Capital Share Discussion Threads

[deanowls] 10/9/2024 06:30

Just been googling and there’s also another investment jointly with them three days ago for sanu gold shares.

Seems there’s another investment to keep an eye on.

[studentinvestor13] 10/9/2024 06:11

Interesting!!

Anglogold are bidding for Centamin, both of these are well established CAPD customers with whom CAPD have good relationships

I have long been waiting for gold prices to drive the next leg of growth for gold producers. M&A may spell the start of that

Reading the details

"AngloGold Ashanti intends to invest in Sukari's growth through further exploration and development, both within the Sukari concession area as well as in the immediately adjacent EDX blocks, that could further extend life or increase production."

If leveraging Sukari better is a key part of their rationale, it could well be positive for Capital with more work flowing in their direction. It sounds like it is because I doubt they care about the small and early stage Doropo and ABC projects CEY has

[alangriffbang] 03/9/2024 12:21

phillis LOL

[phillis] 03/9/2024 12:19

They are struggling with growth
Need to get on top of things quickly and prove they can handle more complexity in the business model

[deanowls] 03/9/2024 07:10

My concern is the USA takes up a large portion of working capital and that there are cost overruns etc or salaries higher than projected.

[adamb1978] 03/9/2024 07:06

Hi Fozie

I top sliced a little in H1 and was on the verge of selling the remainder however the deleveraging via the investment disposal and sale of the Sukari, possible buyback as well as the other value fund coming on board have made me hold on for longer. The lower leverage will have a nice impact on EPS, particularly given that hopefully with a less emerging market cash flow exposure, they get better rates too.

My concern from a valuation perspective is that the comps all trade on awful multiples. Makes it harder to believe in a re-rating unless they can re-spin the equity story. Absent that, they need to use the cashflow to attract investors.

Adam

[hpcg] 03/9/2024 06:59

What a moronic and facile statement to make. It is like the success of the US markets versus the continuous decline of London market is a mystery to these people. Buybacks create liquidity. They encourage investors to buy because there is always a bid in the market. They reduce the spread because there is always a bid in the market. They increase the share price which encourages some selling. Rising prices create interest in a stock.

On the other hand if you want illiquidity the perfect recipe is stock that is cheap on a range of value metrics but has no momentum in the share price.

I am more than happy for the company to invest in growth. If by doing so it does not have any capacity for investor returns so be it. What I can't fathom is that when a company has surplus capital and trades below book it chooses not to invest in its own stock. There hasn't been surplus capital here for a while now, but when there is some sensible decisions on its allocation need to be made.

[fozzie] 03/9/2024 06:44

Going nowhere fast here and the board need to start and get their finger out and create some shareholder value pronto. I can only comfort myself with the ‘undervalued’ narrative for so long. The liquidation of part of the share portfolio has done nothing for the share price as yet.

[adamb1978] 03/9/2024 06:26

If that's what they mean then their analysis is wrong.

Last 3m ave daily volume here is 169k shares. Lets say that CAPD bought back 20k per day, and c.250 trading days per year then thats c.£5m in round numbers (100p per share).

Taking just over 10% of the liquidity out of circulation via a buyback won't be a problem, and £5m is probably the more than CAPD would do a in 12 month buyback given how resistant they've been about one before

[studentinvestor13] 03/9/2024 05:51

Adam they mean stock liquidity i.e. trading shares liquidity not financial liquidity

[studentinvestor13] 02/9/2024 22:57

So this is a stock well below NAV that is being forecast to do a 20% free cash flow yield next year ($45m)

make it make an ounce of sense.

[adamb1978] 02/9/2024 21:28

New Tamesis note available on Research Tree today. They're quite aggressive on the deleveraging - will be pleased if that happens, alongside the reduced geographical risk. They dont like the idea of a buyback though, citing liquidity constraints....which seems a little odd given their projections of net cash by FY26

[cheap investor] 28/8/2024 20:05

Their factsheet showed a substantial holding at the end of June.

Notifiable at that time, by my calculations.

[phillis] 28/8/2024 15:07

What took them so long then?

[studentinvestor13] 27/8/2024 19:07

Not just a value fund.

A US based value fund has found its way into a UK listed small cap.

"Since its founding in 1998, the Aegis Value Fund has consistently adhered to a deep-value philosophy, focusing on securities trading in the lowest quintile of the stock market on price-to-book value."

CAPD fits the bill squarely. Silly cheap stock at a massive discount to NAV that is investing in some really exciting growth areas while the market is fast asleep

Since inception almost 20 years ago the Aegis Value fund has annualised 11.05% per annum, better than the S&P 500 at 7.8%. Tech took some shine off the last few years, but over the last 4 years, the CAGR was 20.75% compared to the S&P 500 at 15.7%

They know what they are doing

Bargain stock below NAV IMO which is all the way up at 107p

[rivaldo] 27/8/2024 13:27

Agreed, great to see a value fund buying in here.

[adamb1978] 27/8/2024 10:31

Thinking about it further, given they wouldnt have accumulated that 5% position overnight, I wonder whether they've been speaking to the company in the background and hence the sale of the PDI stake and comments about buybacks post the Sukari equipment sales?

Either way, I think their presence and subsequent influence could be very positive for the share price

[adamb1978] 27/8/2024 10:00

Well, thats interesting. A deep value, small-cap fund taking a 5% position:

hxxps://www.aegisfunds.com/about-our-firm

Hopefully they'll agitate and push a greater focus on value creation

[adamb1978] 26/8/2024 19:09

If CAPD disappeared from the public markets, there would naturally be less disapproving from a lot of people compared to other, say, small tech or pharma companies disappearing given that CAPD really isn't a UK company.

So it wouldnt be as if a foreign acquiror was buying a small UK company with UK-developed IP and UK-operations. CAPD's CEO (sorry, Chair, to use his preferred title) is an Aussie and I dont believe spends much time here, they have a skeleton office in the UK and due to their business have no operational assets in the UK. There wouldnt be much/any damage to UK plc if it was acquired.

Obviously seeing companies vanish from the LSE isn't great, but thats a separate point. We need more IPOs here and then the net change in terms of number of listed companies wouldnt be as meaningful. THere's plenty more options though for companies to raise capital private compared to 10-20 years ago and less of a reason for companies to go public.

[davebowler] 26/8/2024 18:08

I've mentioned this as a bargain on the GPM thread.

[studentinvestor13] 26/8/2024 13:27

UK investors do not have a right to complain if Capital get bid for. Miserable bunch on the whole undervaluing so many good businesses (not people here)

Capital YTD -3%
Gold +24%
Peer average move 21%

[hpcg] 21/8/2024 11:29

I'd hazard a guess the price of Predictive is up because there is no longer a overhang from Capital's holding. Of course it might be an alternative bidder is considering action now that Perseus has shown its hand, but I'd favour the former over the latter.

[fozzie] 21/8/2024 10:14

Would have been better if we still held and were selling now at .28

[robsy2] 21/8/2024 09:49

Well spotted Gleach. A good deal for CAPD. They seem smart and sensible folk. I am confident of a good outcome here. The rating is very miserly.