Geiger Counter Share Discussion Threads

[andyforster1] 02/2/2019 13:58

Cameco has had its own news and Energy Fuels has risen off the back of its vanadium asset. The holders of the Physical commodity have risen strongly over the last 12 months due to the commodity price and this is where the decoupling of equities from spot has occurred. I personally put this down to URA as a major shareholder in the large Canadian developers Nexgen, Fission and Denison, GCL's largest holdings. The outflows from the ETF during tax loss selling period had a devastating affect on the bigger players thus causing the decoupling from spot. If you want your investment to replicate the performance of 5 stocks then put your money in 5 stocks but if you'd have told me 12 months ago spot would be up 40% whilst NExgen, fission and Denison trade at their yearly lows I wouldn't have believed you. Again, I'm not saying I'm happy with the performance but I can 100% understand why the portfolio is constructed the way it is.

[makeamillion1] 02/2/2019 11:38

Jonwig...I would not believe too much what miners say their cost of production is, while KAP may say they can extract Uranium at $20 lb the All In Cost of Production believe me is significantly higher. Plus KAP is moving from a capitalised subsidised company to a a shareholder driven model. This is precisely why they have reduced production the last 2 years by 20% and will continue to do so going forward 2 years as reported by the company yesterday and on Bloomberg. Needless to say I believe this company has significant upside which is why I also hold KAP.

I maintain that 90% of the Uranium miners & explorers require $50 - $60 to make a profit and will not consider production below this or restarting production. Cameco the worlds largest mine and one of the highest quality grades in the world has openly said they will not restart McArthur River until spot price is north of $40 lb, if spot price is above this level then long term contracted prices will be IMO in the range of $50-$60 plus.

The reason why companies publish the lowest cost of extraction is simply to make them seem more attractive to investors, it is not misleading as in situ and open pit mining is clearly less cost than underground mines but the grade of Uranium is also a high denominator in the overall cost. But these costs do not include total costs!

The top 5 /6 companies GCL hold are very good companies and those seeking an easy way into U investments will benefit and will not loose IMO by holding these. Those that wish to do more DD may take a different approach.

[bmcb5] 01/2/2019 17:59

Good discussion on here, after weeks of no posts.

I'm broadly in agreement with all of you :-)

KAP does have a lower cost base, but that is at least partly down to the huge devaluation of the Tenge over recent years aiui. I go along with the view that the majority of producers need $50+.

Collectively, you've highlighted the downside of this as an investment, and it's good that we have a board where it can be discussed maturely. Gains will be lower due to fund size constraints and management charges. But against that, it is a simple (and in my view low risk) way to gain sector exposure.

[quepassa] 01/2/2019 17:53

So what you are saying is that basically

APART FROM, AND REMOVING FROM THE EQUATION:-

CAMECO +60%
EFR +120%
URG + 50%
YELLOWCAKE +15%
PHYSICAL HOLDING COMPANIES +15%
Can$ + 10%


Geiger at + 0% over two years is doing fine!!!!

You have effectively excluded 75% of the investable uranium sector.


In which case, as measured against the bottom 25% of the sector ( and ignoring the top 75% of the sector and currency gains ) I fully agree that Geiger is doing fine.


Good Luck.

ALL IMO. DYOR.
QP

[andyforster1] 01/2/2019 16:52

I think @makeamillion means any new mine will need $50 plus to come online. I believe 70% of current world production is currently unprofitable.

[andyforster1] 01/2/2019 16:46

It's not a case of if I like the funds performance it's about you saying the performance of the management is terrible considering It hasn't matched Cameco. Besides EFR, URG, Cameco and the physical holding companies. The rest of the sector is sitting at the lows so unless the fund consisted of probably 5 names it would never match your bellwether.

[jonwig] 01/2/2019 16:40

@ makeamillion - cost of production is above $50-60/lb. Really? KAP is profitable around $20. BKY in Spain even lower (if/when it can actually produce).

The whole point about buying miners over metal is the gearing: successful ones will make levered gains over the price, unsuccessful ones won't be able to afford the capex.
So an IT of U miners needs to do the right stock picks, and buying GCL is an act of trust that they will deliver that. Maybe yes, maybe no.

For myself, I've a big holding in YCA (which won't deliver geared returns) and a smaller one in KAP (which probably will but has a political angle).

