Pure Gold Mining Share Discussion Threads

[napoleon 14th] 24/1/2014 09:58

I'm now alergic to IQE.
Enough, enough!

[puffintickler] 22/1/2014 11:27

AdamB1978, Woody

Thanks for your replies. I had not correctly updated my own calculation following the placing, o/o and consolidation. My figures are a little less optimistic than your sources, but I prefer a surprise on the upside.

Even with my pessimistic figures a PER of 8.4 (SP 80p, fully diluted) in a growth company does rather shout BUY!

[woodcutter] 22/1/2014 10:03

DL are indicating for this year and next year (which is probably at risk)

eps 8.88p per 8.9 this year
eps 9.75p per 8.1 next year

IQE

eps 1.6 per 17.2 this year
eps 2.4 per 11.4 next year

Accepting IQE is considerably larger and perhaps a little more diversified, PUR still looks undervalued to me.

WC

[adamb1978] 22/1/2014 09:38

pufftickler - the forward PE I quoted was taken from Motley Fool, which source their data from Ditial Look I believe. I dont have my spreadsheets with me however my figures are broadly around the same level

[woodcutter] 22/1/2014 09:28

I guess it's a double whammy whilst the yen has depreciated against the dollar the pound has appreciated. Nevertheless the underlying business is strong and well managed. Buy the weakness and wait for exchange rate reversal.

A number of posters have commented on the forex futures believing that the yen will remain weak against the usd, from what i've read a lot of commentators are expecting the yen to strengthen. But that's exchange markets so we'll have to see.

Whilst the statement was no change for this year you could construe it as a vieled profit warning for next years figures.

As Benjamin Graham said in the short term the market is a voting machine in the long term it's a weighing machine.

Patience!!

WC

[mudbath] 22/1/2014 09:23

The trading statement,just like the dilution that preceded it some months earlier,has served to dampen investors enthusiasm for PUR as an investment.
PUR should remain a cash generating cow for some time to come which should help underpin the share price
The chill wind of serious competition and its corresponding effect on margins could well intensify over coming trading periods.
This increasing competitiveness in the reclaim industry has been well flagged and was the reason behind my fully exiting the stock; as I pointed out in
October,

"The industry is cyclical and my research indicates that there are pricing pressures, being exacerbated by increasing competition,particularly in the USA; whilst of course there are those unwelcome process factors apparent at the Prescott facility."

I wonder how Jerry Winters is doing with the emissions situation.

[aishah] 22/1/2014 09:21

While the Federal Reserve has begun a modest tapering of their massive QE program, the same is not true for the Bank of Japan (BoJ). The trading and investment implications are mouth watering.

I estimate that the BoJ will add another ¥700 trillion of QE in 2014.
Using the prior 12-months of QE and subsequent price action, each ¥100 trillion of BoJ QE pushed USD/JPY higher by 300 pips.

Thus, with another ¥700 trillion expansion, my USD/JPY forecast is for 122-125.

www.fxstreet.com/analysis/fx-technical-commentary/2014/01/06/

[puffintickler] 22/1/2014 08:59

AdamB1978

Where did you get your prospective P/E from?

[adamb1978] 21/1/2014 19:29

puffintickler - I think its hard to say that there was froth in the share price. Before today's fun, it was trading on just under 11x Jun-14, despite now being more or less debt free, 40% additional capacity additions to their biggest product about to come on stream and about to begin dividends.

I don't think that that's remotely frothy, particularly in today's market

[puffintickler] 21/1/2014 18:40

All that has happened is the trading statement has blown the froth off the price bringing it down to a more reasonable level.

Not a profit warning but it does rather rule out surprises on the upside which the market was factoring in to the price.

A slight over-reaction though, I expect the price to settle in the 80-85p range.

Well done those who sold in the high 90s.

[brownie69] 21/1/2014 17:49

Agree with those who feel this is an over reaction.
Exchange rates the issue and they fluctuate all the time.

Given that they say profits are on track why have they made an announcement at all? My understanding is that a "material" change requires a profit warning, and they are not warning on profit!

[adamb1978] 21/1/2014 17:37

I assume the news in the process of leaking and therefore they were forced to announce it. Otherwise the mid-day announce does look odd

[napoleon 14th] 21/1/2014 16:55

I was out too.
Not terribly fussed; $/Y rate not set in stone.

Yes, they could have RNSed on time...

[roadster750] 21/1/2014 16:50

Woody, if im not mistaken its 40% capacity increase at each plant.

[paleje] 21/1/2014 16:12

All well and good saying they'll meet current profit forecasts but the yen prospects for 2014 aren't so good and beyond that who knows. Mitigating some of the currency/price disadvantage with production improvements is ok but how much we can't tell. Better watching from the side for a while, wish I'd been in when the RNS issued, why can't they release at 7am like most others.

[woodcutter] 21/1/2014 15:45

With US QE likely to slow and indeed reverse and the added possibility of interest rate rises coupled with abenomics continuing to provide QE to the japanese economy, hence downward pressure on interest rates, my view fwiw is there'll be exchange rate pressure on the yen and it will begin to unwind against the dollar. I think we are beginning to see the early signs of that already.

aimho.

Woody

[woodcutter] 21/1/2014 15:25

Agree Steg

www.xe.com/currencycharts/?from=USD&to=JPY&view=5Y


The exchange rate $/Yen has moved about 16% in the last twelve months and is now at the highest it's been for 5 years and recent trade suggest it's falling again. Although it has been higher before the last financial crises.

Nevertheless 16% is a significant competitive advantage. You could either retain prices and profit the 16% or reduce prices and take a little less than 16%. It's a short term advantage and as i said rates flutuate and the economies of scale after start up of the 40% expansion in productivity will help.

Over-reaction imv.

woody

[itchycrack] 21/1/2014 15:18

That's exactly why I sold, the prospects for the JPYUSD rate will not be in PURES favour for the foreseeable future, meaning possible future profit warnings IMHO.

[roadster750] 21/1/2014 15:12

pure really dont want the pi onboard do they, release a pathetic t u in the hope of shaking a load out, seems to have worked,

[stegrego] 21/1/2014 15:06

I think some people need to learn to read. Not a capacity issue, not a pricing issue as such. Is due to jap / us exchange rate.

[philjeans] 21/1/2014 14:56

Bags of scope here for expansion and we'll see much lower finance costs going forward.

Chuck in a possible take-over for free.

Topped up - buy the dips.

[stocktrawler] 21/1/2014 14:44

Just goes to show how competitive this business is! Out at 93p!!

[adamb1978] 21/1/2014 14:04

So the PE is now down to 9x on the back of a non-profit warning! I share woodcutter's view that given its the FX rate which has hit pricing rather than over-capacity, its less of a concern. Am a bit surprised that they bothered announcing the lower turnover figure given its only 5% and profits are in-line

[simonparker5] 21/1/2014 14:04

Trading update is not nearly bad enough to knock this by 20%. Come on, it is only 5% of revenues and they will meet profit forecasts.