Ferrexpo Share Discussion Threads

[bozzy_s] 21/8/2020 03:11

I've no problem with the occasional red day. If every company were valued 'fairly' there wouldn't be much money to be made by trading shares. No share trading = no liquidity = much wider buy/sell spread etc.

We know the reasons for FXPO being priced at about a 50-70% discount vs its peers. There is always a risk, whether negligible, slight or moderate, that shareholders make a loss of 100%.

On the other hand there's the reward of a huge annual dividend. And in recent months an increase in share price too. Plus the defensive qualities of a natural resources company, meaning it has been shielded from Covid-19 fallout.

While many companies have been hit financially and operationally by the virus, slashing and cancelling dividends everywhere, FXPO has had a strong year to date. The share price has risen from 159p to 192p, in addition to ~20p being paid in dividends (before Swiss Witholding Tax of course).

At that rate we need only wait a few years to recover our original investment in full.

And who knows, maybe with a bumper performance in H2 2020 that annual dividend might yet rise from 26.4c / 20p. And if that happened I expect the market would take notice and lift us above 250p.

[thags] 20/8/2020 23:10

Lodgeview
For now we'll have to settle for the dividend, possibly swing trade it but in time it should come good. Well I'm hoping anyway

[lodgeview] 20/8/2020 17:39

Why is this down from recent highs of around 213? Iron ore price record high. I know you have mentioned Ukraine corruption etc but still...This company is a cash cow, lowering debt and paying divi after divi. Surely it's worth a lot more that this!?

[bellbottom] 20/8/2020 16:25

Lots of red today lodgeview. Across the board and nowt to do with Ferrexpo.
In a few days time you may look back at a nice buying opportunity. But beware of the falling knife!

BB

[bellbottom] 20/8/2020 16:22

It's not over til the fat lady sings!

BB

[lodgeview] 20/8/2020 15:00

Iron ore price up and this is down 3.5%. You couldn't make it up could you ffs?

[mustau] 20/8/2020 14:38

Bell

Thanks for the clarity.

A level result here showed how keen they were to look after their own.

[bellbottom] 20/8/2020 14:16

Another day sees the price of iron ore increase.
Glencore and Ferrexpo both down around 3.5%

BB

[bellbottom] 20/8/2020 14:10

Mustau,

I wholeheartedly agree with you about UK corruption. Look at what happened with the last UK elections. But I was not discussing the UK here. I am more concerned, from a selfish point of view, about the corruption within the country where the mines are wholly based, that being Poltava, Ukraine. And in addition about the real threats from that other corrupt country, Russia.

Ukraine is improving and has improved since Zelensky became president but it will be a long and painful road that leads to a significant drop in corruption. Corruption had become a way of life, led from the top and filtering down to underpaid workers, who topped up their lowly salaries with small scale corruption that the big boys turned a blind eye to, because they were at it on a much larger scale.

Too many interested parties. Too many existing oligarchs with extensive businesses within Ukraine and without.

BB

[mustau] 20/8/2020 14:00

Bell,

No corruption in the Uk then?
The establishment the biggest corruption of all and u point your finger at Ukraine!

[zho] 20/8/2020 08:50

>>There's also one more thing to factor in - the 'pellet premium' for FXPO's products.>>

Well done bozzy_s - I'd forgotten that.

"As a result of the favourable characteristics of iron ore pellets over other forms of iron ore such as sinter fines, pellets receive a premium. This pellet premium averaged US$30 per tonne in 1H 2020, falling from US$67 per tonne in 1H 2019 due to changing market dynamics in 2020 relating to the global COVID-19 pandemic. For more information, please see section titled Financial Review." (H1 statement)

[r9505571] 20/8/2020 06:45

I use Barchart.com but remember FXPO stated in their last update that they will be using contracts for pellets so won't benefit from any increase in prices. It depends on what percentage they sell in contracts but my guess they will sell a large percentage at a contracted price to ensure long term profitability.

[bozzy_s] 20/8/2020 01:28

Zho, yes the margin is outstanding at the current price.

There's also one more thing to factor in - the 'pellet premium' for FXPO's products.

It seems this fell in H1, hence increased production and a strong I/O price still led to a small drop in revenue.

Hopefully in H2 the pellet premium has at least stayed firm, so we'll benefit from the higher I/O price.

Does anyone have a link for an up-to-date pellet premium price?

[lodgeview] 19/8/2020 15:02

So why is this dropping? The mind boggles. Why oh why?

[zho] 19/8/2020 14:55

Average 65% Fe price was $106/tonne during H1. FXPO cash costs were $40.9/tonne leaving $65.1/tonne margin.

Current 65% Fe price is $136.50/tonne leaving $95.6/tonne margin if cash costs remain the same, 47% higher.

[lodgeview] 19/8/2020 14:51

Disappointed with this share. Surely it should be northwards of 3 quid!?

[foxy22] 19/8/2020 09:46

Admittedly iron ore prices at ath

[foxy22] 19/8/2020 09:46

At least it went up look at glencore and retained its dividendAlso under scrutiny

[thags] 18/8/2020 16:53

A whole bottle of viagra would have no effect