Opg Power Ventures Investors - OPG

Opg Power Ventures Investors - OPG

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Stock Name Stock Symbol Market Stock Type
Opg Power Ventures Plc OPG London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 12.25 08:00:00
Open Price Low Price High Price Close Price Previous Close
12.25 12.25 12.25 12.25
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mrmcnee: Looking very good at OPG, should end the day at the highs, can see the rise continuing for the rest of the week. OPG is basically a 1st rate recovery play, new prospective investors need to just look where the shares have fallen from (the 70p's) a great entry point or top up opportunity right now. Concur that 40p-50p is a realistic near term target price. Good luck trying to get a slice of stock.
thirty fifty twenty: The CASH generation here is incredible. Even in Covid year with turnover significantly down they are able to generate big CASH - and there is still the >13.5m asset sale to benefit! net debt is now 20m and will be less at the year end, so debt/EBITDA is well less than 1. which puts the business on a EV/debt multiple of <3times OPG is not without risks but given that they have actually delivered on their plans since 2018 and net debt has reduced from >80m to <20m in 3 years that is an average c.22m per year of Free CASH Flow and the MV is <60m! the risk reward i think is outstanding, the most critical for me, is that there is now clearly a huge Head & Shoulder bottom pattern in the shares, indicating that other investors see the share price as having bottomed and now set to recover. fingers crossed and time will tell. All IMHO, DYOR + BoL OPG is in m top5 hldgs
jailbird: Piotroski value screen significantly outperforms the market despite a dire year for 'value'36 per cent total return vs 9.2 per cent from the market over 12 monthsNine-year cumulative total return of 222 per cent vs 113 per centEight new deep value recovery playsIn a year when 'value' took a beating, it's curious to see my value-focused Piotroski screen beating the market by a large margin. 12-MONTH PIOTROSKI PERFORMANCEName TIDM Total Return (28 Jan 2020 - 18 Jan 2021)Venture Life VLG 164%Tandem TND 120%Robinson RBN 108%Trinity Exp & Prdn. TRIN 20%Enwell Energy ENW 12%Smart (J) SMJ -0.9%Phoenix PHNX -2.6%Centaur Media CAU -26%Volga Gas VGAS -31%FTSE 350 - -6.3%FTSE All Small - 10%FTSE Aim All-Share - 24%FTSE 350/All Small/Aim - 9.2%Piotroski - 36%Source: Thomson Datastream Rather than telling us something about 'value' investing, this juxtaposition may tell us more about what a funny measure of value price-to-book (P/BV) has become in the two decades since accounting professor Joseph Piotroski published his famous paper about using fundamentals to spot recovery plays. The P/BV ratio values a company against the value of its net assets per share. There's a good central idea behind this approach. A company's assets are utilised by it to produce sales and profits. If the price of a company is low compared with its net asset value, it may be that investors are underestimating how profitable those assets will be in the future. This is especially true when companies have fallen on hard times and the market is yet to appreciate the steps that have been taken to turn performance around.The problem for P/BV is that companies' balance sheets have progressively captured less and less of their profit-generating assets over time. That's because companies increasingly focus on investing in intangible assets, such as brand and research and development (R&D). Generally, rather than being recorded as an asset on the balance sheet, these investments are treated as an expense to be offset against profit in the year they are incurred. This effectively means the productive assets of firms that invest mostly in intangibles are underreported. Some companies also carry a lot of goodwill from past takeovers, which bolsters the balance sheet but is simply waiting to be impaired .Still, there are still some companies that require lots of tangible assets to generate sales and profits, such as property, resources and investment companies, along with many industrials. The P/BV measure can still be useful in these hunting grounds. This is particularly true of smaller companies, as is amply demonstrated by Simon Thompson's annual Bargain Shares Portfolios. However, in general, I'm not too convinced about P/BV as a means of assessing value for the market as a whole. While three runaway small-cap picks from last year's screen meant it did very well overall, the longer-term picture has been very bumpy.Still, following last year's run the screen is comfortably ahead of the market since inception in early 2012. The market in this case is taken to be an even split between the three indices screened: FTSE 350, FTSE All Small and FTSE Aim All-Share. The nine-year cumulative total return stands at 222 per cent compared with 113 per cent. While this screen is considered as a source of ideas for further research rather than an off-the-shelf portfolio, if I add in a notional 2 per cent annual dealing cost (the cost of dealing small caps can