Hydrogen Economy
01 Dec 2017
Re: back of an envelope TrueblogThat gives UE for the whole year of 7.8B, i.e. 55% increase. At a 70% Div payout that would be 207P 4-Traders is showing median forecast Net of 7 680 (Unadjusted) for EPS 3.59 and div of 201.DL EPS 359.8 and div of 207.5p That much is broadly in line with your div numbers, but I wouldn't think single year dividend tells us much about value. Looking at the longer term4T EPS 18/19 318p / 279p Div 179p / 166pDL 18 EPS 310p Div 182pNow I realize that forecasts 1/2 years out is like throwing darts at a moving board and for the miners you have to do it with the lights out so who knows, but there is fair risk of China slowing or other factors cutting earnings. What the market thinks is fair value of RIO will depend on noises out of China, Central banks and the tweets from the White House. 4300p would be great but I'd be very surprised if we saw that any time soon. It hit above 4500p at the height of the supercycle ~2011, of course the company and the market are now very different.RIO has had a great run since the dark days of early 2016 and I have gradually sliced down to about half my holding, the rest are a hold for me for now.H2
trueblog
30 Nov 2017
back of an envelope While everything is quiet just doing a back of envelope calculation2016 Underlying Earnings 5.1B, 70 % returned as Div/buyback -->134p2017 1st half 3.9B UE (IOP 68, currently average 71 for year to date and looking stable despite China Winter pollution curbs.)That gives UE for the whole year of 7.8B, i.e. 55% increase.At a 70% Div payout that would be 207P (an all time record for Rio I think, by some margin.)at current SP that would be a full year yield of 5.9%!at a more reasonable 4.8% (similar to the trailing yield) that would imply a sp of 4300p?And that's not accounting for divestment of the 2.7B coal business.That seems pretty good, but is this realistic? Provided the IOP holds up seems like a good bet?So seems like a 20% discount for uncertainty at presentAll DYOR IMO of course!BWTB
gamesinvestor
24 Oct 2017
Re: NEW ARTICLE: Three miners tipped to retu... all subject to commodity prices holding up of course !!!Games
II Editor
24 Oct 2017
NEW ARTICLE: Three miners tipped to return 38-58% "A spectacular performance by miners in 2016 was always going to be a hard act to follow, with the FTSE 350 Mining Index more than doubling in value. But at this late stage of 2017, commodities-focused investors can have few major complaints about ..."[link]
gamesinvestor
23 Oct 2017
Looking like time to move on...... Thinking of selling all RIO and Glencore this week.Why?Well a couple of things -- the shares of both have recovered to 5 year highs or closer to anyhow.Quite a few are pointing out that the commodity prices don't stack up against real changes in demand and that the future demand looks dampened.[link] Woodford, who I'm no fan of, may have a point in this article, particularly about the extent of the size of the trades relative to the actual consumption :-[link] global supply growth has continued to outstrip global demand growth across many commodities, including iron ore and copper."""""""He said fundamental demand for commodities in China is driven by credit growth, with the economy needing to borrow five units of debt for every one extra unit of growth created, according to the International Monetary Fund."""""""He said investing in the commodity companies is akin to investing in continued Chinese growth, as credit growth in the country has "leaked into" commodity prices, representing a "giant mis-allocation of capital.""""The only saving grace for these companies is the debt is not as bad as it was a few years back, but with a halving of commodity prices again, the level of debt won't be a factor in the value of sales which will plummet.Sitting on a 45% gain on RIO having recovered from a 50%+ lossGlencore has been an even bigger swing back from the throes of demise.Games -- Been here before, only to see share prices like Humpty Dumpty fall all the way back down again.
videodawn
22 Oct 2017
Re: New Chairman Yes Laidlaw was laid low at Centrica. No connection with his public customer base. He was challenged on TV to explain why retail gas prices were going up when wholesale gas prices were going down and he rambled on about intricate futures contacts, which were completely lost in the social housing estates of England. He looked haggard when he resigned.
