Iofina Share Discussion Threads

[jointer13] 17/9/2013 11:17

a few months old.

Iofina (IOF)

Although it appears in the Oil & Gas sector, Iofina is more of an oil-and-gas-services-speciality-chemicals-producer. It has small interests in water and natural gas assets but iodine production is the core of its business. It removes the element from the salty waste water that is a by-product of shale oil and gas production.

Iofinas main products include IPBC, an iodine biocide used in paint, wood protection and personal care products. Methyl iodide is a soil fumigant that also has use as a vital catalyst in acetic acid manufacture. Other products are used to disinfect and sanitise, for etching silicon compounds for semiconductor and electronic components and to determine the density of minerals in the gem industry.

For oil and gas producers the brackish by-product of their process constitutes a significant cost. The average oil well yields about 7.6 barrels of salt water for every barrel of oil. Iofina can turn this wastewater into cash flow which is a very attractive business model for the oil and gas producers.

The market for iodine products has been dominated by Chilean and Japanese operators for over 50 years, due to naturally occurring sources of iodine. Iofinas directors are looking to challenge this by becoming the worlds leading producer of iodine, being the only independent iodine producer in the USA and controlling the largest currently known reserves in North America. It has developed its own patented process, Wellhead Extraction Technology (WET), allowing low cost production and high operational efficiencies in contrast to other large iodine/gas fields in Mobara, Japan. It costs Iofina around US$10-20 per kg compared to other major producers operating expenditure of US$20-40kg. WET units can be deployed to producers sites. Alternatively Iofinas WET IOsorb plants can be used to process larger volumes, up to 30,000 barrels per day.

The full-year results released on 7th May showed a narrowing loss to US$1.2m, from US$2.8m, and the first positive year of EBITDA of US$194,849. It had strong iodine chemical sales in the first half of 2013. Revenue was higher at US$18.6m, compared to US$16.1m previously.

Investec raised its price target on May 7th from 164p to 230p with a buy target. First Columbus put out their first research note stock on the same day with a 239p target saying, if Iofina can successfully execute its strategy, the Company is likely to become a major global iodine producer in the next few years


Read more: hxxp://www.shareworld.co/index.php/share-spotlight/may-09-2013/#ixzz2f8tNgXJ0

[freshvoice] 17/9/2013 11:02

Easy to say, if plant is improving and vol of brines increasing each month will be a record.
SIMPLE Tchhh

[bogg1e] 17/9/2013 11:00

Che, it sounds like the chemical division premises arent up to that growth. It will be interesting to see how they manage it, but i hope they are preemptive in this regard and have the upgraded premises in place before its needed. From my notes they can expand premises and shifts to cope with manufacturing derivatives based on 1000 tons per year iodine input. Over 1000 tons will leave them feeling a bit cramped.

[worraps] 17/9/2013 10:44

Danster4......where did you get that information?

[danster4] 17/9/2013 10:41

Record months production for IO2 in July and August

[che7win] 17/9/2013 09:50

Didn't I read somewhere that the Chemical division was growing at 49% a year?

I expect the Chemical side will be looking good next week, just not sure by how much

[superg1] 17/9/2013 08:33

Re short positions. I just see them as a but at some point. We can wonder if insti X will buy, but with a short position you know they have to buy at some point, and how many.

Take Nano, it has done very well.

It hit a peak and then took a dive, short building can be linked to that dive

GMT capital shorted throughout the period and now hold 5.34% short, over 11 million shares covered.

However when they stopped building in June, the priced turned and is now heading back to old highs and I estimate they are now under water (will break it down later).

So what can GMT do next, they tried to drive the price back, did so, but as soon as they stopped, off it went and now they are sat on an 11 mill position that if closed at pace would cause a big spike in the price, or slower and the momentum would continue.


One to watch purely on that point alone.

I recall the bears on here saying 'Nano next', good call guys, that was at prices well below where it is now. So those positions will be stinging a bit now.

[rikivilla] 17/9/2013 08:30

Just hope it's not Lance on the offer!!

[escapetohome] 17/9/2013 08:02

AGL - Hope you bought some of these on my tip

London's "hot money", those fast chaps who hunt lucrative takeovers, think they have found an angle.
Angle plc is a small, AIM-quoted, biotechnology company that largely flies under the radar. However, there were whispers yesterday that it had been tapped up, so far informally, by more than one potential bidder. No names were mentioned, but any number of bigger healthcare players may be interested.
As well as specialising in foetal health, Angle owns a subsidiary, Parsortix, which has developed a clever technique to separate blood cells to test for cancer and which already has a patent in America. Angle bulls expect Parsortix to be granted regulatory approval there by the middle of next year, about six months after it receives the green light in Europe.
Though the shares edged a ha'penny lower to 73p yesterday, they have jumped by nearly 25 per cent since the start of this month. At about the same time, trading volumes, the number of shares changing hands, also spiked, itself often a signal that something may be afoot.
The rumoured price that potential buyers have indicated they may be prepared to pay is above 200p, still some distance north of where Angle shares are trading now.

[scrutable] 17/9/2013 07:37

warren
I have answered your sneering tone with politeness but it still persists. I will take my gloves off.

I refer to ASOS repeatedly because, as a little research on your part would as for others bring it up the best performing share of the decade, and as such a bench mark.

I happen to see similarities in the share price movement which should encourage others. So please drop that sneering. It does not become you. Perhaps you can't help it either

[superg1] 17/9/2013 07:37

Scrut

I always consider long term risk, and chance of success to decide on an investment, rather than short term momentum, so on that front I often have a very bearish view on a number of hype shares.