be high) the total return falls to 169 per cent. While I have some issues with P/BV, I have far fewer reservations about the F Score devised by Mr Piotroski in his 2000 paper. This involves an interplay of nine different fundamental factors to test whether a company is making operational improvements without drawing on outside factors. The nine tests are:? Positive profit after tax, excluding exceptional items.? Positive cash from operations.? Profits after tax, excluding exceptional items, are up on last year, which Professor Piotroski highlights as being of particular importance as a signal that a company may be in recovery mode and in the process of rerating.? Cash from operations is higher than profit after tax, excluding exceptional items, which indicates an ability to convert accounting profit into actual cash.? Gearing (net debt as a percentage of net assets) is down on the preceding year, which suggests that the company has not had to look for external sources of finance.? The current ratio (current assets divided by current liabilities) is up on the preceding year, which suggests that the company's ability to service upcoming financial obligations is improving.? No new shares issued over the past year, which again suggests the company has not had to look for external sources of finance.? Gross margins have risen in the past year.? Improving capital turn (turnover as a proportion of net assets), which suggests greater productivity.Mr Piotroski classified F Scores of eight or more as high. He found stocks with high F-Scores and low price-to-book ratios (bottom quarter) outperformed. He backtested a long-short strategy based on this method and found it would have achieved an average annual return of 23 per cent in the 20 years to 1996, almost double that of the S&P 500.This year eight stocks have been identified by the screen. I've taken a look at the largest on the list, Premier Foods, which is a really interesting example of the massive gains that can be made when a heavily indebted company gets on top of its balance sheet issues.Download documents (.xlsx )8 DEEP VALUE RECOVERY PLAYS Name TIDM Mkt cap Net cash/debt (-)* Price Fwd PE (+24mths) Fwd PE (+12mths) Fwd DY (+12mths) DY FCF yld (+12mths) P/BV Fwd EPS grth +12 mth Fwd EPS grth +24 mth 3-mth fwd EPS change% 3-mth momWatchstone WTG £26m £37m 56p - - - - - 0.72 - - - -7.5%Wentworth Resources WEN £43m £11m 23p 12 16 6.4% 7.1% 8.6% 0.51 -4% 28% 3.3% 33.3%Northamber NAR £16m £15m 58p - - - 1.0% - 0.63 - - - -5.7%OPG Power Ventures OPG £63m -£30m 16p 9 7 - - - 0.38 -32% -42% - 59.9%Hummingbird Resources HUM £120m -£32m 34p 3 3 - - 2.6% 0.95 68% 75% -42.0% -14.1%LoopUp LOOP £44m -£8m 79p 26 - - - -3.6% 0.66 - -70% -11.2% -65.5%Anglo-Eastern Plantations AEP £248m £71m 626p - - - 0.1% - 0.77 - - - 22.7%Premier Foods PFD £844m -£403m 99p 9 10 0.3% - 7.2% 0.75 12% 16% 7.2% 5.9%Source: FactSet/ *Foreign FX converted to £
nick rubens: I think impatient investors hopefully. Sometimes a rally runs out of steam and needs positive company news to build upon it. Financials look ok to me so any dips should be a buy opportunity. But I don't know for sure. Anyone lucky enough to have caught the 10p bottom might be taking some profits in case they get wiped out. SP chart is volatile and has been in a bear trend, but hoping that will change.
fillet mignon: Just think through the logic of post 5583- Net debt is the book value of a company's gross debt less any cash and cash-like assets on the balance sheet. Therefore Net debt by its very definition cannot be higher than your quoted gross debt figure of £56.8m. This company is a classic value turnaround play which is more than 60% of the way towards fully clearing down a significant debt pile (paid back c.13-15p per share of debt over the last 3-4 years with the intention of derisking the company and rebuilding investor trust. With the share price at 15-16p it is clear that the market has not fully priced in this fact, which is why a number of us here are here sitting on our hands. I therefore conclude that your posts are either reflective of (a) a lack of research understanding of some fundamental accounting relationships or (b) a slightly more sinister agenda. I hope that it is (a) but given that you have come out of nowhere to write the word "doomed" in upper case i have my suspicions. Funnily enough when i do see posts like this i view them as a great contrarian indicator- ie stay the course as people are seeing the value and want to disrupt the thread in order to build a position cheaply. I see this conservatively as a 30p stock in 12-18 months as the directors share options require them to meet this target in order to vest fully and the CFO Dmitri knows that paying down the debt/ resumption of dividends will continue to provide the catalysts for a rerate to achieve this objective. ATB with your investment decisions
greg the grinch: It wont be long until the debt will be gone, leaving a dividend of approx 30%? As a holder of 51% of the shares I reckon he will be quite happy about that - if institutional investors want out he wont be crying - he might buy more shares with his dividend.
