TMF tip - Fresnillo - what am I missing?
Posted: June 17th, 2019, 11:55 am
Folks - like many (I guess) I receive the emails promoting the Motley Fool tip service - and I suspect like many of us I have a soft spot for TMF even though I never took out any of their paid services plus at least I feel their "tips" are not trying to sell me anything - they're just selling their tipping and analysis service.
I get the US and the UK Fool emails and sometimes my curiosity is piqued enough to do some digging ... often the US ones have already been "exposed" and a simple Google using a choice phrase from the anonymised description will yield the answer as to which company it is and on at least one occasion (American Tower - AMT - in the US market) I've bought some and so far (up 50% in 2 years) I'm quite pleased!
Today I received one entitled "The FTSE Double Agent" which spins a story about a FTSE100 mining co. that is under-appreciated and misjudged by the market - and which they believe offers a long term growth opportunity. The linked article (https://www.fool.co.uk/order/nm24061720 ... 7bda3c2617) keeps the company name hidden but since it includes a table of some basic fundamentals (revenues, profit, dividends) it's not too difficult to trawl through the FTSE100 miners and find that those figures published on various sites (e.g., on Hargreaves Lansdown at https://www.hl.co.uk/shares/shares-sear ... nd-reports) correspond to Fresnillo.
Here's where I am surprised - this company has had a sagging SP for a while, there's been some (mistaken I believe bad press about Mexican law changes and a potential threat to permits) and they apparently missed expectations for FY2018. But even at their historically depressed share price, they're still trading on a P/E of 22.94 and although revenues have grown every year for the last 5 years, I see profits have been up and down significantly and then there's the risk of holding foreign shares, currency exposure implied, Mexican permits/legislation problems etc.
So, without buying the TMF service, which might include some hidden gem or truth, can anyone see my scepticism about Fresnillo? Why should this be a good tip when - as Benjamin Graham might say - the price of ownership is high, I believe too high?
I get the US and the UK Fool emails and sometimes my curiosity is piqued enough to do some digging ... often the US ones have already been "exposed" and a simple Google using a choice phrase from the anonymised description will yield the answer as to which company it is and on at least one occasion (American Tower - AMT - in the US market) I've bought some and so far (up 50% in 2 years) I'm quite pleased!
Today I received one entitled "The FTSE Double Agent" which spins a story about a FTSE100 mining co. that is under-appreciated and misjudged by the market - and which they believe offers a long term growth opportunity. The linked article (https://www.fool.co.uk/order/nm24061720 ... 7bda3c2617) keeps the company name hidden but since it includes a table of some basic fundamentals (revenues, profit, dividends) it's not too difficult to trawl through the FTSE100 miners and find that those figures published on various sites (e.g., on Hargreaves Lansdown at https://www.hl.co.uk/shares/shares-sear ... nd-reports) correspond to Fresnillo.
Here's where I am surprised - this company has had a sagging SP for a while, there's been some (mistaken I believe bad press about Mexican law changes and a potential threat to permits) and they apparently missed expectations for FY2018. But even at their historically depressed share price, they're still trading on a P/E of 22.94 and although revenues have grown every year for the last 5 years, I see profits have been up and down significantly and then there's the risk of holding foreign shares, currency exposure implied, Mexican permits/legislation problems etc.
So, without buying the TMF service, which might include some hidden gem or truth, can anyone see my scepticism about Fresnillo? Why should this be a good tip when - as Benjamin Graham might say - the price of ownership is high, I believe too high?