Iofina Share Discussion Threads

[roundup] 27/2/2014 11:30

che. Excellent, well balanced post showing an in-depth knowledge of the company.
As ever you have analysed our present position well and I only hope it will help to bring some cool, level-headed thinking to this board.

[frog1] 27/2/2014 11:29

che7win

Yes it reacted and the reaction was amplified as there was so much leverage in the ownership at that time. However, many here appear to believe the water will be awarded and they are part of the market. I suspect there are many more who also believe it. All believe it will give a big boost to the share price If something occurs to end that belief, it will inevitably have a further adverse effect on the share price as more people take the position of no revenue from water and any positive possibility from water is discounted. Only when everyone believes that there is no chance for water will it be totally discounted. I am saying the fall is roughly directly proportional to the number who believe it will happen, the probability they put on it happening and the belief of how much it will give to the share price. Once any of those are zero, there will be nothing left in the price.

As I said, in addition if it is turned down it will reflect on the management as it would be another failure.

Personally, I have never thought it will happen and if it fails, I am still optimistic that the share will perform as long as the management deliver on the Iodine business. I still think the share will take a big hit if it fails and in that case it would have suffered less if it was written off in 1 go in December. As it stands, it will be like it failed twice, even if that is illogical.

Of course the reverse is also true. Success should push it higher than justified by the water alone as a worry for investors like me about a possible fall will be removed. Anyway, all hypothetical at the moment and I really hope we don't find out how far it would fall on failure.

[engelo] 27/2/2014 11:20

SG: the idea that IOF might get involved with cleaning up the SWD water after iodine extraction never got much traction.

But surely the output stream from the IOF plants has had various impurities removed (oil we know about).

Anyone know what are the other main contaminants?

[alphacharlie] 27/2/2014 11:14

Oh come on - tell us sg1

[superg1] 27/2/2014 11:02

UP

lol

One that has you head scratching re the price thinking there must be a catch. Probably plenty have had a look, seen the chart and walked on.

They have in recent times, linked up with the worlds largest in that sector, very strange this AIM game.

[che7win] 27/2/2014 10:56

frog,
don't you think the market has already reacted to the water application?

I think sentiment has fallen to rock bottom here because RNS's from last year have had negative vibes, one after the other.
I don't think water registers because the iodine RNS's have taken over sentiment, the market has attributed zero value to water, the market is fixated on the iodine side (I know I am).

If the market were rational, we would apply say half the water application - 40,000 bpd at 65 cents to the share price - that I think is a realistic minimum base.

I can't think of an RNS lately that I have been pleasantly surprised about.

It is clear that shareholders confidence here is low, hence every time the market has expected news on IO4/5 rollout and it hasn't came, the share has fallen.

I personally expected an RNS last Wednesday, then again yesterday, that was disappointing and I was sure there would be an RNS today.
The market clearly thinks the same thing, hence many holding T+20's closing out.
If you remember from a month ago, the share was in the high 70's and rising into the 80's, many of those shareholders will have sold out recently with T+20's expiring.

Having talked to the company and done digging myself, I was one of the first here to mention management were going to underpromise and overdeliver.
Unfortunately, I think management are out of touch and as charlie says, I wouldn't be surprised if they are deliberate in holding off news. Whether that is to dampen expectations, deliver news on both plants together or something else I don't know, but it is strange IMHO.
For that, I think yellow jersey or whoever is advising them need to be held accountable.

They have wound down expectations, leaving shareholders in the dark.
I know that there have been slips in performance, that is to be expected in a young growing company, Others have mentioned IO2 plant being offline for a while in November, that can't have helped H2 figures.

It is knowing that the issues can be fixed that gives me confidence that the business can beat expectations, but it needs hard work and probably more structure.
I get the feeling they are a small team working hard to deliver but juggling a lot of balls.

The Numis note I have written off as poor, it should not have reached the market.
Apart from the incorrect figures, they were incorrect on many aspects of the business, e.g.they didn't differentiate the patented application of our supply enough. They didn't mention the plants being unique - which they are - we have a unique process which is materially different from the blowing out method, if I hadn't looked into that I would have been disappointed.

The fact is IOF is a valuable business to others, but management don't shout it out enough judging by the presentations reaction.

I have made known my views before, this is business I think is too cheap. I view H2 last year as a disappointment and slip up that management have in their grasp to correct, meanwhile the business keeps on growing.

Two plants imminent, another in a few months, chemical margins to improve with internal supply and Chemical business will have a good quarter.

The learning curve continues.

[uppompeii] 27/2/2014 10:54

Is it IOF?

[superg1] 27/2/2014 10:51

I think the key is frog the failures in recent times v the complete lack of understanding of the water industry in the US.

Not even the US get it as fracking on this scale is a relatively new industry.

