Gem Diamonds Share Discussion Threads

[nehpets81] 21/8/2015 15:41

This is an interesting one. The performance at Letseng seems to be very robust - the prices for their diamonds still seem to be fairly good, although they have slipped a bit. It also seems like most of the upgrades have now been completed so there will be less cash going on capex at the plant going forward.

Ghaghoo is another kettle of fish entirely though, problems with water ingress on the construction side and really poor prices realised at the last auction. I see management have stated this was due to lower quality diamonds being sold so the next auction of Ghaghoo stones where the "higher" quality diamonds are sold will be very interesting I think.

There is still plenty of cash and some headroom in the debt facilities but any further reduction in prices of the Letseng diamonds could really hurt GEMD as it is definitely carrying the other mine at the moment.

[salpara111] 19/8/2015 17:58

The stock is cheap but there is a good reason for that.
I guess it really comes down to whether you believe that demand is going to improve in the next year and personally I don't so I will look to exit as soon as I identify another target for the money.
We are about to see a turning in the credit cycle and that means trouble for the big emerging markets where they claim the additional demand is going to come from.
This has turned into a classic "Jam Tomorrow" stock for me and after more than a year of holding I am now most likely to exit with a loss despite only having a buy in price of 141.
If they do turn the corner I would certainly look to reinvest but there is no point is sitting waiting for another year or more for it to turn the corner.

[alan@bj] 19/8/2015 17:43

Investors Chronicle updated its view this afternoon. The summary reads:-

"Management expects to increase throughput substantially at the Ghaghoo pit during the second half of this year, but they may opt to hold back on selling consequent production to the back-end of this year if prices have not recovered sufficiently. The shares are trading at an undemanding 8 times forward earnings. We maintain our buy advice."

[cestnous] 19/8/2015 08:43

Personally, I do tend to the idea, "buy something that is going up, rather than something that is cheap." GEMD is certainly cheap and there is obviously a reason for that, though I'm damned if I can figure out what it is.

[undervaluedassets] 19/8/2015 08:16

creditable given pricing environment.

Letseng still churning out pigeon egg sized stones

profitable - cash rich and cheap.

[cestnous] 12/8/2015 16:28

Couldn't find anything nehp. (Don't hold atm. but would buy on good news which this stock seems to be shy of.)

[nehpets81] 12/8/2015 15:57

Has anyone seen a research note by GMP Securities? On TDDirect they are giving an EPS for 2016 of 3.85. I was wondering if that is a mistake or otherwise how GMP have arrived at that figure.

It doesn't compare well to the FinnCap figure of 19.84!

[salpara111] 03/8/2015 09:05

My main beef is the fact that management has consistently failed to convince the market that they should trade on a par multiple with their direct peers like PDL.
I struggle to know why I am continuing to hold but I guess I am taking the view that as long as there is cash in the bank and they are still profitable ( assuming there is nothing unknown in the upcoming results)the enterprise value of the business is really very low.

[ards] 01/8/2015 12:25

gets mention in shares who say that weakness in diamond shares mild compared to bloodbath else where. gem diamonds still favourite pick.

[jovi1] 31/7/2015 19:41

thanks Alan

i post too just in case someone what to know




Major Interest in Shares

On 6 March 2014, the following major interests (at or above 3%) in the issued ordinary shares of the Company had been notified to the Company in accordance with the DTR 5:


Shareholders

Number of
Ordinary Shares

%
Shareholding


Graff Diamonds International Ltd

20,906,699

15.12


Lansdowne Partners Ltd

20,721,413

14.99


Gem Diamonds Holdings Limited

9,325,000

6.74


FMR LLC

7,776,396

5.62


Capital Group Companies Inc.

6,855,495

4.96


BlackRock

6,317,181

4.57


Lazard Asset Management

4,874,803

3.53


Norges Bank Investment Managers

4,733,934

3.42


Norges Bank Investment Managers

4,478,598

3.24


Fidelity International Limited

4,451,132

3.22
Majedie Asset Managers

4,180,971

3.02


State Street Global Advisors

4,171,898

3.02

[alan@bj] 31/7/2015 19:06

You'll find them on www.gemdiamonds.com > Shareholder Services > Major Shareholders
I'd have copied/pasted them into this post but I'm on an iPad at the moment.

[jovi1] 31/7/2015 18:48

do we know who are the main investor and %?

[alan@bj] 30/7/2015 17:21

Just like it did for him with Tesco

[ards] 30/7/2015 16:15

why are guys surprised by weakness given commodity slump and weak gem prices. the real questions are: is it good value; is it profitable; is it debt burdened; will the market prices firm. I think the answers are yes, yes, no, yes. so I think it is a good investment. The question is timing and to quote buffet-you cannot time the market. You just invest and it will come alright in end.

[ards] 30/7/2015 13:44

Gem Diamonds broker views

Date Broker Recommendation Price Old target price New target price Notes
30 Jul Panmure Gordon Buy 127.25 198.00 198.00 Reiterates
30 Jul JP Morgan Cazenove Overweight 127.25 230.00 205.00 Reiterates
30 Jul Liberum Capital Buy 127.25 250.00 250.00 Reiterates
27 Jul Liberum Capital Buy 127.25 250.00 250.00 Reiterates
15 Jul Barclays Capital Overweight 127.25 180.00 170.00 Retains

[dr_ex] 30/7/2015 11:11

if we can close at 135 area should create a nice hammer candle on the chart, possibly a small reversal there for 160p area

[hardcarbon] 30/7/2015 10:48

I did a bit of work at Gaghoo - also known as Gope 25 or GO25 - in the early '90s.
Though the resource undoubtedly has potential, groundwater has always been a major problem. We'd get news in the office that the de-watering pump had stopped working and there'd be a mad dash 500km in to the central Kalahari to fix it before the workings flooded. I always believed that getting to grips with the groundwater & geotech conditions would make or break this mine. Sadly, it appears they are struggling to deal with these.

[salpara111] 30/7/2015 10:05

Agreed, hold for 3 weeks and then look to exit if there is any sort of a bounce. It is increasingly clear that the huge capital expenditure on Gahgoo is looking like money poured into a watery hole in the ground.
My biggest concern is that the market demand/supply balance is looking increasingly precarious, they have effectively said that they are not getting the money for Gahgoo diamonds that they expected.
Their main story over the last few years has been about how long term supply/demand dynamics were very favourable but we are simply not seeing it.
I have sat here for over a year waiting for this to turn and here I am under water, mercifully my buy in was 142p.
I have set an open ended limit order for 142p so if it does spike during a day I will take my exit.

[alan@bj] 30/7/2015 09:34

I'm close to bullet-biting time. I'll hang on until the results in August but it's make or break then I think.

[pj 1] 30/7/2015 09:14

I can see alow of 105 in June 2013. for soem reason chart wont go back much further

[dr_ex] 30/7/2015 09:12

Breaching support too. Timber if it closes below that. Might buy more at multi year lows if it gets there.

[salpara111] 30/7/2015 09:10

Well, this is now shaping up to be dog of the year for my portfolio and there are a couple of strong contenders!
We are now effectively at an all time low give or take a few pence which I really do feel is unfair given that they are still solidly profitable.
I said I was going to sell but I guess I will hold for the next set of results given that they are less than a month away and hopefully will show that the business is still in good shape.
My fears about Botswana are looking more and more confirmed, they are struggling to make it past reserve grade and the mine appears to be full of water!
I really do feel that it is time for Elphick to resign in order to restore confidence in the business.

[alan@bj] 30/7/2015 09:01

Getting crucified now, on very low volume.