[makeamillion1] 01/2/2019 16:28

Unfortunately GCL has very very little liquidity & volume, I have held these but when I noticed the high fees and additional performance fee I took what little profit I had and remain in the only global USA ETF URA. I also hold these in a SIPP.

I have held URA for a few years, as well as numerous U stocks. I have also received (except last year) very good dividends and the fees are only 0.69% from the fund per year.

IMO contrary to many who have been critical of URA rebalancing their portfolio over the last year they are now much more attractive to institutional and private investors.. They hold 60% of U Miners, explorers and physical holders of U308 and the remaining 40% is with Nuclear industry such as reactor manufacturers who have actually performed very well. To give the ETF a lower risk profile they also have 4.8% in Gold.

When investor sentiment comes back which again in IMHO will be soon especially with s232 progress to be announced by April 2019 and whatever the result utilities worldwide have not been buying awaiting the result...that is why the Spot Price has gone up circa 40% leaving behind U companies which is almost unheard of.

Spot Prices have to rise at least to cost of production which is north of $50-$60 lb. Pretty much double where they are now! At those levels expect to see many shares at least 6-10 times current values. Research 2007 & 2011 spot price graphs of Uranium and individual stocks such as URA & those held by GCL.

IMO at some point during 2019 the U sector will start to see share rises similar to 2007 / 2011 and the share graph will mirror those times...really its like a Bitcoin share price movement. This is a classic contrarian play and volatility can be significant rising exceptionally fast but also fall harder.

There maybe a fortune to make, I certainly believe so but I am also reminded of a quote from Cornelius Vanderbilt

"Any fool can make a fortune. It takes a man of genius to keep it after it's made" GLA

[quepassa] 01/2/2019 16:27

Everything cool.

If you are happy with Geiger's performance, that's great. Go for it

Good Luck.

PS.

TWO THINGS IN CLOSING:-

1.

Cameco isn't the only one which is UP

NexGen (WHERE GEIGER HOLDS 16% AND IS THEIR BIGGEST PORTFOLIO HOLDING)

30/1/16 C$ 1.61
Today C$2.25

UPLIFT + 40%

2. Please think carefully about what you just wrote about the pound being DOWN vs C$.:-

" I don’t see you mentioning the £ is down 10% vs CAD where 90% of the fund is invested."

This should be HIGHLY BENEFICIAL TO A FUND INVESTED MAINLY IN CAN. DOLLARS:

SO EVEN WITH A MASSIVE 10% GAIN DUE TO FAVOURABLE CURRENCY MOVEMENTS, GEIGER STILL CAN'T DO BETTER THAN REMAIN FLAT OVER MORE THAN TWO YEARS.


YOU SEE THE PICTURE DOESN'T STACK UP:-

CAMECO + 60%
NEXTGEN + 40%
C$ +10% vs GBP

GEIGER + ZERO%

[andyforster1] 01/2/2019 15:52

Thanks for the updated model it looks very well thought out so thank you. With regards the fees, it was about paying brokerage fees, fx fees and the duty personally, but yeah I guess the fund will also invoke most of these also. My broker also doesn't offer many of the indices that the Uranium equities are listed. I don't think the vehicle is "cheap" but I don't believe the managers to be doing the wrong thing. I look at the portfolio and with the exception of I'd like more US exposure I can understand their thinking.

[quepassa] 01/2/2019 15:43

Hang on.

Yes. That's just it. Exactly. The one and the same.

Cameco heavily influences the whole uranium sector just like Rio and BHP Billiton do in other mining sectors. They are the biggest and what they do - such as mothballing MacArthur and winning tax rulings- does indeed influence the whole market, with a magnified impact on themselves.


Cameco is the bellwether. I don't think many would question that. Read this:-




And indeed , Cameco was of such importance to Geiger that for a long time it was right towards the top of Geiger's biggest investments (8.4% in 2016) until they unwisely and at the wrong time started to reduce their Cameco position.

I could go on...


Good Luck, I hope it works out for you.

ALL IMO. DYOR.
QP

[0x3f] 01/2/2019 15:30

Hi Andy,

>I like your calculations but I would question your fee structure. I’m sure you
>wouldn’t be holding the same stocks for the whole 10 years and your projection
>of a 500% uplift over that time goes against all the research that’s out there.

