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Central Asia Metals (CAML)

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cshfool
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Central Asia Metals (CAML)

#161018

Postby cshfool » August 21st, 2018, 1:02 pm

A larger AIM share perhaps worth a look is Central Asia Metals Limited (CAML:LSE) , showing good ROCE, low capex, high trailing yield, low p/Book value and low PE ratio. Note most database figs on this one are a bit misleading due to a placing and reverse takeover of the Lynx resources SASA lead/zinc mine which only impacted positively on 2 months of SASA production results (2017), but all of the costs, as well as pound/dollar value mistakes in some databases. Anyway CAML is usually "net cash" but due to the takeover has residual debt, so is not a certain [popular yielding and divesting] type of share yet- nod to the value aged like myself, becoming net cash in 2020/21 if forecasts are met.

Market cap £387m at 220p
Forecast PE 7.5 (VSA) - 2nd August
Yield 7.5% (trailing 16.5p was paid last time)
(nb Quoted Data have a Nav of 300p Sep 2017) for p/bk = 0.7
Net Debt forecast (2018) £72m (dec 2017 $139m)
ROCE typically 40%+ (excluding part year 2017)
adj cash Op Margin typ 60%+ (IC)

A couple of advertorials are available (research is paid for by the company) in the guise of broker notes but my own fragile efforts are coming up with broadly similar numbers, at least on the forecast dividend, to be determined by the new policy of NFreeCashFlowOps 30%-50% going forward. I'm sticking with 16.5p per share forward div (ie held) but could be in the range 11.2p -18.2p, (for $84m NFCFOps) the VSA brokers note has 16.7p forward div. Some databases appear to have values in dollars, but indicated in pounds which is careless. As a database check the div last time was 16.5p, not 21.5 which is the dollar value, nor was it 0p. The forward EPS is all over the place, IC has it at 53c (April 2018- Central Asia Metals smooth pivot) for 40p at $/£=1.3 (vs 25c last time) so it could be a forward PER as low as 5.5 but suffice to say it looks adequately low, and a decent increase, which IC has doubling of course from 25c to 53c (too optimistic IMHO - pre comm price pullback).

Anyway because the impact of the takeover of SASA is not fully reflected in the results yet, it may possibly represent a short term research or arbitrage opportunity in addition to the obvious value - the databases are even wronger than usual (the 1/6th profit contribution factor + some dollar errors), have a go at your own forward figs if you fancy, and a reasoned counterblast. :)

http://www.proactiveinvestors.co.uk/col ... 29971.html

Bear points:

Bongo factor political risk (see Acacia for a true mining shocker story)- Macedonia and Kazakhstan, pullback in commods prices, horrible chart action. IC "income buy" ;) range in EPS forecasts - VSA is slightly more current, presumably guided by CAML management. Tipped yesterday in "Mail on Line." by Alistair Ford apparently, coincidence.

Bull points:

Solid track record in previous smaller guise of copper only Kounrad ops, good FCF, ROCE, current low PER, low book value (from AR) very low cost base, apparently, and forecast eps increase - takeover note. On target results achieved in the 2017 AR and recent production update.

Disclosure; I own some CAML, and I'm super fussy, but I have this as a " buy" at 220p - and a DIY hacked Oakley style EPV from 370p-470p. VSA target 322p, Peel hunt (House broker) 350p. Interim results are expected about 19th September 2018.

csh

DYOR, AIMHO etc. Oh and don't forget that political risk.
-updated reprise from JHalstead thread

PinkDalek
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Re: Central Asia Metals (CAML)

#161068

Postby PinkDalek » August 21st, 2018, 4:16 pm

Thanks for following my suggestion to start a new Topic for CAML. If it helps, when C&Ping an already truncated link you end up with an Error 404 - Page not found message.

Here it is though http://www.proactiveinvestors.co.uk/col ... 29971.html

Spet0789
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Re: Central Asia Metals (CAML)

#161100

Postby Spet0789 » August 21st, 2018, 8:24 pm

I have 5% of my portfolio in CAML - it’s my 5th largest position. I am considering adding more at these levels.

I (obviously) think it’s a great stock. Well run by shareholder-friendly management who tend to over-deliver.

In the metals they produce they have lowest quartile or decile production costs so in a commodity sell off they will remain profitable long after the big boys have begun to bleed and scale back production (so hopefully putting a floor on the market price above CAML’s break even).

I concur on the financials above. To me the main risk is the political risk of concentrated exposure to two jurisdictions.

DYOR.

cshfool
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Re: Central Asia Metals (CAML)

#161112

Postby cshfool » August 21st, 2018, 9:52 pm

No probs Pink, it needed another thread. I have also been contributing to the advfn freeBB on CAML but thought I'd share it here. I also have a relatively large position in this - though smaller than it was after the recent slide. I've put a lot of work into it though that may be an illusion - thanks for the notes Spet I've been trying to do some analysis and forward thinking based partly at first on the "Quoted Data" Martin & co research note and ideas about the dividend. To be honest main thoughts have come from the 2017 AR where I've tried to go through in some detail on the debt, dividend and forward eps expectations by the following method:

1. Subtract the Kounrad 2016 contribution from the 2017 finals
2. pro rata up the remaining 10/12 contribution from SASA - assuming as a rough and ready comparitor that production volumes and prices are about the same as 2016 as a first pass. (I know thats rough!) It may be worth guesstimating average prices and forecast volumes for a second iteration, but I feel comfortable that there will be a large enough eps increase to make this very decent value and a good dividend whilst the value "outs", assuming that it will do sometime. Concern is that RIO/ BLT or similar will try to eat this one up on the qt.

csh


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