Anglo Pacific Share Discussion Threads

[quepassa] 30/9/2014 14:57

Thank you for your post, to which I would like to counter.

Being in the list of highest yielding shares is not necessarily a badge of honour. Certain investors may or may not take inclusion in any such list as a red warning light.

For example, ranked immediately beneath Anglo-Pacific in the Telegraph list is Balfour Beatty who disappointed the markets yesterday with a fifth profits warning in 2 years. Their shares plunged 25%.



There is normally a story why these shares rank in the highest yielding lists. And not always a positive story.

ALL IMO. DYOR.
QP

[bhoddhisattva] 30/9/2014 12:50

APF gets mentioned in Telegraph as one of 12 stocks that are bombed out and due a recovery:

www.telegraph.co.uk/finance/personalfinance/investing/shares/11123470/Share-tips-the-12-bombed-out-shares-most-likely-to-bounce-back.html

The 10 highest-yielding shares

[quepassa] 30/9/2014 09:40

When I read articles like this from earlier this month, it makes me wonder about the great lengths which Rio is going to in order to cut costs at Kestrel ( and other mines ).




ALL IMO. DYOR.
QP

[rcturner2] 24/9/2014 09:07

I used to hold this in the past and like others note the recent falls. Reading the thread, QP asks the question "why pay the dividend out of assets not income?".

I think the simple answer is that the directors would prefer to maintain the dividend through tough times as a policy decision. You cannot of course continue to pay a dividend out of assets for ever, but if the drop in income is temporary, then this is acceptable (or acceptable in the minds of the directors at least).

[bolador] 23/9/2014 10:09

This looks like fund selling to clear a bad position by the end of the quarter,
price becomes irrelevant in this sort of stable cleaning operation. Certainly any issue of stock is kyboshed. APF could always offer the Kestrel royalty back to Rio to create a cash shell ?

[haydock] 23/9/2014 09:16

I have moved on, just a few left, after 10 happy & profitable yrs.
Simply new fish to fry with bigger, upside / down side.

I will watch & wait for a change.
Cheers Hay.

[sigala] 22/9/2014 21:26

Hi SB,

What I'm looking at is that at the current share price then APF are only valued by the market at about 83% of just their book value.

So, if they issue shares at this price the market will only give them 83p for every £1 of true value that is sold.

Or to put it the other way round, if APF use the devalued currency of their shares to buy assets then they will end up paying £1.20 for every £1 of what they buy.

Buying £1 coins for £1.20 is not great business at the end of the day.

And that assumes that the shares are issued at today's closing share price If they are issued lower then APF will be paying even more for the pound coins.

The only way this could increase APF's intrinsic value is if the sellers of the assets were making an even bigger misjudgement, and were selling their pound coins for, say 50p. But it seems a bit hopeful to assume the vendors don't know what they're doing and are substantially under-selling their assets.

JMHO, regards.

[stevie blunder] 22/9/2014 20:59

Hi Sigala,
I hear what you say, and would normally agree.
But.... They have no choice as they cannot do the large deals they want to do without equity issue. I think it is that simple. A cut dividend would not be enough, but would drive the share price down and mean more dilution.

If we look at the Vanadium deal in June, they issued shares to acquire a royalty yielding about 13% on purchase price. With the shares yielding 5% (at the time) that was value enhancing (if all goes to plan)

If they can do larger deals with similar arithmetic I would be pleased.

We'll see.

[neilyb675] 22/9/2014 20:58

Evraz (EVR) 123.50p -14.83% ( I sold at 133p, last week)

[quepassa] 22/9/2014 20:52

Commodities slump to 5 year low and China damps stimulus hopes.
Not a good day for commodities. Not a good time for commodities.
APF was not singled out for special treatment today.
Glencore down 5%. Rio down 4%



can't comment on any placing but if so, it would further add to the aleady heavy dividend burden faced by the Company.

ALL IMO. DYOR.
QP

[neilyb675] 22/9/2014 20:51

The continual fall (daily) for the past week is concerning. I take on board the "placing" comment above as with other shares when there is a placing you get a downward trend to the or near the placing price - the market knows before the announcement. I hope the transformational deal is worth this current pain.

