Eadwig
03 Oct 2017
Re: As posted on RIO board Games, "On Dividend -- RIO is already back up to over 5% where Glen is stil 2-3% but expected to rise significantly next year, next year is a long way off in commodity prices innit?"A large part of GLEN's dividend, the guaranteed part which we had this year, is not based on commodity prices at all, so a bit of a strange statement, that. Its based on marketing profits, which remained a steady $2.xBn p.a. since 2011. $1Bn p,a, of which will be paid out in dividends from now on, plus a minimum of 25% FCF from other operations. See my previous posts anticipating what the dividend will be next year.If you want to hold for the long term, GLEN gives you the cover in a downturn, unless it so severe that people stop buying commodities altogether. If we get into a downturn THAT severe, I suggest the difference between GLEN and RIO will be the very least of the things on your mind."In RIO's favour are it's higher operating margins close to 28% compared to Glen at 2%"Not sure where you got 2% from. It makes (slightly) more than in net profits from trading alone. Mining operations are way more profitable, generally. IF GLEN's margin is 2% and its H1 EBITDA was over $6Bn, EBIT over $3Bn, what does that make its revenues??ROCE for RIO and GLEN are not comparable. You aren't gauging two mining companies.GLEN will always have far more capital employed in the marketing portion of the business.I'd have another look at your figures before making the decision. It'd be a shame to base your decision on incorrect info.
Eadwig
03 Oct 2017
Zinc Expansion Glencore has agreed to acquire a 26.73% stake in Peru’s largest zinc miner, Volcan Compañia Minera, for at least $531M and possibly as much as $956M, depending on the level of acceptances.Glencore, which already holds a 7.68% economic interest in Volcan - taking into account an 18.11% holding of Volcan's class A common shares and 0.02% of class B common shares - agreed to pay $1.215 per class A share it has been reported.The company says Volcan’s operations are located in the richest polymetallic production area in Peru, producing some of the highest quality zinc concentrates.
Eadwig
03 Oct 2017
Re: O/T: Eadwig - WSG I topped up today in WSG, before I saw this post. Had been planning to do so at a slightly lower level, but I'm happy with where I'm at at the moment (see that board).Not in anyway driven by events in Las Vegas which I don't think moves the needle for WSG at all. Its all about the fact they just did a placement of £750k @10p in order to see them acrtoss the line for the mid-east airport contract. That contract multiplies current revenues by ten. A magnitude. I'm not expecting the share price to do that, but it doubled on the last rumour the contract signing was about to be completed. I expect it to at least triple IF and when the contract is finally landed.All other operations within the group will then look minor.Eadwig
onewayticket
02 Oct 2017
O/T: Eadwig - WSG Just noted the tragic events in Las Vegas and have rebought some of my previous Westminster Security Group (WSG) shares. Its definitely not one for widows and orphans as it is coming off share price lows I'm hoping it should hopefully benefit in the short to medium term from enhanced demand for hotel security apparatus, x-ray scanners etc. I did ok out out of NCC off a recent cyber threat and getting in ahead of the crowd.I know you held and I think recently topped up.Your thoughts on events?Own due diligence
LK Hyman
25 Sep 2017
Re: As posted on RIO board Games,I've just got one word to say to you, m8. [No, not "plastics"]Koniambo.LKH on the flybridge proud RIO shareholder
gamesinvestor
25 Sep 2017
As posted on RIO board Contemplating selling my remaining holding in Glencore and either keeping my current holding in RIO, or adding to it.In RIO's favour are it's higher operating margins close to 28% compared to Glen at 2%RIO's ROCE -- difficult to measure I know with changing commodity prices but on a stab in the air basis RIO looks close to 10% in current climate and Glencore (I haven't the foggiest to be honest).With RIO one assumes a fairly steady as she goes management - with Ivan and Glencore I don't think one can ever predict what he will do next.RIO is mostly concentrated in Iron Ore which could be a disadvantage in another downturn in construction - Glencore is more diverse but also geographically very fragmented into dangerous and unpredictable regimes I assume.The share prices have both recovered dramatically from the low's :-RIO from 15XX to 34XX -- 120%Glencore probably twice that as it was considered bust 2 years back.Have they both had their day in the sun and it's over the top and down the hill from here perhaps? Both companies earnings are expected to tail off next year - RIO more than Glen perhaps.On Dividend -- RIO is already back up to over 5% where Glen is stil 2-3% but expected to rise significantly next year -- but next year is a long way off in commodity prices innit?On borrowings -- RIO is sitting on £17BN against a pre-tax £6.7Bn last year and Glen was £23Bn last year against a loss -- but looking forward this is improving dramatically for this year at least.Brokers seem to pencil in a 15% upside on both companies.Any views on this lot before I lean on the red and or green buttons?Games