Take my view re PLE, long term I think the product will be nowhere near the block buster that analysts predict, they seem to have missed the same product with almost the same ingredients already exists and has been well established for years. I do wonder how they are going to get a partner as the fact the product is already out there OTC is surely a stumbling block for any interested party.

However that is just my view.

However if I completely remove my long term view and think purely on potential short term momentum, then I will find there are a lot of investors very bullish about it and the company hope to achieve a positive move re the EU regulators approving the product.

GDL could be viewed that way, and indeed had a great run on the momentum and promise given in rns's at the end of last year. However that test well rns has proven to be a little misleading to say the least.

So you will have many waiting for delivery rather than trusting rns comments. All AIM shares seem to go through that cycle.

I've missed a couple of strong movers recently but got the solid tips. Neither were hype shares with the herd flying in, just some good solid research by a couple of guys. IOF research tends to occupy my time.

The trick with pure momentum shares (jam way down the line) seems to be to get out while volumes are good, and ignore trying to call the top, just grab profits/take losses, with good discipline.

[superg1] 17/9/2013 07:03

Scruts is just quoting what is likely to happen price wise on delivery. It's not a case of planning to build plants they are actually building the plants that will take them beyond that 1200mt plus per year figure.

That would equate to a rate at 10 times what they did in H1 this year, which is stunning growth.

In the iodine industry it is growth at a rate they have not seen before, but then growth at capex levels, they would think impossible when compared to their own methods.

I think GWP sum it up best

Buy Iofina – on track to being the biggest US producer of Iodine at the lowest cost globally‏.

All the facts point to that being true.

1200mt means 3.3 mt per day.

I expect io2 on a decent bpd to do over 1mt per day on it's own, io1 should be on .15 plus.

So what we need from the next 4 to get to 1200mt is just .5 mt per day each. I'm sure they are capable of more than that.

The latest forecast gives generic plants, io2 on, as 250mt per year.

Io2 was on more than that, when on only 18.7k bpd, so they have left some room for the upside there.

However at 250 each, that gives 1250mt for io2 to 60, then we need at add 100 to 150 for recycling and io1.

But then it doesn't stand still there as more plants will be built in H1 2014 and beyond.

Then next year we have water revenue......

[warrensearle] 17/9/2013 01:23

A stirring late night battle cry there scruts - and another reference to ASOS you can't help it can you :) anyway I'm all for the enthusiasm and hope you are right the first judgement day is only a few days away and I for one am expecting good news,

[scrutable] 17/9/2013 00:29

warren
You write: "This is where I have taken issue with some of your previous posts on future valuations textbook wise they are fine but as we have seen the realities of business - especially very small businesses like Iof - are often plagued by issues and delays ....."

I think many will back me when I claim that from 40p upwards I have made share price predictions which came true all the way up to 180p. It was seen at the time, as you see it now, as "wild", because only a few of us looking at the whole market and at precedents like ASOS could see then how astonishing and singular were the parameters of IOF's transit- as per Haley's comet - very bright, almost without precedent. Won't come again for a very long time.

I admit I was not confident about the continuation without pause at 180p, and did not encourage other PIs further to the short lived peak at 240p. I felt the need for events to catch up with the price, and slippage of targets became too frequent and needed repeated adjusting to..

Then came the black swan and the share price destabilised , untrustworthy, and completely unpredictable. I never expected LB's sudden exit. How could anyone have done, except from inside information ?

A sixth sense tells me that that's over now. The share price is about to lag events. Like front wheel drives against rear wheel; one is inherently more stable than the other. Likewise the share price is now more stable as it follows the facts rather than anticipating them.

I am confident for myself about £3.50 early next year and £7.50 by the end, but
you must do your own research and stand by your own judgement. Leave me to mine even if it seems extreme .After a hair raising Summer I am doing alright with a 'Cinderella' share few others believe in and have begun reinvesting new profits in IOF which IMO is the LSE's front runner for share price stellar out performance during 2014

[hitsha3] 16/9/2013 23:34

Is there suppose to be some sort of annoucment tommorow CK?

[captain_kurt] 16/9/2013 22:46

Alot of worried bears tonight. Chill and take out a larger short at 8am :@)

Engis will be pleased, as they have alot to close in a short space of time

[n3tleylucas] 16/9/2013 22:32

Let's ignore both the horrendous interims approaching, and the usual, but ever so tiresome promises of better things to come for one moment, and focus on the debt timebomb quietly ticking away.

When the shares are well under conversion price, and the company has not generated enough cash to repay any of the debt, what happens?

I'll tell you what happens.

Stena either force the issue of huge amounts of shares at a massive discount to take a controlling stake, or fold the company.

The destruction of value from the better option gives us all at least a glimmer of hope, albeit from a significantly reduced base.

[noli] 16/9/2013 21:16

Lets hope iof say, sorry no can do, as you shorted our company. Oh, and have a nice day.

[superg1] 16/9/2013 21:09

H lol

I bet they are.

[phoenixs] 16/9/2013 20:32

superg,
I also hope that they have taken on a larger short position.

[monty panesar] 16/9/2013 20:29

My thoughts are if the results can demonstrate Io5 can be operational before the year end and 6 operational before mid feb the market will see that positively. Also interested to hear the guidance for production and plant ramp up.Ramp up of plants up to now has taken several months. Will it take so long going forward?

It will be interesting to see what is said.

[the librarian] 16/9/2013 20:18

Norbert's back! :-) thought you had gone over to Stobart.

[phsycho] 16/9/2013 20:15

Hi Garfield, No I have no recent link, just broker advice.

This link from May is pre the "sell", and has been posted before, but my understanding is IOF is still very much part of the fund.

[garfield31] 16/9/2013 20:05

Is there a link to his comments please?