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LMC buyout offer of RNO. Noticed that the holders of RNO warrants were screwed. LMC is offering C1.04 for them and they had closed at C1.20 the day before. The warrants don't expire until Sept 2008 so it doesn't seem right that LMC can simply erase some of their time value with the buyout offer. Legal thievery?
ARG.to (argof.pk)- I like this one as well. They had some production problems (due to others) which have been resolved and it even pays me over a 4% dividend while I watch it grow.
That also makes two of my favorites that LMC has feasted on. The only problem is that they buy them too cheap. Only a 3.7% premium over yesterday's close. We are running out of smaller cap base metal miners that trade on the US exchanges. Interesting that the acquisitions of both were announced within a week of earnings PRs by EZM and RNO.
edit: Cl001, you may be right about BWR's turn to be bought out coming soon, apparently others are thinking the same. I just saw it is up 10c today.
Bobwins, Does ILI manufacture their own flexpipe or are they a distributor for an outside manufacturer? If it is an outside manufacturer, do you know who it is and how long ILI has an exclusive sales arrangement wtih them? Does anyone else manufacture a similar product. Thanks.
Moly...cl001, sorry to say that I missed the moly blastoff although I guess that I did catch a wind of it with QUA yesterday.
Congrats on your moly positions and thanks for sharing!
Why does it take so long to develop a new mine? With most metals at or near record prices there certainly are strong incentives to get new mines operational asap. Unfortunately, bugs often appear that slow everything to a grinding halt. Here's a recent article:
Tiny animals stop Australian mine
The discovery of tiny, cave-dwelling animals measuring just 4mm in length has halted plans to develop a $10bn (£5bn) mine in Western Australia.
Environmental protection officials rejected the iron ore mine proposal from mining giant Rio Tinto when 11 species of troglobite were discovered.
The troglobites are tiny cave-dwelling creatures which resemble spiders.
They feed on organic matter deep underground and will die if exposed to ultraviolet light outside their caves.
The chairman of Western Australia's Environmental Protection Authority (EPA), Wally Cox, said the proposed mine would cause the extinction of at least five of the newly-discovered species.
Approval process
A Rio Tinto spokesman said the company would appeal against the decision.
"It's just part of being in the mining business," said the spokesman. "We support the EPA process in general."
Opposition environment spokesman Steve Thomas said the EPA ruling put future developments in the state at risk.
"Because [the government has] upgraded the requirements of the mining sector in the environmental approvals process to find what's out there, they go out there and find things," he said.
Troglobites have no eyes but have long front legs or feelers to find their way around in the dark.
Story from BBC NEWS:
Good question, Cl...QUA mgmt is having a webcast at 8:30 PDT this morning which should provide answers.
From QUA's PR: A conference call regarding this transaction on Friday March 30th at 11.30am EDT (8.30am PDT).
The North American toll free number for this conference call is 1-800-769-8320 while the international number is 1-416-695-9719. To access the simultaneous webcast and slide presentation, visit Quadra's website at www.quadramining.com or www.InvestorCalendar.com. The playback version of the call will be available until April 6th, 2007 at 1-416-695-5275 or North American toll free 1-888-509-0081.
QUA...I don't see anything not to like about it. QUA would be picking up a resource with 560 mil lbs of moly for $34 mil worth of stock. That is only 6c a lb. Moly is selling for $30/ lb now. QUA expects the mine to be able to produce 40 mil lbs a year, that is worth over $1 billion. I have to see what they expect mine development costs to be though.
Minority stockholders will be pissed but since QUA says they have firm approval of the 78% majority stockholder, the minority s-h probably can't do anything about it (the risk of buying into a company with a majority owner). Maybe QUA will join the moly train charging up the mountain as moly stocks have been on fire. Glad I've been adding QUA over the last few weeks. It looks like the market likes it too as QUA stock is heading north.
RNO, I'm glad I was busy and away from the ticker today so I did not have the chance to buy back any shares but I will be looking to buy back in over the next 3 weeks. After that the market will likely start looking forward to Q1 earnings which should be excellent.
I have also kept most of my LIM. The downside is 70c, which is what xstrata's cash offer is for. I figure there is about a 1 in 3 chance that another bidder will come along with a higher offer. And then xstrata will probably beat that one. A 1 in 3 chance of seeing $3-$5 more upside vs a max of 70c downside is a winning bet to me.