The fee structure is one of the more concrete items in the calculation, looking at their KID appears to confirm it's currently in the 3+%/annum range. Not sure what you mean regarding not holding same stocks over the full period? possibly you mean additional(fx/brokerage) fees, though Geiger would have the same problem. I guess I could have to pay tax on any forced sales (takeovers) if not in ISA.

I agree with the 500% being sooner rather than later, I just randomly selected it. If condense it to 5yrs, the forecast doesn't get any better. In fact, the performance fee can be seen as obscene (I've checked their listing docs, and there doesn't appear to be a cap on it).


Amount £100,0005yr Ret 500% (Ret/Yr=37.97%)Geiger Prem 12.65%Fee 1.38% Perf Fee 5.99% (20% of amount over 8%)





Yr 0 £87,350 £99,000Yr 1 £114,078 £136,593Yr 2 £148,984 £188,462Yr 3 £194,570 £260,026Yr 4 £254,105 £358,766Yr 5 £331,858 £495,000




I take your point about funding juniors etc. Likely their performance would be better but, after fees, they've a lot of ground to make up.

My view is that it is a bit of a pain buying shares directly, only one of my brokers allows me to buy Canadian shares. The liquidity of some of the shares has also made buying them directly difficult with no online quotes/large spreads. Geiger is the easy option, but not cheap.

-0x3F

[andyforster1] 01/2/2019 15:12

Is this the same Cameco who won contracts to supply Bruce Power ?? The same who won a landmark tax ruling ?? The same Cameco that shutdown their biggest mine?? Oh yeah because that's the basis for what the whole sector should have done. Please. I'm not saying Cameco wouldn't have been a great investment but you cannot say it is the bellwether for the whole sector as it has had its own news lead rise.

[quepassa] 01/2/2019 14:33

Under-researched, I don't think so......read this

Any uranium fund should at least be expected to be able to keep pace with the sector bellwether which is Cameco and which is not some fly-by-night junior unranium miner.



As at 30th. September - Percentage of Geiger Net Assets invested in Cameco

2016 8.4%
2017 6.0%
2018 4.7%


September 30th prices for Cameco

2016 C$ 10.30
2017 C$ 12.05
2018 C$ 14.10


CURRENT CAMECO PRICE CS 15.92


BETWEEN 30/9/16 and NOW, CAMECO IS UP 55% (PLUS DIVIDENDS)



BETWEEN 30/9/16 and NOW GEIGER IS FLAT. IT WAS 20p in SEP 2016 AND NOW STILL IS 20p.



GEIGER SOLD circa 50% of THEIR CAMECO HOLDING AT THE WORST POSSIBLE TIME.

CAMECO IS UP ALMOST 60% SINCE SEPTEMBER 2016 INCLUDING DIVIDENDS.

GEIGER IS UP ABSOLUTELY ZERO. ZIPPO.

MOSTLY DOWN TO POOR PERFORMANCE ON THEIR INVESTMENTS BUT SIGNIFICANTLY ABETTED BY TOO MUCH EQUITY ISSUANCE/DILUTION AND EXORBITANT FEES.


There is no excuse for such jaw-dropping underperformance.


ALL IMO. DYOR.
QP

[andyforster1] 01/2/2019 14:08

I like your calculations but I would question your fee structure. I'm sure you wouldn't be holding the same stocks for the whole 10 years and your projection of a 500% uplift over that time goes against all the research that's out there. If this uranium cycle is going to fundamentally change, it's going to happen within the next two years. If this happens you can compress your 500% gains to within 5 years which seriously changes your fee forecast. Everyone's entitled to their opinion but hey ho. I like this vehicle for its ability to participate in funding the juniors and pre market companies whilst collecting warrants. DYOR and good luck

[andyforster1] 01/2/2019 14:00

High quality assets like NXE, DML and FCU all trading at the bottom of their ranges in this market is perplexing. I wouldn't blame the management team here I'd blame the URE etf for making a hash of its realignment project.

[andyforster1] 01/2/2019 13:52

Wow, some serious under researched people here. GCL holds Cameco shown in the yearly results. This is a uranium fund not a catch 1 stock that goes up 20% but buying the best in the sector of which there are few. To say an illiquid small cap might go up 40% is fine but how do you expect GCL to buy illiquid small caps with there purchasing power. Tell me, do you have access to placements to fund these juniors because there going to need it and GCL has that optionality. This is a one trade investment vehicle in the uranium space not a buy the next pump and dump stock that will do a discounted placement. Nobody's mentioned the KAP ipo that GCL participated in that's up 30%. If your after trading opportunities this isn't for you. If your after a longer term diversified investment vehicle then this is right for you.

