Bushveld Minerals Share Discussion Threads

[parob] 11/12/2020 16:29

You are having a laugh right!?Simply Wall Street!LOL!

[zwift] 11/12/2020 16:20

Simply wall street article is not very complimentary about BMNs prospects

Have a read and see what you think

It might be old fashioned, but we really like to invest in companies that make a profit, each and every year. However, sometimes companies receive a one-off boost (or reduction) to their profit, and it's not always clear whether statutory profits are a good guide, going forward. This article will consider whether Bushveld Minerals' (LON:BMN) statutory profits are a good guide to its underlying earnings.

It's good to see that over the last twelve months Bushveld Minerals made a profit of US$29.7m on revenue of US$81.6m. The chart below shows that while revenue is flat over the last three years, the company has moved from unprofitable to profitable.

Importantly, statutory profits are not always the best tool for understanding a company's true earnings power, so it's well worth examining profits in a little more detail. So today we'll look at what Bushveld Minerals' cashflow and unusual items tell us about the quality of its earnings. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.


Examining Cashflow Against Bushveld Minerals' Earnings

In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. The ratio shows us how much a company's profit exceeds its FCF.

As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth.

Bushveld Minerals has an accrual ratio of 0.28 for the year to June 2020. Unfortunately, that means its free cash flow fell significantly short of its reported profits. Even though it reported a profit of US$29.7m, a look at free cash flow indicates it actually burnt through US$19m in the last year. We saw that FCF was US$45m a year ago though, so Bushveld Minerals has at least been able to generate positive FCF in the past. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio. The good news for shareholders is that Bushveld Minerals' accrual ratio was much better last year, so this year's poor reading might simply be a case of a short term mismatch between profit and FCF. As a result, some shareholders may be looking for stronger cash conversion in the current year.

How Do Unusual Items Influence Profit?

The fact that the company had unusual items boosting profit by US$53m, in the last year, probably goes some way to explain why its accrual ratio was so weak. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Bushveld Minerals had a rather significant contribution from unusual items relative to its profit to June 2020. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Our Take On Bushveld Minerals' Profit Performance

Bushveld Minerals had a weak accrual ratio, but its profit did receive a boost from unusual items. For the reasons mentioned above, we think that a perfunctory glance at Bushveld Minerals' statutory profits might make it look better than it really is on an underlying level. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 1 warning sign for Bushveld Minerals and you'll want to know about it.

Our examination of Bushveld Minerals has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

ATB Zwift

[zwift] 11/12/2020 15:45

Parob

As long as the share price keeps that pace, we all will be happy

[parob] 11/12/2020 15:30

Looking forward to 5%+ daily gains in the vanadium price. Copper, Iron and zinc all surging higher.Expect vanadium will follow suit.

[zwift] 11/12/2020 15:28

Nvh

I think Mau owes you an apology.

I dont think he will apologise though, He would have to admit the facts, that a flood did take place, it did interrupted production and it did cost a considerable sum to fix.

He would also be admitting that he didn’t know about the incident and this would be a contradiction to his persona, that he is the BMN Fountain of knowledge, a real wiseman amongst fellow investors.

In reality he just Alpha Chump and COs, lap dog, that goes around BBs ramping, lies and misinformation about BMN

At least you can hold your head high NVH

ATB. Zwift

[parob] 11/12/2020 15:21

Ferro Vanadium 80% Price USD / kgEurope : US$24.75/kg (+0.81%)Dec 11, 2020Will soon be over $25!Check out the chart. Looks like it might pop soon:hTTps://www.vanadiumprice.com

[parob] 11/12/2020 15:17

LGO's resistance was at $1.2Equivalent to...BMN's resistance at 15p.

[parob] 11/12/2020 15:10

LGO is off again! Currently up another 7%!Check out the LGO chart, then check out the BMN chart.They are pretty identical except BMN is lagging LGO by a couple of weeks.LGO has broken out of its trading range and it's really motoring.Expecting BMN to make a similar move once it breaks above 15p.

[nvhltd] 11/12/2020 10:38

Alex: Here is my initial post on the flooding:

“Zwift: I’m wondering if she has been forced out because of the flooding issue and lost production? Fortune said they were still investigating the issue that only affected part of the plant and cost several millions to repair”.

Doesn’t seem to be overblowing what we read in the RNS or discussed on the analysts call. No mention of flooded mine shafts or over exaggerating the costs.

[parob] 11/12/2020 10:13

The world's largest solar-powered, vanadium flow battery is coming to South AustraliaUtility-scale battery storage to deliver clean power on demand 11 December, 2020.Yadlamalka, South Australia will take centre stage in the race to decarbonize our global electricity system when the world's largest solar-powered vanadium flow battery (VFB) comes online there next year. In this pioneering project, a VFB supplied by Invinity Energy Systems will charge from a solar PV array and provide power to the local grid on demand.hTTps://invinity.com/australia-utility-scale-flow-battery/

[parob] 11/12/2020 06:15

Vanadium price recovery gaining traction with more increases overnight.hTTp://www.asianmetal.com/VanadiumPrice/Vanadium.html

[mauricegarin1] 11/12/2020 05:02

Or maybe you mean zar ffs facepalm 🤣🤣🤣

[mauricegarin1] 11/12/2020 05:00

Stuart but you said it’s costing millions to fix the plant didn’t you? now we all know that’s not true

[nvhltd] 10/12/2020 22:59

And here is an example of their fake news that they spout to their congregation.

Posted by Jimbo66:

“There is a great fear of BMN succeeding amongst a certain clique and it is growing. Apparently the Not Very Happy person on the Av site has been potentially libellously citing problems with flooded shafts(in an open cast mine) and senior management quitting, a cyclist calling themselves zwift has apparently infiltrated the new telegram BMN group and been publishing peoples personal info on AV”.

Now where have I ever mentioned “flooded shafts”? However if Jimbo66 would care to read the Q3 report or listen to Fortune in the analysts call he can hear about the flooding, which part of the plant it affected, the cost of repair and his thoughts on the root cause himself. Libellous? Pull the other one. And 39 other numpties voted that up. Surely someone would and should correct Jimbo66 and tell him to listen to the conference call.

[mauricegarin1] 10/12/2020 21:53

Zwift your pathetic

[zwift] 10/12/2020 21:38

Divmad
Alpha chump is the “ramper in chief” on the LSE board, he reports any post
he doesn’t like and get it taken down.
He and the other BMN Mafia have a secret twitter group, thats were they orchestrate
their buying and selling of BMN shares. But they never announce when they sell,
only when they buy, I think Gambit/ Mau is their lap dog

ATB zwift

[divmad] 10/12/2020 18:08

I see another Alfacomp share price prediction this morning has gone down the can.

[zwift] 10/12/2020 16:54

Parob.

If only you would have put your money in Largo, instead BMN

The Vanadium rises are coming off a low base and the $24.55 is not far from
Our break even point.

If the Rand/Dollar exchange rate changed against us, and we had reduced production due to covid 19, floods, or power outages Etc, we could be in some trouble.

Thats why we need to concentrate on ramping up production asap, instead of “vanity Projects” or Partial integrated VRFB partners

Just my thoughts

ATB Zwift

[parob] 10/12/2020 16:14

Europe : US$24.55/kg +0.41%Ferro Vanadium 80%

[parob] 10/12/2020 15:29

LGO currently up 10%!

[parob] 10/12/2020 10:01

#BMN - Excellent thread by @bigbitenow on #vanadium supply and demand. hTTps://twitter.com/BigBiteNow/status/1336956613656256513?s=20