There was boom talk just a couple of years back for the recycling industry in that sector, so a lot of cash was thrown at it. A report posted here a few months back re that sector showed how recycling hadn't taken off in the way they had hoped.

Quite simply it's more expensive than using fresh water, but where fresh water isn't abundant, it should gain traction in the future in the lower states imo such as California and Texas, as the water shortages in those areas continue

Then add in that some think the permit will be awarded, some think not, but the vast majority have no understanding of it at all.

Many months into Investec's appearance they had no idea what Atlantis was at all. They literally didn't know it was a shallow gas aquifer etc etc.

So for the market it's an unknown that IOF talk very little about, and keep saying it's non core.

As for the value of that, as we know there are many shares on high prices with nothing but an idea, with no sales, and no actual market. There is no fear on such shares, as nothing can fail near term v the promise as there is nothing to deliver near term other than potential.

I've been looking at one over the last few weeks. A quiet little AIM with very healthy revenues reported for sales on what looks like a great idea.

BB's quiet all around, a drifting share price, and on historic lows when it looks like it is profit making and could well significantly increase sales this year. It's a 'what's the catch' share, re it's share price

There may not be a catch and the market has simply missed it, but on face value, it looks an absolute bargain with jam now, not tomorrow.

[uppompeii] 27/2/2014 10:50

Nothing to do with something as basic as sells outweighing buys then?

[iofra] 27/2/2014 10:42

Been a drop today to gather in some shares.

[frog1] 27/2/2014 10:23

I am surprised that people think that something that they put a value of more than 50% of the current share price on, and that they believe will be granted has nothing in the share price for it. That just does not make sense. If there is any chance of it being granted, someone in the market will give it has some value, after all the people here are part of the market and many believe it wil be granted and has significant value. If it is rejected and then definitely has no value there will be an inevitable fall. The higher the chance of it being granted and the higher the value attributed if granted, the higher the fall will be.

The other hit would come from yet another 'failure' by management to deliver and so a further loss of credibility.

[superg1] 27/2/2014 10:21

Johns

The cynical side of me things of stops triggered before news tomorrow. I wouldn't assume that io4 and 5 aren't complete either.

[captain_kurt] 27/2/2014 10:21

Hopefully the Iofina landscape will look more positive tomorrow.

[bob alan] 27/2/2014 10:18

So look at it as opportunity

[n3tleylucas] 27/2/2014 10:17

There is another drag, if this stays sub-£100m some ii's will dump at their next review. Some firms will review quarterly, so end March is likely to see some action, if things don't improve.

[malachey] 27/2/2014 10:16

Everything seems to be tanking today

[bob alan] 27/2/2014 10:14

Today's market doom is not helping things here,its down.

[che7win] 27/2/2014 10:12

PUG,
my view is water is worth anything from 40p to 100p on the share price, we just don't know enough factors like how much we get or if we supply cold, hot or a combination.

You will know that next year's forecast is 11p EPS without water, so really we should be starting from a 110p baseline on that forecast and adding whatever water projections on top.

Then add a growth factor (I would think a P/E of 15 would be appropriate as that is what SQM is on and it doesn't have any growth projections for the next few years).
What would change for SQM is if they bought a young upstart that does have sustainable growth of 35% plus per year).

netley likes to value businesses on two years out, I am happy to value on next year at this stage, two years is too far out.

[shonny] 27/2/2014 10:09

At this rate the sixties will be here today.

[pugugly] 27/2/2014 10:06

Bobsworth agreed with your fall however upside tatget might be (imo) + 40P to 50p.

At 4 times current share price would take to some £3.00 well over the GMP high side valuation of 275p.

[micknickbanny] 27/2/2014 10:03

The reality is that many months down the line we only have THREE plants operational which are under producing and no water permit ...

[pugugly] 27/2/2014 10:00

che&win:> Agreed water certainly not in the latest GMP report (dated Feb 6th) BUT a lot of sentiment (on this tread re water upside I was just musing what short term impact the decision will have when it arrives. My own guess + - 10%- 15% on the day

[bobsworth] 27/2/2014 10:00

Pug for an asset that is non core and said not to be priced in, water has had had a dramatic impact on Iofina's share price as highlighted by che7win. For that reason I would not be surprised to see the shareprice fall to 50p on a reject and quadruple from current price if granted.

[che7win] 27/2/2014 09:51

PUG,
water doesn't register in the share price at all, we already took a hit from the 130's for water application.

charlie,
I have suspected a few games being played.

Shareholders are panicky, that's understandable with lack of news, but we will soon hear we have doubled our full scale production with plants with 4 and 5.

That is a sea change in production.

I think we can do a lot better than last year so I am hopeful they can make progress this year on all fronts - growing plants, chemical and refinement of existing plants.