- Joined
- 5 March 2018
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The trade war doesn’t really affect them , the production was actually up last year . As discussed about 1 million tonnes of ore is pre sold till 2022.
I don't think the current trade war is helping their position.
Systems heavy on it, and good news so far even todayGrange Resources taking off this morning after announcing its FY 2020 financial results. Currently up 14.8% to 50.5c.
View attachment 120631
$204 million net profit in 2020 and a market cap of around $500 million.
Seems to be some real value here at current prices, or am I missing something?
GRR is selling at a PE of 3, with forecast of next years p/e virtually the same. Its paying in excess of 5% dividends fully franked.Based on this AFR piece, Grange Resources (ASX: GRR) seems to be benefiting from China's planned reductions on the steel industry, as Grange mines the iron ore and produces iron pellets in Tasmania, removing a step for Chinese steel makers..
China emissions cuts stoke record premiums for quality iron ore
All types of iron ore are fetching bumper prices, but the boom is proving sweetest for those selling lump and pellets as quality premiums surge.www.afr.com
The GRR's price has been going well since late last year.
It definitely tempting to lock in those profits, particularly given the volatility of iron prices. But I think I'll wait to reduce the pinch from the taxing on the capital gains.52 week high reached for last couple of sessions.
Sold half, as a 30% profit in a few weeks is too good to pass up.
Mick
Still. 30% profit in a few weeks is very good. And who knows where the iron prices will go.I played with some equations a while back.
Compound annual growth rate (CAGR) is:
CAGR(p,s,t) = (s/p)^(1/t) -1,
where p is the purchase price, s is the sell (or current) price, and t is the total time of owning the shares in years.
Compound Annual Growth Rate (CAGR) Formula and Calculation
The compound annual growth rate (CAGR) measures an investment's annual growth rate over a period of time, assuming profits are reinvested at the end of each year.www.investopedia.com
I modified this CAGR with a tax rate r such that 0 <= r <= 1 representing the (capital gains) tax rate. This tax only affects the gains of selling at a profit, that is s>p. We write s=p+(s-p) and replace the untaxed profit (s-p) with the taxed profit (1-r)(s-p). Now we replace s with p+(1-r)*(s-p) in the original CAGR formula. This gives the post-tax CAGR:
post-tax CAGR(p,s,t,r) = ([p+(1-r)*(s-p)]/p)^(1/t) -1,
I believe that holds . (Perhaps I should have just googled the answer.) We can check the intuition if we assume zero tax (r=0) or total tax (r=1), giving respectively (untaxed) equation or zero growth rate.
That's not quite true.Fair enough then. Taxes become less of a burden with a SMSF -- something I have to look into next year. It's either that or move to NZ where they have no taxes on capital gains.
You mean in NZ you pay no tax on profits if you can prove you're an investor? Interesting. Thank you.That's not quite true.
If you are deemed a trader you must pay tax on profits. If you can prove you are an investor then no tax to pay. Grey area of course.
Yep, that's correct.You mean in NZ you pay no tax on profits if you can prove you're an investor? Interesting. Thank you.
I have been trying to research this one.That's not quite true.
If you are deemed a trader you must pay tax on profits. If you can prove you are an investor then no tax to pay. Grey area of course.
I have been trying to research this one.
I have been searching the ATO website for treatment of trading versus investing.
I had a chat with my accountant, and at first glance, she says she is not aware of any provisioning for the ATO to declare that an SMSF is acting as a trader rather than an investor. She thinks that because I am using such a small proportion of the funds for trading stocks, it would be difficult to argue that the fund is acting as a trader. Most of the funds are in fixed interest, property and longer term held shares.
I am waiting for her definitive response.
Mick
I have been trying to research this one.Porper said:
That's not quite true.
If you are deemed a trader you must pay tax on profits. If you can prove you are an investor then no tax to pay. Grey area of course.
I have been searching the ATO website for treatment of trading versus investing.
I had a chat with my accountant, and at first glance, she says she is not aware of any provisioning for the ATO to declare that an SMSF is acting as a trader rather than an investor. She thinks that because I am using such a small proportion of the funds for trading stocks, it would be difficult to argue that the fund is acting as a trader. Most of the funds are in fixed interest, property and longer term held shares.
I am waiting for her definitive response.
Mick
As a bit more info, they also have a very low cost means of getting the ore from the mine to the pelletising plant which is located on the coast with the ship loading just out the front.Grange mines the iron ore and produces iron pellets in Tasmania, removing a step for Chinese steel makers..
Aggh, buggered it up again.Hi Mick,
Just for the record @Porper was referring to New Zealand tax law in his post above.
Cheers, Rob
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