Medusa Share Discussion Threads

[atlantic57] 05/12/2016 09:14

Yes indeed but golds reaction to the unravelling is to keep falling.
It looks the US dollar not gold us the currency of choice.
Brexit, Trump and now renzi

[nielsc] 05/12/2016 09:06

... and as things look to be unravelling in Europe everything continues as normal. We haven't hit an ice berg. We aren't sinking. Keep playing the music!Cheers,Niels

[maximoney1] 05/12/2016 01:34

Chip, still makes one wary of the CEO being a very good promoter, might be a 'play' more on a publicity spike, but i would be keeping your valuation metrics at the back of my mind. Gut feeling, we still have further falls to go, so could see FR(AG)$8.6 CAD ???

[chipperfrd] 05/12/2016 01:28

maxi,

I really like most things about AG, especially their CEO, but their last financials were still a bit below par, hence the rating by this method.

I had thought my existing method was at fault because it kept printing an over-valuation - even by N.American market standards - but this new method would appear to bear it out.

However, it is such a popular stock it may well ignore fundamentals and get bought anyway. Earnings (or rather lack of) certainly don't appear any hindrance to much of the S&P or DOW!!
Chip

[maximoney1] 05/12/2016 01:17

Many thanks chip, appreciate the amount of work you put in to get these figures.

maxi.

[chipperfrd] 05/12/2016 01:08

maxi,

AG came in at 61st with a score of 241.

That is in line with my current valuation method.

[augustusgloop] 05/12/2016 00:24

I'd just like to point out that chip is completely wasting his time applying the O'Shaughnessy VC1 to gold miners.

Because 2 of the 5 criteria are exceedingly misleading:

1) Price to book - as we all know the book value of a small gold miner is a fairy tale value and bears no relationship to what somebody would be prepared to pay. And after the development - the gold is taken out - once.
Whereas if you set up a production line for widgets - you get production year after year.

2) Price to sales - a normal company that spends $250 making a product sells it for about $400.
But a gold miner (like MML) spends $1200 and sells it for $1250 (and I'm being generous in implying that they actually make a profit).

Also -- being high on the list that chip chooses -- is a simple indication that the professional investors believe that the Directors are lying.

The less they trust the numbers - the lower the price - the better the score.

It works for big well run companies, who have a reputation for honest reporting.
It doesn't work for small gold miners - who as we have all seen are a complete bunch of liars.


If MML have been dishonest with their forecasts over the past 5 years -- who in their right mind would believe that they haven't been similarly dishonest in their claims for AISC and what is CAPEX rather than an ongoing expense?

[nielsc] 04/12/2016 23:35

Atlantic,

Italian pollsters got it right. Looks like they weren't bought.
Is this the beginning of the end for the Euro?

Cheers,
Niels

[maximoney1] 04/12/2016 21:24

Chip, applying your methodology, it would be interesting to see what TSX:FR(First Majestic Silver) scored after such a brutal correction?

maxi

[ilostthelot] 04/12/2016 20:49

Thanks Chip very much appreciated.
Aaz up there as well another of my stocks.

[roguetreader] 04/12/2016 20:24

Cheers Chip, as ever thanks for your efforts and sharing the results
RT

[chipperfrd] 04/12/2016 17:23

Hi Deka, you are very welcome!

Here is the results from the new iteration. I have updated all prices iaw Friday's close and adjusted Forex rates for USD, GBP, AUD & CAD.

Then scored according to the best under-valuations for each of PER, PBV, PSR, EBITDA/Ev & PCF.

As expected, many of the previous top under-valued stocks have corrected since the June 30th Financial period end.

Stock ... score
MML 15
HMY 44
AAZ 45
TSG 48
CMCL 49
AVM 53 (bit of a surprise!!)
SRB 54
SHG 62
HGM 72
KCN 80
AUY 84
MND 89
POG 89
RSG 92
OMI 93
TRY 98
KGC 105
GV 108
HOC 110
SBM 114
CEY 116

That's enough I think.

I have used a standard fixed reduction score for any negative results encountered.
I am a bit behind on some company financial reports - will try to catch up soonest.

Not quite the results expected for some of my holdings. SVM is 152, PAF is 157, SSRI is 124, and SLW is way down at 233. But all the streaming stocks look pretty highly valued FNV 271, RGLD 248,SAND 227, but given their very different business model, perhaps this is to be expected.

Still need to find a way to automate things a bit better - so still some work to go. But pleased to have discovered this particular screening method - so thanks 'rrr'.

Chip

[deka1] 04/12/2016 14:28

Chip as always many thanks for sharing

[chipperfrd] 04/12/2016 14:10

Hi rrr,

Still very much 'work in progress'!

I can already see big differences by using current prices to reflect price moves since the last reporting periods.