gamesinvestor
22 Sep 2017
Woodford's view of mining This from his Income Fund update for August :-"""Furthermore, we would argue that this behaviour has introduced more risk to certain parts of the market. To demonstrate this, let’s look at what has happened in the UK mining sector – a sector to which the fund is not exposed – over the last eighteen months. The sector had a great run in 2016 and has enjoyed another strong rally over the summer months. For example, Rio Tinto’s share price started 2016 at £19.80. Since then it has risen almost 90% to end August at £37.47. Mining companies like Rio Tinto have benefited from a significant increase in the price of the commodities that they produce. We have missed out on those gains, in part because we did not anticipate the rally in commodity prices, but primarily because we do not believe the increase in commodity prices that we have seen is fundamentally justified.On the face of it, mining company shares may not look expensively valued, because earnings, dividend and cash flow forecasts have all increased broadly in tandem with share prices. But the question we always return to is, “what if those commodity price increases are not sustainable?”. We have written before about the amount of financial speculation that currently takes place in commodity markets in China – the scale is enormous and alarming. >>> I suppose this part is quite telling regarding the amount of trading relative to the actual usage of the stuff :-""""""For example, the amount of iron ore volume that is traded in China every day now regularly exceeds the country’s entire annual output of that commodity. Meanwhile, global supply growth has continued to outstrip global demand growth across many commodities, including iron ore and copper. This fundamental dynamic is naturally more likely to result in commodity price declines, rather than increases, which suggests that something other than fundamentals has been driving price behaviour across the commodity spectrum."""""""""""""Obviously, the China growth story has been central to the investment case for commodities and commodity producers for a long time. Growth has slowed in recent years but policymakers have prioritised economic stability, with annual growth of 6.5% currently targeted, seemingly at any cost. Growth has become increasingly dependent on credit, with the IMF estimating that the credit intensity of the Chinese economy is now close to 5x – in other words, for every 1 unit of incremental output, the Chinese economy now needs nearly 5 units of debt. This worries us – Chinese credit growth far outstrips that of the US and other western economies in the build-up to the global financial crisis. Indeed, it is widely acknowledged that China already has a substantial bad debt problem and policymakers have been increasingly innovative in their attempts to stave off their own banking crisis. They have so far managed to delay that conclusion but are running out of options to continue to do so. There is growing evidence too, that policymakers are becoming more interested in the quality of growth rather than the quantity of it – all of this points to a very different Chinese economic performance in the years ahead, than the one that financial markets have become accustomed to.""""">>>> Woody may have a point, but still he's missed out on the growth so far hasn't he?Games
gamesinvestor
18 Sep 2017
Copper market peaks? [link]
kolwezimundele
18 Sep 2017
Re: H1 Earnings Breakdown Attempt Very good breakdown for lazy people like me - thanks. Once Katanga gets going again, presumably the copper allocation will increase quite a bit, and cobalt will also be added further to the mix. If EVs are indeed the future (the Chinese government seems to think so, anyway) then cobalt could become quite a profitable mineral to mine. Let's hope the DRC doesn't find a way to mess up Katanga the way it has so successfully messed up just about every other opportunity there for non-Chinese companies (Tenke (FCX), Anvil Mining, Tiger Resources etc etc).
testudo1886
18 Sep 2017
Re: FT Article - RIO merger? "Glencore and Rio rise on talk of merger revival" God only knows what share-price chart that headline writer was looking at. GLEN is about to trigger my stops.
gamesinvestor
16 Sep 2017
FT Article - RIO merger? [link] was a talking point on Tuesday as analysts speculated that its merger plan with Rio Tinto might be revived.Games
Clarence Beaks
15 Sep 2017
Disappointing 2nd 1/2 of week Shame really as it was doing so well hitting 370p.
Clarence Beaks
14 Sep 2017
Re: ex-div 7th? Why no drop? Rise in sterling, dip in copper, good rise of late so a sell off.
jaytee41
14 Sep 2017
Re: ex-div 7th? Why no drop? The drop is happening yesterday and today, unless it's because of something else ?
gamesinvestor
09 Sep 2017
Rosneft [link] down some more debt.Games
