Good post Hub, sums it up very well re pageant. My take is here there is very good money to be made from these levels, inties will in my opinion drive the sp forward over this year, but before that happens they will want to see 2 quarters of solid production, which am sure the company will meet, insties will pay 20% more for a company that shows solid performance rather than a speculative approach it's the way they work.
My holdings increased significantly at 31.49p this morning. The truck was backed up and so I followed through with the buy call. It is still cheap and the slow stochs on the daily and weekly were on zero this morning.
Perusing the various comments made about the company and reporting, I feel that there are some people who are wrestling with the valuation without personally knowing the board members. I try to go to company AGMs as often as I can sensibly fit them in as one gains an insight into the personalities behind a company: are these competent people whom I respect? Are they really management material? Do they really understand their business? Do I trust them? Do they make a genuine effort to engage shareholders and answer their questions in detailed and knowledgeable way? Do they take on-board shareholders concerns/ criticisms? This sort of detailed engagement and understanding can only be really gained by attending multiple meetings: the chickens start to come home to roost half truths will start to unravel over time.
For example, a few years ago I gave the CE a real grilling at an AGM including going through HUM's a list of risks and mitigations - I enquired how the planned mitigations were proceeding. He did reasonably well and displayed a good knowledge of what was going on. The Chairman approached me afterwards and thanked me for doing "his job". At the last AGM I said that I did not feel that enough emphasis (as a mining company) was putting enough emphasis on their (excellent) safety at work in their annual report. The chairman agreed with me and said that the next report would address that issue.
One thing that always concerned me was the possibility that lots of cheap shares might have been issued to fund a mine and in turn dilute my holding. One thing to note, was that it was not in interest of the CE to do that as he already had a large shareholding and in discussions it was obvious that he was very keen not to unduly dilute his holding. Now of course that is not an issue - if anything it might soon be in HUM's interests to start to buy back some shares if they remain at the current depressed levels.
To stop beating around the bush - I always found the HUM BoD very competent experts in their respective fields. They have maintained over several years a consistent quality/ responsible/ professional approach giving me enormous confidence that HUM is being managed in an efficient and adaptive way. HUM has shown itself to be nimble in addressing problems and to safely navigate itself forward.
To conclude my valuation of the company not only includes a valuation of the company's business, but also the personnel who are running it.
Pageant are bascially a one man show. Run by Nick Furlong who made his initial millions via video gaming I think. He then ploughed some dosh into Irish property (at the right time) and has since been investing his millions across the various sectors.
He's not minted like some hedge funds etc so tends to have to move money around like the rest of us albeit in greater volumes. I believe he rotated some money out of PVR last year post duster campaign and then popped it into HUM as a holding or go-to safety trade (Gold etc). He's now moving money back to PVR as far as I can see ahead of next years BArryroe campaign... but that's just a hunch.
By taking out SR Globals overhang, he helped the share price at the time. It's unclear if he will sell down to zero and my guess is he may leave 1% to 2% in the stock as a hedge and to gain exposure to GOLD. I don't think he's a distressed seller which might explain why the sp bounces off 30p/31p levels as he probably has his minimum price limits.
Over he last 6 to 8 months HUM has seen some large holders come and go. The share price has often 'stuck' at agreed price points to get these swap deals or transfers from one ii to another sorted.
SR Global created a drag on the sp when they began clearing out at 26p in Q3 2017. Looking at the following block trades, Pageant came in at 27p levels and took the remaining stock off SR Global which instantly took the shackles of the sp and provided the sharp and fast climb to 38p+.
Now it's Pageant time to reduce this stake or sell out. They've been doing so for the last 4months+. As per RNS's a new II called Sustainable Capital popped up with 3.99% suggesting they took on a sizable wedge of stock over the last 6 months.
I suspect HUM's analyst meeting was designed to open the door and eyes to new II's which may come in and take Pageants stock off them in one block trade deal. Looking at SOLG yesterday, a 25m block trade was done which possibly relates to previous 25p placing. But the point here is that any large block trades tend to happen at an agreed price. In HUM's case that could be 30p or 35p etc etc. The good news is, these major sellers which hold the price back from time to time are doing so at levels that are pre-news or first gold sales. That should provide for a better share price platform for when HUM finally delivers the first gold sales and full production status.
It might be annoying and the impatient grow more impatient etc but the truth is, once a seller is cleared, share prices often move or correct upwards very quickly. So hopefully in near future, the 'reality share' watchers will get their excitable fix of a 10% or 15% day rise.
We all hope so, in the long distant past I used to Hug and hold shares. Now I am more ruthless and maintain gains, when Shares fall. If I had not followed that process with a XCITE and GKP I would have been burned.
Always leave some profit for the next person.
Taking into account current value of sterling, USD and current gold price to that of 12 January. The current discount today on Hummingbird is now at least 9%. This ignores the fact that in January the company was just filling up its production circuit and in theory is now in full production. Baby is being thrown out with the bath water, no matter how you look at this.
You are probably right, and I hope you are but.... communication could easily and cheaply done, It does not even have to be a RNS, they could give weekly production updates.
I am still holding but I know others have already derisked - I am close to doing so myself.
