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These are excellent news! I would be even happier to have it in writing, though.
Dear Valueinvestor01,
may I respectfully point out that I do not agree with your opinions on RD's intentions.
I also equally respectfully decline your - certainly well intended but perhaps somewhat strongly worded - attempts to shield me and other followers of this forum from information about HERB. I, for one, find that information interesting.
Thanks for this information. Would you please keep us informed? It would be great if they would allow this.
However, I'm somewhat curious. With whom at Nordnet did you speak? From my contacts with them, it seemed quite certain that SIAF could not be kept in a KF after the delisting (but they told me indeed, for what it's worth, that the shares would be transferred to a normal account at a later stage).
I have no problem with SIAF giving their directors shares as compensation as long as the company buys these shares in the market and does not dilute.
To me, this EPS figure - though I assume formally correct - is misleading, as it is based on the average share count for the year.
I think it is more interesting to look at the yearly EPS based on the number of shares at the end of the period: 35 cents.
No. I wrote that you stated it as a fact.
Thanks for sharing!
And this is also a nice illustration of how easily rumours and worries begin on this forum, given the general lack of trust in the company.
Not very long after RD's observation on the non-signature, another board member stated as a fact that the company had no CFO and two board vacancies.
May I draw your attention to the fact that the Q3 report displays the situation end-September, and that the company declared earlier that it would reach positive cash-flow mid/end Q4?
For me, I think the report basically was good news:
1. The company makes a profit, debatable how much, but I would personally(*) state 8 cents/share, which is rather impressive for one single quarter for a share which costs 20 cents.
2. The profit is stable or increasing for most business segments, and total revenue is 38.7 MUSD, to be compared with 34.0 MUSD last quarter.
3. This profit level allows easily a dividend of 10 cents/year, which is what the company has announced as its intention; this corresponds to a yield of 50%. As a theoretical exercise, the current profit level would allow the company to double the dividend, thereby increasing the yield to an astronomical 100%. And it would still have some profit left.
4. Another positive indication, though not listed in the report, is that the last dreaded dilution took place on October 10th, which translates into a longest interruption this year and a decent hope that it has ceased definitively, exception made for 1.5 M shares flagged for issuance in 2019 in the Q2 CC.
Make no mistake: this company has a lot to prove and a horrible track record as far as the share price is concerned. I certainly would not recommend anyone to invest with money that they couldn't afford to lose. But IF - a big if - things turn out as one can hope, this stock can in my view increase tenfold from its current level.
(*) with some kind assistance. :)
Indeed, good point. Then we would land at 8 cents.
Even better.
I am. My rationale is simple: I believe that the company will pay the announced dividends, for a total of 15 cents in the coming year - and then a share price of 20 cents is - how to put this?
Cheap.
1. The EPS of 0,09 is calculated on a share count of 36,65 M. The current share count of 49,36 M gives an EPS of 0,066.
2. 6.6 cents earned in a single quarter will comfortably allow a dividend of 10 cents/year. Which gives an almost ridiculous yield of 50% based on the current share price.
Agree.
This is another observation from the survey:
There are several very strong and in my view reasonably likely triggers in the pipeline: the end of dilution, the 2018 cash dividend, 2019 and later dividends and the TRW distribution, all of which have been announced as intentions by the company.
But a substantial number of the respondents are uncertain about or outright sceptical to these triggers.
For each of these triggers that comes true (assuming this is what will happen), the sceptics' confidence should increase, together with the share price.
It should be recalled that a majority of the respondents believe that the share is undervalued and will increase massively in price in the coming years.
Once investors believe that the dividends will arrive in a stable and reliable manner, I do not think it will matter much if it's paid yearly or monthly.
Yes, this is also one of the points I noted. Those with an excessively negative view of the company are also excessively active on the fora, which distorts the picture these give.
The survey aimed at getting a view of what people interested in SIAF currently think about the company and its outlook.
I did only ask questions that I considered interesting. The one you suggest isn't in my view: I assume that those who would like to sue the company, Solomon or whoever will do so.