GACF..Uuughhhh as I have a small position. I always seem to lose with anything connected to airlines. Gotta remember to fly them but not buy them.
cl001, I have also sold most of my RNO. On the one hand, we know they will have a powerful Q1 with much higher nickel prices and those numbers will be out in only 6 weeks. On the other hand, it already had a large runup earlier this week on the LIM buyout news plus many daytraders are probably salivating at the 29c Q4# which includes one time events. I also remember that mgmt is not the strongest when it comes to conf calls. Throw in the old adage, buy the rumor and sell the news which keeps ringing in my ears. Anyway, I sold most of my shares in premarket trading at 4.21+.
RNO: Todays PR shows that the fully diluted share count is 164 million in their income statement. I checked the BMO presentation and the 194 mil diluted share count includes 25 million warrants that are exercisable at $4.60 which is just out of the money (just in the money after hours). I believe that in computing diluted share counts one should assume that they would use the proceeds of the warrants being exercised to buy back their own stock. So the fully diluted count would be nowhere near 194 million.
I don't believe RNO will recognize any gains on their income statement from their Chariot investment unless they sell their stock in that company. Also it looks like the derivative loss was reduced by 1.2 million from the Q3 report so I think that was their gain on the hedges in Q4.
RNO earnings out after close earning 29c in Q4 vs. analysts estimates of 15c. That does include a one-time tax credit of $16.9 mil. Without the tax credit they earned 18c diluted. Stock is up in after hours and should be a good day tomorrow.
RNO...I'm not counting on any hedging profits or losses in my Q4 estimate of 18c. Chariot was actually up in Q4 but I am not counting on any gains there either. I am concerned that they may start a hostile takeover of Chariot. With LIM being bought out, RNO becomes a bigger fish to fry for someone else. They may feel it is better to buy than be bought.
But you're right, RNO's earnings always seem to be more complicated than one would expect. We will know soon.
RNO earnings...I'm thinking (and hoping) that RNO will beat the analysts Q4 earnings estimate of 15c. Compared to Q3, there should be no derivative losses, I'm expecting the avg nickel sales price to be about $2 higher, plus sales were higher than Q3. I'll throw out my guesstimate at 18c. I just hope they don't throw us a curve this time.
FTAR...It appears that they may be going out of business by the end of next year. This comes from the just released 10K.
The Company's operation of the footwear departments in Kmart stores accounts for substantially all of the Company's net sales and profits. The Company's agreement with Kmart provides for the termination of this business by no later than the end of December 2008 and permits earlier termination if we fail to meet the minimum sales tests, staffing obligations or other provisions of such agreement. If the Company does not identify, develop and implement viable business alternatives (which we have not to date), the Company will be required to liquidate its business by no later than the end of 2008.
FWIW, Wade here is why I don't believe the housing bubble will drive the market lower:
First, only a relatively small portion of the country has seen the housing bubble. Mostly it has occurred in sunny coastal areas. Lets assume that home prices there have doubled in the last 3 years. Let's say that prices in those areas will lose half of that gain. That still means that while prices would drop about 25%, they still will be up 50% from 3 years ago.
Now look at the stock market. Both the Dow and the nasdaq have only increased about 20% over the last 3 years. That is certainly not a bubble and still is a smaller rate of increase than the bubble bursted housing markets after their correction.
No doubt, there will be lots of sad stories about people who have lost everything, not to mention the poor lenders who in their greed gave them all the big loans with little or nothing down and minimal documentation. But in the grand scheme of things, I sure don't see it breaking the economy. No doubt the media and politicians will continue to focus on it and draw it to our attention, but I really don't see it as being the iceberg that sinks our Titanic economy either. I expect that life will go on despite the screams of some pundits who expect our ship to sink.
I'll continue to look for and buy mispriced and undervalued stocks and take my chances on the general market gyrations.
Thanks cl001 for the insider buy info on LBE. Also worth noting that the big buyer, Gerald Feldman, is a director there and he is a "numbers" guy. This is from LBE's website:
Director
Mr. Gerry Feldman BA BCom(Hons) CA, is Managing Partner of Feldman Associates, LLP, Chartered Accountants. The firm provides a full range of professional services including but not limited to auditing and accounting, corporate and personal tax planning, management advisory services and business investigations. The firm specializes in audits of brokerage houses, public companies, Investment Councilor and Limited Market Dealers, Mutual Fund Dealers and Mutual Funds.
