FLX - Felix Resources

[Reefer]

Austock and Wilson HTM have their latest broker analysis for Felix up on the Felix website. Wilsons have a target price of $5.56 a share with a DCF valuation of $7.25 share.
"We continue to rate FLX as a strong BUY and one of our “top picks” for 2007. The expected near term approval of the Moolarben project and confirmation of first coal from the Ashton underground are expected to represent significant de-risking points with associated further re-pricing of the stock. Our DCF valuation is $7.25/share and target price $5.56/share. Our FY2007 NPAT forecast of $42.0m (before asset sale profits) has been reduced by $1.0m reflecting slightly below forecast Dec half coal shipments, and with no change to our June half forecast shipments. An adjustment to our assumed Minerva equity interest for the Dec half from 55% to 53%, also had a minor impact. Asset sale profits for the year are forecast at $54m after tax."

 

[Reefer]

Austock aren't quite as upbeat with a 12 month target of $4.50 - should be exceeded in the next couple of days

 

[noirua]

Austock and Wilson HTM have their latest broker analysis for Felix up on the Felix website. Wilsons have a target price of $5.56 a share with a DCF valuation of $7.25 share.
"We continue to rate FLX as a strong BUY and one of our “top picks” for 2007. The expected near term approval of the Moolarben project and confirmation of first coal from the Ashton underground are expected to represent significant de-risking points with associated further re-pricing of the stock. Our DCF valuation is $7.25/share and target price $5.56/share. Our FY2007 NPAT forecast of $42.0m (before asset sale profits) has been reduced by $1.0m reflecting slightly below forecast Dec half coal shipments, and with no change to our June half forecast shipments. An adjustment to our assumed Minerva equity interest for the Dec half from 55% to 53%, also had a minor impact. Asset sale profits for the year are forecast at $54m after tax."

That Discounted Cash Flow (DCF) is an important large chunk ( 62% ) above the current traded price of $4.45, this morning. Despite two others giving FLX a "hold" rating, we should see FLX strengthen more on the bullish tones from Wilson HTM, IMHO.

 

[Reefer]

I agree Noirua. ABN Amro's valuations have been much lower than Wilson's in the past, and even Wilsons estimates have been proven to be too low in hindsight. I get the impression that Wilson HTM are more familiar with coal stocks and seem to go into more detail with their research and assumptions.
Eg the other brokers are assuming big demurrage problems for Felix based on the recent reporting of Rio Tinto and XStrata, whereas Wilsons note there appears "no noticeable impact" on "targeted shipping rates" for Yarrabee and Ashton to date, although they concede these may deteriorate in the next six months. Interesting they qualify those concerns with the thought that smaller shippers are more flexible in handling the delays on the wharves. It may be that the rate of increase in the share price tempers a little, but I feel they still have quite a bit of upside yet.

 

[noirua]

I agree Noirua. ABN Amro's valuations have been much lower than Wilson's in the past, and even Wilsons estimates have been proven to be too low in hindsight. I get the impression that Wilson HTM are more familiar with coal stocks and seem to go into more detail with their research and assumptions.
Eg the other brokers are assuming big demurrage problems for Felix based on the recent reporting of Rio Tinto and XStrata, whereas Wilsons note there appears "no noticeable impact" on "targeted shipping rates" for Yarrabee and Ashton to date, although they concede these may deteriorate in the next six months. Interesting they qualify those concerns with the thought that smaller shippers are more flexible in handling the delays on the wharves. It may be that the rate of increase in the share price tempers a little, but I feel they still have quite a bit of upside yet.

Nothings tempered this morning as Felix move up to $4.60, up 10 cents, in the first 25 minutes in much heavier trading than normal. I know what you mean though, as there is little chance of Felix's share price trebling again in the next six months.
Will be interesting to see if Felix move quickly to Wilson HTM's 12 month forecast or go close to the DCF valuation.

 

[noirua]

Felix power on to $4.73, up 23 cents, with ASK at $4.80. Trading is at over 200,000 shares in the first hour, which is above Felix's normal trading day.
The Wilson HTM comments are lifting Felix towards the $5.00 level.

 

[noirua]

Felix closed at a bit disappointing $4.58, up just 8 cents, after hitting $4.74 early on. Trading reached a heady 1,007,333 shares with 5 large trades going through at $4.58, 140,000, 255,268, 136,510, 101,646 and 101,646. It will be interesting to know who the seller, and more importantly the buyer, was and whether the most likely happened, the bargains were matched.

 

[noirua]

Felix stock is quieter today, though marginally on the plus side after heavy trading on Thursday. Interest surrounds the three major holders in Felix stock as they together near a 50% holding in the company. This would give them two clear options:

1). They could stop any predator in their tracks.
2). They could agree a bid and recommend to shareholders, what would be close to a done deal.

 

[noirua]

Felix fell yesterday to $4.53 and once again recovered towards the close, reaching $4.70 in lighter trading than of late. The full half yearly results will be out in three weeks time on 26th Feb 2007.

Interest remains strong on the awaited go ahead of the Newcastle Port expansion that FLX have an interest in, and the Moolarben open-cut development.