Survey result
Dear all,
As I indicated that I would publish the result of the survey when a significant number of replies had been reached, which I personally defined as 60 replies, below a link to the result:
https://surveyhero.com/results/99485/b58f0b334166df922eda64c08d1aca8e
Obviously this has to be taken with boatloads of salt and it certainly doesn't purport to illustrate anything else than the current general attitude to SIAF among the small minority which follows this forum and could be bothered to reply.
I take the opportunity to thank RD for his recent message to Tony. Much appreciated.
Survey Reminder
Your opinion would be much appreciated.
This is a small reminder for those who didn't yet see the survey whose 12 questions can be found on:
https://surveyhero.com/c/b85724db
I will publish the results when there are a decent number of replies or on Friday Nov 16th, whichever comes first.
This is a risk, certainly. But apart from the few lunatics on my ignore list, I would believe most people capable of separating their personal feelings of deception from their rational expectations of the future. We'll see in a week.
Feel free to spread the survey btw.
https://surveyhero.com/c/b85724db
SURVEY - What Do You Think?
Dear all members of this clever forum,
as I have recently been through a humbling experience as to my predictive and analytic capabilities and moreover believe firmly in the wisdom of the crowds, I hereby launch a small survey to find out what we collectively think about this share.
Your opinion would be very much appreciated.
The survey (12 questions) can be found on:
https://surveyhero.com/c/b85724db
I will publish the results when there are a decent number of replies or on Friday Nov 16th, whichever comes first.
There may be some reminders published, not to often, to make sure that everybody gets the chance to participate. Bear with me and if you really can't stand it, there is an ignore button.
I couldn't agree more.
As zero is on my ignore list for exactly the reasons you mention, I do not see his posts, but the replies to the nonsense he produces take up valuable mindspace, which could be used in a better way.
Just ignore him, please. Or reply in private.
Dear RD,
It seems we got clarity in the few business days, that you were entirely right and I thus was all wrong. Thanks for your efforts to spread truth on this site.
Well, as I remember it, the part on overall financial performance was longer and more convoluted.
Still, a max increase of 1.5 M shares in 2019, though certainly not welcome, is bearable. In particular if the share price starts heading north in earnest.
They committed with a reservation. Look at jyyoo's message nr 144853.
And we also know that the company stated in the most recent CC, with some conditional reservations which were not easy to understand due to the rotten sound quality, that it would commit to limiting the issue of new shares in 2019 to a maximum of 1.5 M, for normal corporate incentives.
Still an impressive number and I would be far happier if they gave out shares that they previously had bought on the market instead of issuing new ones, but not tens of millions of new shares.
This is not really certain.
There is still space under the 50M ceiling, it is probable that the dilution had to pause while the TRW distribution took place and the company has stated that they will only expect a positive cashflow in mid/end Q4, where we're not yet.
Looking to the past, it is true that we have enjoyed 17 days of blissful freedom from dilution. But we had 20-day periods without dilution both in April and June, so we are not out of the woods yet.
I take note of your assertions, as always advanced with eloquence and energy.
We will have certainty in a few business days and until then I suppose we will simply have to agree to disagree.
Just one point on the following:
SSAGroup are probably referring to stock dividends in general...
The argument against RD:s views are not only based on the information communicated by the company.
What do you even mean by this? Provide specifics.
They said it is in their hands to a large extent.
That is as may be. Frankly, I do not care whether I "win" or "lose", in the sense of being able to say "told you so" in some more or less distant future.
The reason why I frequent this and similar forums is to learn what others say, and bring my own humble ideas to light. If we all stay honest and polite, and bring forth our best arguments, we will all get a little bit wiser and better informed in the end.
For the record, though I have generally a deep respect for RD:s stamina and knowledge, I side with jyyoo here.
The argument against RD:s views are not only based on the information communicated by the company. To me, the most significant fact is that the process we discuss is not, formally, SIAF providing a dividend but TRW executing an option in order to clear debts.
SIAF's management has been quite clear that the entire process is in the hands of TRW. I suspect they got rather strict advice fom their tax lawyers in this respect.