Mr. Feldman is a member of the Institute of Chartered Accountants of Ontario and of the Canadian Public Accountability Board.
cl001, For LBE, could you give me the link that shows the recent insider purchases there. Thanks
In Scenario B, the overall market has likely dropped 20% or thereabouts, so a portfolio loss of 3% is much better and would be a winner in my book.
OK, Let's consider the following scenario:
A guy has $100,000 in cash to invest. He is concerned that the market may be overvalued
He decides to invest as follows:
50% in money market funds at 4% interest.
25% in QID (=shorting the NSDQ 100)
25% in microcaps.
Scenario A: His concerns are unfounded as the market shows a substantial gain over the year. One year later he sees this:
$50,000 in MMFs grows to $52,000
QID value drops from $25,000 to $20,000.
The microcaps double from $25,000 to $50,000.
So, his net assets have gone from $100,000 to $52,000+$20,000+$50,000= $122,000 or a net gain of 22% for the year. (Or would you argue that the gain was 100% which is what the gain on the microcaps was?)
Scenario B: The guy's concerns were right on the money and a year later the guys portfolio looks like this:
The $50,000 in MMFs still grew to $52,000.
The QID value went from $25,000 to $30,000.
The investment in the micros dropped from $25,000 to $15,000.
The way I see it, this guy's portfolio is now at $52,000+$30,000+$15,000=$97,000 for a loss of 3%. In my book that guy is still a winner in those circumstances but it all depends on how one counts the apples and the oranges.
researcher, I think Warren Buffet has made similar comments to yours.
1900% in 3.5 years works out to a 132% average annual return. Wade, if you can keep that up for another 3.5 years, for every $10,000 that you started with will turn into $3.6 million! Another 7 years from that and you'd be a billionaire!! Better cancel that QID (=shorting nasdaq 100) purchase, you'll never make it holding that.
1900% in 3 1/2 years certainly is incredible. I was curious and checked to see how Wade's picks in the PSL contests have done. The answer is not nearly as well. He has been running a little below the middle of the pack on average. Coming in at #36, 60, 69 and 43 in PSL2-5 out of roughly 90 contestants per contest. Wade, have you been holding out on us with your biggest winners or maybe you forgot to include your slower movers in your running total?
Good question but I think it is safe to say that the LME didn't provide warehouses for zinc to see them stand empty. Copper pricing has been strong lately (I think we hit a new high price for 2007 today), yet most of LME's warehouses for copper have something in them. Here is that breakdown:
Antwerp -75 1225 100
Avonmouth 0 0 0
Baltimore -225 5725 1925
Barcelona 0 0 0
Bilbao 0 1175 900
Bremen 0 0 0
Busan 0 2000 0
Chicago 0 0 0
Dubai 0 150 0
Genoa 0 0 0
Gothenburg 0 0 0
Gwangyang -200 3350 3600
Hamburg 0 0 0
Helsingborg 0 2500 0
Hull -25 5725 300
Johor 0 0 0
Leghorn -275 14350 725
Liverpool 0 0 0
Long Beach 0 1525 275
New Orleans -250 46575 925
Rotterdam -75 43175 2600
Singapore 175 7025 25
St Louis 0 29525 1750
Trieste 0 1600 400
Tyne & Wear 0 0 0
Vlissingen 0 10150 0
Total -950 175775 13525
LME zinc stocks-Not sure why but Dubai was the only warehouse with an increase in zinc stocks yesterday. Below is a breakdown with change in inventories in the first column and total inventories in the second column. Pending sale inventories are in the final column. There are sure a lot of empty warehouses out there.