rivaldo: Here's the summary of Cenkos' upgrade to Buy: "Firing Up The Group’s cash generation and profitability remained robust in H1/21A despite the onset of COVID-19. This enabled the Group to pay down a further £8.2m of term loan principal, resulting in net debt declining 44.6% to £34.9m. In light of improving visibility in industrial electricity demand we release prudent FY21E and FY22E forecasts. We believe OPG is undervalued, trading at a c50% discount to its peer Group. We move our recommendation from Under Review to Buy. H1/21A Financial Performance. The Group’s profitability remained robust despite the onset of COVID materially impacting trading in H1/21A. Government enforced lockdowns caused a reduction in industrial electricity demand. In response OPG reduced plant load factors and in turn generation (H1/21A 831m kWh vs H1/20A 1,440m kWh). This reduction combined with a 1% decline in tariff to 5.60Rs/kWh caused revenue to decline 54% to £36.1m. Adjusted EBITDA, including a one-off £9.6m collection of accrued contractual claims, increased 16% to £19.4m. This in conjunction with lower coal and freight costs supported the Group’s margin profile. As a result, EPS increased 48.2% to 2.9p per share. Deleveraging Strategy. OPG has continued to deliver its deleveraging strategy, paying down a further £8.2m of term loan principal. The Group also refinanced a portion of its debt with non-convertible debentures (NCD), pushing repayments out to June 2022. As a result, net debt has reduced by 44.6% to £34.9m, comprised of £21.1m NCDs, £21.8m term loans, £1.4m working capital loans and £9.4m in cash. We expect the Group to fully repay its term loans by Q2/24, increasing free cash flow to equity and, in time, enabling cash distribution to shareholders via dividends. Forecast Re-initiation. We release prudent FY21E and FY22E forecasts in light of ongoing macroeconomic aberrations in India. We expect revenue of £93.6m in FY21E and £112.2m in FY22E. Importantly, due to a one-off £9.6m collection of accrued contractual claims, EBITDA increases 6% YoY to £33.0m and in line with lower tariffsand marginally higher input costs, declines to £24.7m in FY22E. As a result, we expect adjusted diluted EPS of 3.4p and 1.8p in FY21E and FY22E, respectively. Investment Case. We believe OPG trades below its fair value. The market continues to undervalue its improved capital structure, its highly profitable cash generative business model and the long-term structural dynamics for sustainable growth in the power generation sector. We believe the Group offers value to investors whilst trading at a c50% discount to its peer group (please see valuation section on page 7). We move our recommendation from Under Review to Buy"
thirty fifty twenty: getting 9.5m of CASH is a huge de-risking of OPG. with this and the [14] a couple of months back from old debtors, they will have massively reduced debt in pandemic year. more signifcantly for me, the chart now confirms a double bottom formed at 10p with volume, and the likely price move today takes them well above the 200d and outside the falling trend of the last 12 months. the biz has always been very lowly valued the question is - how low. but i think now with the debt down it is not ridiculous to think debt could be < 1 times ebitda in calendar 2021 and an EV of 2.5times for such a CASH generator that i think will attract many more investors to OPG. ALl IMHO, DYOR + BoL OPG is in my top5 hldgs
jailbird: hxxps://www.dnaindia.com/business/news-indian-economy-to-recover-faster-than-earlier-predicted-say-global-agencies-2857483 Indian economy likely to recover faster than earlier predicted, say global agencies Moody's has revised its annual growth forecast for India to minus 10.6 per cent from the previously predicted minus 11.5 per cent. The Indian economy is likely to recover faster than earlier predicted, according to leading global agencies. Brokerage firm Barclays and Global rating agency Moody's Investor Services lifted India's growth estimates on Thursday. It is in the backdrop of a sharp recovery in the economy during the current festive season. India's GDP had contracted by almost 24 per cent in the first quarter of 2020-21. Moody's has revised its annual growth forecast for India to minus 10.6 per cent from the previously predicted minus 11.5 per cent.
nathandc: There will be a virtual presentation at InvestorMeetCompany platform for investors and analysts at 11 am on 27 May 2020. To register for the presentation, please contact opg@tavistock.co.uk or register at https://www.investormeetcompany.com/opg-power-ventures-plc/register-investor?arc=ffac219d-20c0-4ed5-b428-5b17ea09ef0dAny body see this?Is there a link any where - thoughts?
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