TRW is incorporated in Hong Kong, so presumably not subject to US regulations.
And even if it were, the shares distributed by TRW correspond to 18.3% of the company, thus less than 25%.
I can only repeat my conviction that the probability that the OTC ex-date would be different from the Merkur one is less than 5%.
And then it is up to all of us to make use of the wisdom of the crowds.
I would also argue that the value of this bonus is quite uncertain. We talk about 5% of the part of the 2019 net income that exceeds 20 MUSD.
Extrapolating from the most recent 10q (net income in H1 2018 ~ 5 MUSD), we will not get any bonus at all in 2020. Of course, if CA starts gushing cash, the situation will change.
I find the following text more significant:
"It is the Company’s intention to carry-forward the cash dividend policy being implemented for FY2019 into its subsequent years of operation and will
inform its investors as to its cash dividend policy for FY2020, FY2021, etc. as these years approach..."
As I interpret this, the Company will try to provide a 10 cent dividend in 2020 in addition to the bonus based on the 2019 net income.
One possibility could be that the "market" ascribes a far lower risk to the distributed TRW shares, as they most likely are immune to dilution. Otherwise the last days Merkur movements are incomprehensible.
Drop of share price 3.6 - 2.25 = 1.35 NOK implicit value of TRW distribution per SIAF share.
As SIAF retains the same number of TRW shares as they distribute (at least), the TRW value per SIAF share after distribution is also 1.35 NOK.
SIAF will also pay a bit more than 1NOK per share in cash dividends over the coming five quarters.
Sum: 2.4 NOK.
I believe that this means either
a) the rest of SIAF is worth less than zero.
b) SIAF remaining assets are subject to a substantial dilution risk rebate
c) the market is inconsistent. :)
Why would the Q3 earnings be bad?
My understanding is that TRW does not issue shares, but distributes shares in its possession.
It would incidentally, in my view, be difficult to justify this distribution to TRW's owners (who are different from SIAF's owners) if it would incur a substantial loss to TRW.
This makes only partial sense. SIAF would make a loss from this operation, yes. But the value gained from the cancellation of debt for TRW would in my view be exactly balanced by the loss of the shares distributed.
Beg to differ.
"If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment."
"On."
https://www.investor.gov/additional-resources/general-resources/glossary/ex-dividend-dates-when-are-you-entitled-stock-cash
Alternatively, OTC traders read the Oct 5 announcement and acted on it.
As for me, I do not believe that there is even a 5% probability that a share bought on the OTC as from today will be entitled to the TRW dividend.
Based notably on the aforementioned announcement.
For what it's worth, I still believe that yesterday was the last day you could buy a SIAF share and still be entitled to the TRW dividend. I have detailed the three indications I consider relevant in an earlier post.
But I admit that the share movement today suggest that this opinion is not universally shared.
We'll see. As for me, I do not have the time or will to sue anybody, so I'll just play it safe, buying what I need already now. And I have no intention to sell SIAF any time soon anyway.
But how would you then account for the Enzon example on the page I linked to?
Cash dividend of 2 USD and stock price 6.47 USD, and the 25% rule was not applied.
I believe the possibility that you are right is quite high.
First, SIAF is also listed on Merkur, and the rules for large distributions may not apply to this exchange.
From this page, it moreover appears that the special rules for distributions above 25% are not always adhered to, even for US exchanges.
http://groupssa.com/understandingdividenddates.html#the_following_section
"Note: The 25% rule is a general rule, not a strict one. It is not always applied with distributions of 25% or more of a stock's price. Foreign stocks traded on U.S. stock exchanges may or may not be subject to the rule, the decision being made on a case-by-case basis. The 25% rule is not always applied to U.S. companies either; there are occasional exceptions granted."
Finally, the distribution announcement seemed very clear in this respect. Own SIAF on October 31, and you get TRW on Nov 14. To own it on the 31, I believe Ineed to buy today at the latest.
For me, this means that I have bought what I need of SIAF today and I would expect the stock to drop tomorrow, but by how much, I do not know.
Any views from the panel? ??