Antwerp 0 0 0
Avonmouth 0 0 0
Baltimore 0 0 0
Barcelona 0 0 0
Bilbao 0 600 0
Bremen 0 0 0 0 0 0
Chicago 0 0 0 0 0 0
Detroit 0 0 0 0 0 0
Dubai 5725 5725 0
Genoa -25 200 100
Gothenburg 0 0 0
Hamburg 0 0 0
Helsingborg 0 0 0
Hull 0 0 0
Johor 0 10100 675
Leghorn 0 0 0
Liverpool 0 0 0
Long Beach 0 0 0
Los Angeles 0 0 0 0 0 0
New Orleans -425 51175 3000
Rotterdam 0 0 50
Singapore -175 27200 5450
St Louis 0 0 0
Trieste -25 75 350
Tyne & Wear -25 2000 100
Vlissingen 0 0 0
Florida Homebuilders...It is getting very tough...I noticed that C T O N, a florida homebuilder microcap stock which was often followed on this board in the past had not issued a PR for Q4 earnings. After looking at their 10K, I now see why they didn't want to talk about it. Here are the Q4 numbers:
Sales in Q4 O6 were $520,000 vs. $6.25 Mil in Q4 05.
Loss was 13c vs profit of 10c a year ago.
Zero backlog vs. 4 homes in backlog a year ago.
SMTX... Listened to CC, looking ahead, management is projecting a double digit increase in revs plus a larger profit margin for 2007 so that should bring good news. The company would not provide any guidance for Q1 but as I look back at the PRs of their earnings releases last year, it has been their policy to only provide annual guidance, not quarterly guidance. They did say that they expect the last half of 2007 to be stronger than the first half which is the same as in 2006. A year ago, they had revs of 59.9 Mil and earnings of 6c in Q1 (vs an 18c loss the year before that). I don't expect them to earn as much in they did in Q4 but it still should be a very favorable comparison to the year ago Q1 at 6c.
GACF...The initial reaction was bullish but then it went bearish...Probably the market was a big factor but investors probably decided that they didn't like the shuffle in mgmt there either. I added to my position on the weakness....I also believe the PR is a positive.
Last but certainly not least...I am looking forward to see what SMTX does tomorrow. That was a great earnings report.
Lawson is very active in the poker tournament circuit around the country. His career winnings are approaching $800,000. He won nearly $40,000 at a big poker tournament in LA last week. Much more fun than the mundane insurance biz:
http://www.pokerpages.com/players/profiles/48315/-.htm
Here's a great shot of the big winner at the poker tables:
http://gallery.pokerpages.com/gallery2/main.php?g2_view=core%3AShowItem&g2_itemId=5728&g2_GA...
BMC- I'm not seeing a pink sheet equivalent for this one. Is there one?
Megamillions...The states call it a $390 million lottery but the cash value is less than 60% of that or $233 million before taxes. If a private company did that type of promotion they would be lambasted for deceptive advertising and probably sued.
Zinc and zinc stocks...LME zinc stocks have now dropped 8 days in a row and also for 15 of the last 17 days. One would never know it looking at the price of zinc which has also dropped over 8% in the last 8 days (including today which has a nice uptick). I'm sure the crummy condition of the general markets has much to do with it but I expect that sooner rather than later, the market will return to focusing on the zinc shortage and prices will head back up. LME inventories bottomed last December while prices peaked at over $2/lb. Today prices are down to $1.49 while inventories are back to within 6000 tons of their December low.
Looks good for zinc producers such as BWLRF and HBM which are old favorites of this board.
BTW, the inventories for Copper have also been declining recently dropping for 9 of the last 12 days. Nickel inventories have increased for 8 of the last 12 days, although inventories were still down overall 342 tons in that period. Perhaps current nickel prices are finally beginning to ration supplies.
AEY inventories are at about 6 months worth of sales but they have always carried large inventories. They are not a manufacturer but rather a distributor of new, discontinued, and refurbished items to the cable industry. They need to carry a large inventory on hand to have them available for orders. They also picked up a large supply of "legacy" digital cable boxes recently and they expect to sell most if not all of them by the end of June.
It looks like the seller may have showed up during his lunchbreak and then left as the price has recovered nicely.
FNI.to... This canadian nickel miner is having a great day in a sea of red after reporting a huge increase in nickel reserves. They also recently announced more rich nickel veins that are not in the new report. FNI took a swan dive earlier in the year after encountering some production difficulties, but those also appear to be behind them now. They expect to produce 4.7 mil lbs of nickel, 3.2 mil lbs of Copper and 86,000 lbs of cobalt in 2007. 93.7 mil shares are outstanding.
http://biz.yahoo.com/ccn/070305/200703050376292001.html?.v=1
OT- currency risks...I have trouble believing that anyone savvy enough to recognize and take advantage of the interest rate spread differential between Japanese and US bonds would also not be aware of the currency trade risk in the type of trade discussed in the article. In reality, the currency risks are far larger than the potential gain from the bond trade which is only 5% per year.