Flycat is absolutely right. If you do not have a quarterly reporting diary which is dead easy for a professional AIM company to publish and do on what their production results are and what the quarterly earnings will be, then investors are denied proper due diligence to support he positions they hold on the stock during the year.
This issue has been raised with the company from a number of sources and they are not answering. This is a complete change from how they were responding a few weeks back in March. I am waiting patiently, but we need that diary soon. They should operate the diary on a calendar year and not April to April financial year.
This old posting of yours gave an expectation that Pageant was well on the way to selling out. Today's after hours RNS at last confirms that Pageant's holding is now finally <3%. It might explain the recent share weakness despite a good production RNS being expected soon?
Sometimes things can be misread an email or not as well written. The AIM comment is mainly a reflection of the behaviour of other AIM companies I have come across in the past. My concern is that Hummingbird goes down that route in the future. Hopefully they won't.
Bit unfair on this Dan and the company as they have had an excellent track record in keeping investors up to date and they have done quarterly updates pretty much religiously. The next one is due any time now, which should be the first full quarter of production which will give us all an idea of how things are progressing in terms of ramp up of production and how close they are to the targeted production rate, and how sales are going.
Those are good questions as a lot has happened since last year. The cost of production is likely to be higher in dollar terms as that currency has declined 6-7%. The gold price is higher to compensate. We think it is 125,000-135,000 ounces for April 2018/19. However most other companies in the sector run 1 January to 1 January. In my opinion they need to amend all their figures and regard Q1 as filling up the circuit with gold. 10,000-12,000 ounces of gold actually sold is a great outcome if that occurred. The next 3 quarters should be 90,000 in total and we have a lower figure for 2018 at 100,000. This would allow 2019 to have a higher production target over 2018.
If the company does not want to run proper quarterly diaries, accounts and production profiles, I will divest from here. This is a big issue for me as an investor. I will give them a few more weeks but I am absolutely fed up with the AIM keeping them in the dark approach and they report when they feel like it and only share info to an elite inner investment circle.
I think you are spot on - it's rather perplexing that as investors we are trying to guess when and what we will get by way of quarterly production and financial information.....without it, the market can become suspicious and unsettled. I hope HUM are preparing something soon!
The company needs to deliver a future quarterly production output and financial reporting diary. This is my only criticism of the company thus far and is dead easy to put right. All investors need to know in advance when company reports as this offers transparency. Some sources suggested 11 April for an RNS and we did not get one.
Looking at the timings of previous RNS's, we should be due the first full quarterly production figures any day now, which should hopefully start the process towards a re-rate, as there may well be some initial figures to accompany them.
You sound a little tired. Why not take the spring/summer period off? If I recall, that's your normal pattern?
I agree with your observations re: high street and general downturn in consumer spending. House market is the one to watch. Negative numbers leading up to the imminent UK rate rise surely means more negative numbers to follow as belts tighten further and mortgage affordability reduces. If UK property dipped by 10% over the next 18 months it would not surprise me one bit.
The DOW has been up and down more times than poor Sergio at the 15th hole in Augusta. These 3% to 5% major indice swings are largely driven by the algo's and not the common retail investor. The latter often gets dragged into the equation when using stops or margin etc etc. It creates a snowball effect so yes... often you see a broad sell off on stocks regardless of their quality. But equally, hedge funds funds turn to gold as do many investors which does not just include solid gold but Gold ETF's as well as other pegged trades.
I believe the key to any folio management is to mitigate risk while maximising reward exposure. Hence tapping into a sector that has already been battered is not a bad idea at all. Commodities are back in demand after being in a bear market for some 4 years+. Gold has not had a 'large' run for years now. We've seen currency spikes, crypto's etc and major indices all do well. Gold is long overdue a run to the 1600's or 1800's again imho. HUM is an early producer and as such not priced based on full production or upcoming cash flows but instead, discounted based on risks of the unknowns. Risks that they may not deliver the production levels as forecasted. With higher POG and derisking of the asset via continuous production / sales targets being met, HUM should double from today's prices with ease whether the DOW is at 26000 or at 18000. Either case supports HUM's growth.
Other stocks that often out perform the market when a downturn hits are high impact explorers. MATD as you well know has massive targets coming up with 100% ownership. Due to small market cap and their exciting regional positioning (close to china) they could double, triple or quadruple upon success or even a sniff of success. with 4 x drills planned, any dusters will just dent the sp slightly before rebounding for the next drill and so on. Funding stocks that have a 'reason' to buy them is the key when markets are wobbly. You need stocks with strong catalysts and upward news flow.
Looking at trading activity across the board on First ISA day (friday), the major indices were taking a hit while many of the commodity focused stocks were bouncing higher. It's taken a while to rebalance but I believe going forward, the investment banks will have to seek out riskier growth stocks to gain their growth rates targets as the days of easy money via qe across the major indices looks gone.
When the economic s*** hits the fan the price of Gold goes up. Is there any better time to be invested in an ambitious, competent and undervalued gold producer, at the start of an epic journey, at the start of the next economic crisis?
I think not, which is why I'm buying as much HUM as I can. Almost up to my ears!
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