12:34

I topped up again this morning, hopefully the second half results shall be a catalyst for share price appreciation, with the reduced revenue/profits recorded in the first half being returned during the latter 6 months.

[nielsc] 12/7/2012 08:41

christh,

Has been nice picking up that ever increasing dividend over the years. I think the lowest I have bought APF is around the £1 level. So I'm sitting on a nice profit too. I think I'll still be holding this one in my old age :-)

Cheers,
Niels