Iofina Share Discussion Threads

[che7win] 27/12/2013 13:59

Thanks Engelo,
My simple rule is if a company is going to grow for the foreseeable future at a certain rate, it should be on that rate.

So a stock growing at 20% a year deserves a P/E of 20.

A quick rule of thumb.

[engelo] 27/12/2013 13:07

che7win: a take on PEs: you may well know the well respected leedskier and even the stock (GRPH). (OT exciting but in the pre revenue stage.)

"leedskier - 22 Dec 2013 - 17:04:39 - 1232 of 1281

Applying a forward PE of 15.6 for an Aim company in year 2, with cash in the bank and producing a stream of high tech products, is quite frankly ludicrous.

The US Russell Index (their small cap index), trades on a PE of 81.

photo USPEratios_zps5aed75f0.png"

leeds appends a useful table of PEs to this post which unfortunately I couldn't copy.

[masurenguy] 27/12/2013 13:02

An interesting perspective from Paul Scott on one of the significant factors behind the extent of the recent halving of the stock price.

"It's crazy the way some people take large leveraged bets on highly speculative stocks. That's just an accident waiting to happen. We've seen that with the high volatility of stocks like Iofina (LON:IOF), a favourite of Spread Betting clients apparently. When the price suddenly plunges, everyone is stopped out, and if their position size is too large it can lead to a large chunk (or even all!) of their equity being wiped out. In my view Spread Bets only make sense for more stable stocks, and even then only if gearing is carefully controlled."

[master rsi] 27/12/2013 10:49

From the "UPS" thread a bit earlier .........

KEEP an EYE
IOF 86.125p

Had a large fall and recently is staging a flat bottom, the last candlesticks are bullish " BULLISH HARAMI " so expect a bounce back
----------------- Intraday ------------------------------ 1 month -------------------------- 1 year ------------------

[escapetohome] 27/12/2013 10:42

Now I havent done too badly on my tips - and all done without 'hours and hours of research' just on picking a stock where sentiment could turn - and it did!

[ansana] 27/12/2013 09:45

Iof multibagger thanks 14105 it says it all really. I can't say I read your post, there was need it's all in the name.

[che7win] 27/12/2013 09:35

10p EPS this incoming year at $45kg on their median iodine production forecast, Chemical division will cover admin expenses.

Current iodine median sell price is $50 going into January, so iodine prices look to have been stabilising since September.

3 more plants soon to be comissioned and the growth story continues yet we sit at a current P/E of 15 on a paltry 3 plants which to me is at the pessimistc end of the valuation range.

If we stay in a P/E of 15, then when we do move to next years 10p EPS figure, that would indicate a price of 150p on P/E of 15.

The official House broker EPS forecast is still 14.42p EPS, much higher. That looks challenging on what we know at this stage so I'm disregarding it.

We also have multiple mobile units and I would hope the chemical division expands next year.

A lot of work to do ahead, but all looks achievable and realistic IMHO.

[iof multibagger] 27/12/2013 08:22

Rsi is at the lowest STRONG BUY.. GREAT ENTRY POINT FOR SERIOUS GAINS WITH RECORD
PRODUCTION..WITH MORE PRODUCTION TO FOLLOW.

[superg1] 27/12/2013 07:21

I take it a last ditch effort for both. CL had been fund raising but clearly not enough.

Spending on the iodine mill to raise production would have been money down the drain and is unlikely to happen. A line I used to Simon Jackson (then president), who stated it wasn't money down the drain and would go ahead.

He left and the plans are suspended

[steveolds] 26/12/2013 23:05

Thanks SG1.

I still cannot get my head around why CLQ have merged with Sirocco if it is that obvious that Sirocco are on the ropes taking a good hiding. This cash flow which is supposedly de risking CLQ's lithium ramp up as stated in the financial press will not account for much next year if the iodine spot price stays where it is or goes lower. Unless they are keeping their fingers crossed and believe that restriction of supplies with send the price back up and rising Sirocco opex can be easily absorbed. (????)

[rogerbridge] 26/12/2013 22:07

Yes Monty the new pictures look impressive. We can see the progress

[napoleon 14th] 26/12/2013 20:51

A late merry Xmas & an early happy new year!
Thanks to all who make this one of the most informative & lively threads.

I notice many, like me, have sold no shares. Wise innertia!
IMO we couldn'task for a better backdrop for IOF & as the company
grows into a major producer (IOF produced zero iodine 3 years ago.....!)
so the share price will grow.

I won't bore you with a TA, but it looks quite likely
wave III could kick off soon; news driven of course.
A quick calc gives a target of c. 370p, but no precise time.
That's easially a three bagger from here, & the rest.....

So, a properous new year to all!

[monty panesar] 26/12/2013 20:27

For those that are in contact with IOF please thank them for the pictures of io4/5 on website and would be good if they could continue to update every couple of weeks.