Yield is now over 7% so should be attracting income investors.

I'm waiting before doubling up.

[sigala] 22/9/2014 20:17

Stevie Blunder at al,

Haven't posted here for a good while, surprised to see how far this has fallen.

Stevie one thing in your post stood out for me..... you say that APF are looking at new deals and expect to issue shares to fund the deal(s).

IMHO that is a surprising strategy. If we accept for the sake of argument that APF's shares are currently undervalued from a long term perspective (at the moment there are a lot of short/medium term negative factors depressing the sp), then to use the devalued currency of the shares to pay for new acquisitions is not suggestive to me of a good understanding of creating long term shareholder value.

I do not currently hold APF, but if I was a holder I would prefer to see a cut in the dividend and the cash saved used to fund deals, rather than issuing lots of shares at a real low point in share price.

Just my tuppenceworth.

[gavapentin] 22/9/2014 19:52

Price drop.... whilst could be down to just investors moving elsewhere/jam tomorrow/dividend (you will note that QP)/Kestrel/sector etc etc......could it be that word has slipped out about a placing at a certain price? Mmmm

[gavapentin] 17/9/2014 12:23

Timing - that is all..
That is the real shame.

[rrr] 17/9/2014 11:19

I'm with QP on this - it does seem odd to maintain the dividend at the expense of the asset base. Whether QP's a shorter or not doesn't affect the strength of the point he's making - that's what needs an answer.

[quepassa] 17/9/2014 11:12

complaining about/decrying other people's posts.
you used to have some really interesting things to say. what a shame.

ALL IMO> DYOR.
QP

[gavapentin] 17/9/2014 11:04

I know you are regular - it is the timing of posts.
And if that isn’t a counter, I don’t know what is!

[quepassa] 17/9/2014 11:00

as I have said before, I am not short.

You need to check the frequency of posts. I am a regular poster. Not an infrequent poster.

By the way, I didn't "counter" anything. He's right. The yield is good. It's great. It's almost gravity-defying.

ALL IMO. DYOR.
QP

[christh] 17/9/2014 10:30

QuePassa
17 Sep'14 - 10:10 - 6690 of 6690

There's no point moaning and shouting here.

If you are so concerned call the company investors relations officer and say so.
OR
email them!

Problem solved.

[gavapentin] 17/9/2014 10:29

QP - whilst I concur with some of your points, and disagree with others, it is a little strange to me that as soon as a "positive post" appears, you crop up with a counter.
I presume you are short.

[quepassa] 17/9/2014 10:10

I refer to my my remarks laid out more fully in post 6681 above, of which this is an extract:-

"Perceived wisdom is that you pay dividends when you make profits. Perceived wisdom is that you don't pay dividends when you make losses.- A dividend is after all by definition generally meant to mean a share in the profits of a Company."

We know that APF management have frequently stated that they wish to maintain their current dividend strategy.

However, at a time when:-

1. The Company is loss-making
2. dividends have recently meant a reduction in the asset-base of The Company in order to support the dividend policy
3. APF have forewarned about a major forthcoming reduction in income from their hitherto largest income-producing Kestrel,

I think it is now incumbent on the management of APF to explain fully the rationale and thinking behind manintaining this strategy in such straitened times.

Not just to reaffirm that they are doing it. But WHY they are doing it.

I think it is now incumbent on APF management to explain fully to shareholders why it is :-

1. In the best interests of the Company to pay dividends when APF is loss-making.

2. In the best interests of shareholders to pay dividends when APF is loss-making.

3. In the best interests of both the Company and shareholders to countenance reducing the asset base of the Company in order to support the dividend.


ALL IMO. DYOR.
QP

[neilyb675] 16/9/2014 19:08

I've taken a small position here. I like the business model and the yield is good. I have watched these trade at much higher prices in the recent past (£2.30). I believe in buying in chunks - on any weakness. GLA

[haydock] 08/9/2014 11:15

Not an exciting outlook at the moment.

[bolador] 05/9/2014 12:10

The directors are substantial holders of stock as pointed out above. They must be aware of running the nav down by paying dividends. However there was obviously a great deal of doubt about many of the components of the nav and the new management have thrown out all the dubious numbers and started again hence big non cash losses.