 

[noirua]

Another day of widely varying prices greets us, with market depth showing bids and offers all over the place. Will be interesting to see if late buyer/buyers arrive late in the day, once again. Closed yesterday at $4.70, opened today at $4.57 and fell to $4.43 and recovering now at $4.55.

Analysts reports show wide variations; the most bullish is Wilson HTM with a strong buy recommendation and 12 month target of $5.56; ABN Ambro see a price of $3.95; and others giving buy, sell and hold recommendations.

 

[Reefer]

Your intraday trading pattern has been confirmed again Noirua. The Austock clients trying to reach their target of $3.85 seem to disappear after the morning session, the ABN Amro dealers fiddle in a holding pattern over lunch and early afternoon, and the Wilson dealers come back from a long lunch each day, pretty well tanked up, and fly into the market late trying to push to $5.56. Bit of a bumpy ride for all concerned!!!

 

[noirua]

Your intraday trading pattern has been confirmed again Noirua. The Austock clients trying to reach their target of $3.85 seem to disappear after the morning session, the ABN Amro dealers fiddle in a holding pattern over lunch and early afternoon, and the Wilson dealers come back from a long lunch each day, pretty well tanked up, and fly into the market late trying to push to $5.56. Bit of a bumpy ride for all concerned!!!

Off again it seems, with a sharp drop of 13 cents to $4.52 after Felix recovered to $4.68 yesterday, after $4.43, and closed at $4.65. Very odd trading is going on and having followed closely for nearly 25 years, this is very much a new pattern, and I wonder why?

 

[Reefer]

I agree it's a bit disconcerting. It's almost like there are a few card players out there trying to off suit each other. On such low volumes it must be each side trying to get the best deal on their trades. I guess with such wide variance in the broker estimates of the yearly price target it's a matter of who has the stronger hand on the day as to where the price will go. I think the February announcement of the half yearly results will be good - whether it is already factored into the SP or has any bearing on the SP is anyone's guess.

 

[noirua]

I agree it's a bit disconcerting. It's almost like there are a few card players out there trying to off suit each other. On such low volumes it must be each side trying to get the best deal on their trades. I guess with such wide variance in the broker estimates of the yearly price target it's a matter of who has the stronger hand on the day as to where the price will go. I think the February announcement of the half yearly results will be good - whether it is already factored into the SP or has any bearing on the SP is anyone's guess.

It seems that a UK Broker, Hargreaves Lansdowne, has offered to sell Felix Resources Stock free of charge, for its UK clients. Sources site a matched trade arrangement with an Australian Broker.

 

[Reefer]

There are some pretty average "Sells" out there - 3 sellers for total of 646 shares, 1 seller for 256 shares. Was there some new issue in the past (like 1 for 83 or something similar) that I missed which created all these small holdings, or is it brokers playing funny games. I sold 4000 VSL some months ago and the trade all went through on one day but broken up into about 20 small trades. Is this how brokers do it ??

 

[noirua]

There are some pretty average "Sells" out there - 3 sellers for total of 646 shares, 1 seller for 256 shares. Was there some new issue in the past (like 1 for 83 or something similar) that I missed which created all these small holdings, or is it brokers playing funny games. I sold 4000 VSL some months ago and the trade all went through on one day but broken up into about 20 small trades. Is this how brokers do it ??

I can remember, however, at the 2,000 meeting, that the Chairman said that the majority of shareholders were based in the U.K., Southern Ireland, Germany and US. Many of the small holders sold out at the equivalent of 93 cents when the $500 buy-back rule was enacted - US holders were not included.

Thoughts are that German holders still have around 5% of FLX stock that is regularly traded in Germany. Many UK holders wrote declining the $500 rule and held on to their stock.

There lies a big problem. The major and large shareholders have nearly 65% of the company and UK holders that never trade, may have another 20%. Most are thought to be with Hargreaves Lansdowne and TD Waterhouse.

This all happened because trading on the UK AIM market came to an end when the previous MD, Mr Jon Parker arrived.

It would be interesting to know who is interested in Hargreaves Lansdownes' Felix Holdings.

 

[noirua]

Felix are doing the downward move early on, for the umpteenth time. Closed at $4.62 yesterday and trading now at $4.51. The Half Yearly Report on 26th February will be important in determining Felix Resources cash pile situation, after sale of parts of Minerva and Athena, Yarrabee and Ashton.

 

[noirua]

Felix once again managed the recovery trick. Falling to $4.50 and finishing 1c up at $4.63 in very light trading. One reason given for low prices early on is, selling from the UK, "at best"; A UK Broker has combined with another to trade stock, "for free".

 

[noirua]

Felix Resources finished the week at $4.64 after another down day, finishing with a late recovery, for the eighth day in a row. Stating this fact again may be a bit boring, though the two way push and pull is interesting. Will FLX break up or down from here?

 

[noirua]

Felix Resources produce mainly Thermal Coal with some PCI and semi-soft coking. The following article shows a bullish view for thermal coal: http://au.biz.yahoo.com/070119/19/125j6.html