[quepassa] 31/1/2019 15:47

Absolutely. Much cheaper and more effective to buy direct.

But the real rub is their appalling stock picking skills.

They sell Cameco which goes + 50%

They buy Berkeley which goes down - 50%

They just don't know what they are doing except raping the fund for fees and expenses.


All my other U3o8 investments have increased between 20 - 60% last year except GCL.

Even newcomer Yellowcake has trounced GCL's bottom-drawer performance in just six months.

ALL IMO. DYOR.
QP

[0x3f] 31/1/2019 15:30

With the premium and the significant fees, they get to keep quite a bit. With their top 5 or so holdings >50% of portfolio, it's quite tempting skip the premium/fees and buy direct.

I had a quick go at trying to quantify the difference. My assumptions were:


Amount £100,00010yr Ret 500% (Ret/Yr=17.46%)Geiger Prem 12.65% (???)Fees 1.38%Perf Fee 1.89% (20% of amount over 8%)XRate fee 1.00%



I then came up with the following:


Geiger DirectYr 0 £87,350 £99,000Yr 1 £99,745 £116,287Yr 2 £113,898 £136,593Yr 3 £130,059 £160,445Yr 4 £148,514 £188,462Yr 5 £169,588 £221,371Yr 6 £193,651 £260,026Yr 7 £221,129 £305,432Yr 8 £252,507 £358,766Yr 9 £288,336 £421,413Yr 10 £329,250 £495,000



Yr0 include Xrate fees for buying shares direct, and for Geiger Counter subtracts the premium. Geigers smaller holdings would probably outperform, so maybe their return would be better or maybe they stay on a premium after 10 years (so my initial amount wrong).

All very approximate, but gives an idea - In this example the direct shares investment amount is 50% more!

-0x3F

[bmcb5] 31/1/2019 13:06

I agree dogberry. share price performance across the sector has been poor over the past year. I'm relaxed, and confident the returns will come. I'm back to breakeven here, but I won't be topping up. I'm happy with my current holding, and waiting patiently. I still like the simplicity of this vehicle, giving me exposure across the sector, without needing too much research. If they outperform the market, then i'm ok with letting them keep 8% of the outperformance.

[dogberry202000] 31/1/2019 11:11

The time for U is coming but it may be at least a few weeks or so, yet. I like the holdings in GCL. Only a few quality U companies survive and the Fund holds these. NXE (NEXGEN) is a premier quality holding. URA is no longer purely a U fund.

The Fund went into defensive mode with Cameco over the long term tax case that the court found in Cameco's favour, only for the CRA to appeal.

There are golden crosses in CCJ, URG and UUU. If it takes place, Denison is a few weeks away from a golden cross. FCUUF is at the bottom of its channel with little or no meaningful downside left there. The Open Contracts for March is the largest for the entire year. So March is important and April seems also signficant. The PM sector is slowly beginning to break out and U is a few weeks or a month or so behind.


Patience is needed here. BTW I added under the price today at 19.35p. All the U companies are bargains right now and do not reflect the price action in U.

[escapetohome] 31/1/2019 08:56

An abysmal performance gieger counter.

How much are we payin u?

(rising tone of astonishment)

[quepassa] 30/1/2019 15:25

Kenny, the NAV hasn't gone up primarily because of the fund's underperforming uranium investments. The fund managers are meant to be able to spot good uranium investments not a bunch of underperforming investments.

They sold their holdings in Cameco 12 or 18 months ago. Timing on that disposal could not have been worse.

A monkey throwing a dart could do better than Geiger in my opinion.

ALL IMO. DYOR.
QP

[jonwig] 30/1/2019 14:38

Kenny, I assume you're aware of the peculiar situation of the Uranium market (ie. the price of metal and its relation to contracted supply)?

If so, there is a huge wall of money waiting to enter the market, either towards spot metal or miners which could (according to the bulls) propel the better miners to multiples of their current prices. Whilst the bull case has been weakened because the breakout is late (sort of) or won't happen (possible) the current share price premium here is well-explained by the fundamentals.

My own problem with GCL is what you're aware of - the opportunistic share issues at a premium and their charges. There are other and better ways to play the uranium market. (I hold YCA and KAP. But that's not a recommendation.)