gamesinvestor
22 Oct 2017
New Chairman [link] new chairman is expected to be announced by the end of the year, with Sam Laidlaw, the former Centrica CEO who joined Rio’s board earlier this year, tipped as an internal contender.""Oh dear, looks like musical chairs, and Laidlaw hasn't covered himself with glory at Centrica.Maybe it's time to get out of this, and Glencore at the same time.Games
Lupo di mare
18 Oct 2017
Re: US fraud charges- RIO - Time-line "SYDNEY, Oct 18 (Reuters) - The U.S. Securities and Exchange Commission on Tuesday charged mining company Rio Tinto Plc and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars.In a lawsuit filed in U.S. federal court in Manhattan, the SEC said Rio Tinto, former Chief Executive Officer Thomas Albanese, and former Chief Financial Officer Guy Elliott failed to follow accounting standards and company policies to accurately value and record the assets.The Mozambican coal business was acquired for $3.7 billion in 2011 from Riversdale Mining and sold a few years later for $50 million.2007 - India's Tata Steel signs a joint venture with Australia's Riversdale Mining to develop coal projects in Mozambique. 2008 Thermal coal futures prices rise above $200 per tonne. 2010 Riversdale gets green light to build $800 million coal mine in the country's northwest. Riversdale has predicted that the Benga project will produce some of the lowest-cost coking coal in the world. It later turns out that Mozambiques coal is costlier than competing supplies, especially from neighbouring South Africa. 2010 - Mozambiques transport ministry says that Mozambique will use the Zambezi river to enable inland coal assets to get to a port, which has yet to be fully developed. 2011 After a price crash following the global financial crisis, coal prices soar back as high as $130 per tonne amid expectations that demand from India and China will result in an undersupplied market for decades to come. 2011 Rio Tinto gets Mozambique coal assets as part of $3.7 billion acquisition of Riversdale Mining. 2011 - Rio Tinto's chief executive for energy Doug Ritchie describes the Mozambique operations as the "greatest undeveloped seaborne coking coal region in the world. 2012 - Rio issues a $3 billion bond and an around 1.8 billion euro bond with a 500 million British pound tranche. Some 95 percent of the sterling bonds go to UK investors including fund managers, insurers and pension funds.2012 - Mozambique's government says it will not let Rio Tinto use the Zambezi River to transport coal to the Indian Ocean for export. That means the coal can only get to ports via unreliable railways, which also lack the capacity to handle the coal. The ports are also not sufficiently developed to handle large-scale coal exports. 2013 Coal prices drop back below $100 per tonne. 2013 - Rio Tinto writes off about $3.5 billion on the operation. 2013 - Albanese resigns at request of board. 2014 Rio Tinto sells Mozambique coal assets for $50 million. 2014 - Albanese named chief executive of Indian mining company Vedanta Resources Plc, where he serves until September 2017.2017 - The U.S. Securities and Exchange Commission charges Rio Tinto, along with Albanese and Elliott, with fraud. 2017 - Albanese issues statement saying there is no truth in any of the charges. Elliot will vigorously contest the charges, according to a spokeswoman for the former executive. Rio Tinto says it will defend itself vigorously against the SEC's allegations. (Reporting by James Regan and Henning Gloystein)"
Hydrogen Economy
18 Oct 2017
US fraud charges- RIO & former chiefs This probably isn't going to help. Presumably the exposure for RIO is any potential fine, possibly a bigger issue for Albanese and Co. It's interesting that spending $3.7b in 2011 and selling it for $50m a couple of years later is not an issue, provided it is correctly accounted for.As always seems to be the case when fraud or breach of regulations occurs, the shareholders who suffered from this incompetence are recompensed by being fined on top of losses incurred. Maybe they are deemed complicit by buying the shares and egging on management, who knows. UK have had a go, now US lining up for a bite, who's next?. H2 [link] Tinto and two former senior executives were hit with US fraud charges, and the miner with a UK penalty, on Tuesday for allegedly trying to hide a multibillion-dollar business failure by inflating the value of coal assets in Mozambique.In a civil complaint filed in federal court in New York, the Securities and Exchange Commission said that Rio, Tom Albanese, its former chief executive, and Guy Elliott, a former chief financial officer, had ignored proper accounting standards and misled investors in their valuation of coal deposits that the company had purchased for $3.7bn and later sold for just $50m.[link]
II Editor
12 Oct 2017
NEW ARTICLE: Evy Hambro: Lost money on commodities? Keep the faith "One of the biggest risks investors face is poor timing - buying into a stockmarket or a sector that has reached a peak. But those who hold their nerve, as opposed to panicking and cashing in their chips, should in theory ride out the losses and ..."[link]
LK Hyman
10 Oct 2017
Re: Can this run continue? Cake,"I am trying to assess whether Rio is currently overbought"FWIW I bought some more RIO today. Rumours about them selling various aluminium assets, if true, should help sustain the share price and I like the yield.LKH on the flybridge
give the dog a bone
05 Oct 2017
Re: Can this run continue? definitely overbought but what the 'ec k, the market is always getting values wrong ..happy to hol
cakeslicer
05 Oct 2017
Can this run continue? A good week so far for miners, in particular Rio, when we saw previous weekly declines relative to weakening iron ore. the share price has risen every day this week so far. I would welcome any views out there on whether you feel anything has changed and whether we now see a drive towards £40. I guess the big test is whether we see a continuation of iron ore spot price decline when China opens up next week. Or does it bounce from here?Personally, I cannot see justifiable reason why the iron ore spot price would suddenly turn higher given the tightening measures China are putting forward in the forthcoming winter period to combat pollution control etc. I am trying to assess whether Rio is currently overbought relative to market conditions etc but struggling to get to an answer - perhaps given that I'm a Rio holder and conscious my view is tainted from being purely objective.
LK Hyman
26 Sep 2017
Re: Diamond sale Keith,"a collection of 58 diamonds weighing 49.39 carats"That's less an a carat apiece if my maths is right! RIO must be holding the auction in McDonald's.What is it about Argyle diamonds that make 'em so valuable, I wonder? When I buy a rock I buy a BIG 'un, not a titchy little 'un, even if it is pink.[link] on the flybridge
Kool Keith
25 Sep 2017
Diamond sale LK you in town for the auction? I've check my email, no invite, the cheek of it![link]