Market slowly heading back up as it often does after a big fall. Interesting that the huge 9% drop in the chinese stock market earlier in the day is what is seen as a big catalyst for the big drop in US markets yesterday. I have also seen articles indicating that what sparked the chinese market sell-off were rumors of the chinese government plans to begin taxing capital gains at a 20% rate. Those gains are not currently taxable. I sure like the idea of not taxing investment capital gains. I know that will never happen here in the USA but I hope our legislators take notice of what could well happen if talk of increasing taxes from stock market gains returns to the foreground.
btw, the chinese government killed the idea of taxing stock market gains before the market opened today and their stock market bounced back today...finishing up 4%.
Interesting that while the nickel stocks you mentioned took a bath along with the rest of the market, the spot price of nickel actually went up today in spite of the stock market's plunge. My best guess is that once the emotion of the fear factor fades, investors will realize that the shortage of nickel and other metals is far from over and days like today are opportunities more than anything. China is already backtracking on why their economy may be overheating...Tomorrow should be a MUCH better day for the markets.
Funny that last night I was thinking that it is getting too easy to make money in this market. Slam, bam and thank you ma'm....that temperamental lady known as the market sure took care of that problem for me today.
Btw....Water for fuel? Water is composed of Hydrogen and oxygen and both are highly combustible by themselves. The problem is that it takes a good amount of energy to separate them. So no, I can't believe that the new water fuel is for real.
Zinc...Going going... Here's a breakdown of LME warehouses. The big increase yesterday was all at Singapore (added 3250). The only other change was Tyne which dropped 25. The cupboards are completely bare in 16 of 24 warehouse locations. Following that is an article from the Toronto Sun which forecasts a continued zinc shortfall this year and next. If that turns out to be correct, we should see zinc prices return to record levels.
Antwerp 0 0 0 0 0 0
Avonmouth 0 0 0 0 0 0
Baltimore 0 0 0 0 0 0
Barcelona 0 0 0 0 0 0
Bilbao 600 0 0 0 600 0
Bremen 0 0 0 0 0 0
Chicago 0 0 0 0 0 0
Detroit 0 0 0 0 0 0
Dubai 0 0 0 0 0 0
Genoa 75 0 0 0 0 75
Gothenburg 0 0 0 0 0 0
Hamburg 0 0 0 0 0 0
Helsingborg 0 0 0 0 0 0
Hull 0 0 0 0 0 0
Johor 2475 0 0 0 100 2375
Leghorn 0 0 0 0 0 0
Liverpool 0 0 0 0 0 0
Long Beach 0 0 0 0 0 0
Los Angeles 0 0 0 0 0 0
New Orleans 56175 0 0 0 55475 700
Rotterdam 50 0 0 0 0 50
Singapore 37375 4000 750 3250 31075 6300
St Louis 0 0 0 0 0 0
Trieste 725 0 0 0 100 625
Tyne & Wear 2350 0 25 -25 2150 200
Vlissingen 0 0 0 0 0 0
Total 99825 4000 775 3225 89500 10325
510
>Teck Cominco sees demand rising for zinc
Feb 23, 2007 04:30 AM
Teck Cominco Ltd., the world's second-largest zinc producer, said a global zinc deficit may widen next year as supplies lag behind demand.
Zinc demand exceeded output by 315,000 tonnes in 2006, the International Lead and Zinc Study Group said in a report. The shortfall will narrow to 89,000 tonnes this year and widen in 2008 on supply limits, Teck Cominco officials said.
Zinc prices on the London Metal Exchange more than doubled in 2006, extending a rally to four years. Demand for the metal, used to rust-proof steel, surged, especially in China, the world's fastest-growing major economy.<
BWR..bwlrf.. I am very happy with the numbers they put out. Quarter numbers beat the consensus analyst estimate by 30% and that is with their Myra Falls being shut down for 10 days because of a 200 year storm and operational difficulties with ventilation. Langlois will enter production around midyear and they are projecting 2007 zinc production to be up another 30% in 2007.
I think tomorrow should be a very good day and the S/P will only go up from here....show me the money, breakwater!