[pcjoe] 26/12/2013 18:55

Re Chile - The world needs Iodine & Chile holds the key to Iodine Prices - The new Socialist Govt can raise taxes against the Iodine miners as much as it wants - It should do to fund its social improvement programme IMO - The extra costs will work their way to the bottom line & the world will have to pay - All as long as the Chilean miners maintain restriction on supplies - Unsustainable & uncompetitive opex for several miners should help enforce this

The same trick will not works for other miners - Unlike bulk Iodine, customers can get their copper etc elsewhere

Wouldnt be surprised to see Iodine prices rise substantially next few years re the above - SGs thoughts re strengthening local currency will also help re this

[monty panesar] 26/12/2013 18:46

At least they are all back to work in the US today whilst we are on cold turkey.

[steveolds] 26/12/2013 18:26

Canada Lithium weren't too troubled, I presume, about the iodine industry's prospects in Chile and merged with Sirocco Mining earlier this month with CL taking the lions share of the combined entity.

"......a friendly deal to combine their businesses to pursue significant growth potential and savings opportunities....." is what I have read in a few places.

I just can't see what is in it for Canada Lithium if the outlook for iodine is that bad in Chile. The "significant growth potential" can't be iodine if Sirocco and others out there are cutting back. I do believe that the outlook is fairly bad for Chile iodine so can't fathom why CL have done this. I can see why Sirocco have gone for it.

Have CLQ simply got their sums wrong?

[superg1] 26/12/2013 17:43

Shroder

Most predict a turn and they can't cope at current rates, so if it does turn things will become more difficult

[crosseyed] 26/12/2013 15:18

steveolds,

I do wonder whether the new Chilean president would be stupid enough to destroy the countries few wealth creators - mining - by taxing them into oblivion though. Bite off the hand that feeds her?


Governments seem to be particularly adept at pursuing policy regardless of the consequences. Think of Blair/Brown (too many decisions to mention, but eg gold), and Cameron/Osborne and the extra tax on North Sea oil.

Short-term popularity is far more important than longer-term economic destruction.

Thanks again, SG, for your accustomed research and analysis.

c

[shroder] 26/12/2013 14:04

Good post- superg1 26 Dec'13 - 09:05 - 14089 of 14091

Chile could be helped with exports in light of the Peso which has declined during 2013.

That said, I am not sure if there would be a balancing effect with imports of say diesel or plant and machinery?

Neighbouring Argentina seems to be operating two currencies rates which makes research difficult.

[1madmarky] 26/12/2013 13:37

Surely also the best locations to mine have been exhausted by now. Be it the accessibility of the resource, the quality or the quantity. Just a thought.

[rovi67] 26/12/2013 13:06

SEE is worth a look at for 2014, excuse pun

[steveolds] 26/12/2013 12:58

Thank you for that SG1.

I do wonder whether the new Chilean president would be stupid enough to destroy the countries few wealth creators - mining - by taxing them into oblivion though. Bite off the hand that feeds her?

Only time will tell I suppose.

[superg1] 26/12/2013 09:05

Stevold

I saw your question re, old iodine prices and why mines now need $45 plus v $25/$30, a few years back.

The answer is simple, but only due to reading about various problems in Chile.

The first is the drought now into it's 4th year. Much of Chiles power comes from Hydro power. Then came the copper boom and that is the main issue. Think of those cheap holidays to certain destinations, and cheap property, once people chase that, it's not long before the boom causes price hikes everywhere.


The Chile copper boom created many jobs, but early on they were low paid. Mines making billions and the locals being screwed over, so then came the strikes, which still happen now, pay went up. Competition for electric power went up, so the price followed. Skilled workers are in short supply so the wages went up more. Mines use huge amounts of water, and depleted local supplies so many are moving to seawater.

While iodine mining isn't a massive employment sector, it is in the same area, so those miners will want pay equal to those immediately around them if the likes and SQM and others want a workforce.

On top of that the courts make like difficult re the environment, they block plans to expand power availability, and you will see below they don't just block
new plants, they suspend others already in use. Two in the last 2 months.


The first link. I imagine some view the miners as working for low pay and living in poverty, they did a few years ago, but not now. Caviar and spider crab on the supermarket shelves, which some load into their sports cars with other luxury goods. Truck drivers get $80k p.a.






This one shows what the courts do




This one covers rising costs, and includes the need for seawater. In the example the company involves stating pumping seawater costs are 'notable' and take 1/3rd of all power they use to do that.
Just about all will have to go the seawater use which pushes up opex. If 30% more power used is the standard, then the power grid is really going to struggle to cope and rising costs






So basically, Chile was a cheap place to produce minerals a few years ago, due to cheap labour and other costs, but just like everywhere else in any industry that attracts the masses, it soon changes to much higher costs as the boom progresses.

Costs will keep going up, and the new Chile gov wants to tax miners more to pay for reforms. They also want to nationalise the water, which will further impact mining costs, for those not already getting their own seawater supply.