I have run all these new formulas for the 5 metrics through my producer workbook. I now need to update all the links in my 'scoring' comparison table.

When I have all that done I will post up the changed 'top 10'.
Chip

[rrr] 04/12/2016 13:59

Well done Chip, I'm pleased to see MML at no. 2!

[chipperfrd] 04/12/2016 10:46

I finally linked all the metrics for the O'Shaughnessy VC1 (Value Composite) into Excel tables. Then had a bit of a problem with the scoring implementation. So not done completely as outlined by his method, but using a scoring system more appropriate for an Excel implementation.

My initial 'Top 10' come out as:

1.RSG (Resolute)
2.MML (Medusa)
3.AAZ (Anglo Asian)
4.SLR (Silverlake)
5.CMCL (Caledonia)
6.TSG (Trans Siberian)
7.HGM (Highland)
8.GV (Goldfields)
9.SRB (Serabi)
10.AUY (Yamana)

However, as I record 'Price' at period recording date, I realise that some stocks have already appreciated considerably since their last financial report, so their (under-valuation) 'scores' would have since declined relative to their peers.

I think I will need to go through my entire workbook and build in a 'current price' to the 5 metrics in order to get a more current under/over-valuation picture. This will undoubtedly be a bit of a slog and with the full year results starting to appear in January, it is perhaps more realistic to aim for the New Year for results to be more accurate.

However, all that being said, I find the results so far to be very encouraging as, in many cases, they are supporting my current method. But also, they are highlighting a few stocks which, perhaps undeservedly, my present method is scoring highly. This looks very valuable to me and will, I hope, make all the work worthwhile.
Chip

ps. it looks like this guy O'Shaughnessy did really know his stuff and hence I am probably going to buy the 4th edition of his book.

[rrr] 03/12/2016 15:25

Hi Chip,

Well done on all you do and share, where you find the time I don't know!
Do let us know how this 'new' metric stacks up.

All the best to you,
rrr

[chipperfrd] 03/12/2016 11:59

Hi rrr!

Yes it is intriguing. But a lot of work. Only 12 stocks done so far. I am having to adjust 3 of the ratios for annualisation in order to keep the comparisons 'apples to apples' for different reporting periods. So a bit of a slog.

Remains to be seen if it will produce a 'sensible' set of results.

I have tried a load of different valuation metrics and methods over time as my system has evolved and I am reasonably pleased with what I am using currently. But always looking for something better.

All the best
Chip

[rrr] 03/12/2016 08:26

I thought you might be interested Chip!!

[chipperfrd] 03/12/2016 01:55

This appears to be it


I have 75 producers to throw at it - but it will take a fair bit of work to sort them into the required percentiles before allocating the score.

Perhaps worth having a go. I will report back (in time) if I get anything meaningful from it.
Chip

[chipperfrd] 03/12/2016 01:36

I actually measure the F-score (amongst loads of other metrics) in my producers workbook. For FY16 I made it a score of 5. But I had 8 for FY15 ??

I would be interested to find out the composition of this other metric developed by O'Shaughnessy, as it sounds as though it might be useful.

I will take a wander around the web to try and get details about it. If anyone already has the required formula - I would appreciate a heads-up, as I would like to give it a road test.
Chip

ps. I have tried straight multiplication of those 5 metrics and it comes to 0.94! So obviously it is some other mathematical juxtaposition.

[stevea171] 02/12/2016 22:14

rrr. Seems Medusa is well under valued then ...

"Medusa Mining Limited (ASX:MML) presently has a Piotroski F-Score of 8. Piotroski’s F-Score uses nine tests based on company financial statements. One point is given for every piece of criteria that is met. Typically, a stock with a high score of 8 or 9 would be seen considered strong, and a stock scoring on the lower end between 0 and 2 would be considered weaker. The F-Score was developed to help scope out company stocks that have strong fundamentals, and to weed out weaker companies.

When narrowing in on the Value Composite score for Medusa Mining Limited (ASX:MML), we notice that the stock has a rank of 2. This is using a scale from 0 to 100 where a lower score may indicate an undervalued company and a higher score would represent an expensive or possibly overvalued company. This rank was developed by James O’Shaughnessy in 2011. The score is derived from five different valuation ratios including price to book value, price to sales, EBITDA to Enterprise Vale, price to cash flow and price to earnings."

[atlantic57] 02/12/2016 10:27

Neil then on past form it will be a yes vote or the first time they have been correct!!!

[nielsc] 02/12/2016 09:58

Atlantic,The pollsters are predicting it will be another upset this time with the no vote leading. Cheers,Niels

[nielsc] 02/12/2016 08:49

A good rundown of the gold price differential between the SGE and COMEX.Http://news.sharpspixley.com/article/lawrie-williams-major-gold-price-divergence-between-shanghai-and-london/260055/Cheers,Niels