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Interested to hear why you think lithium will run out steam if you're willing to share your thoughts.
Interested to hear why you think lithium will run out steam if you're willing to share your thoughts.Hi rabbit,
Spent some time doing FA & TA for MIN - so here we go -
As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.
Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.
Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).
Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.
ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.
EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????
Technicals:-
Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.
The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.
The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).
The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.
SP has rattled around within a “100 Day Linear Regression” (pages139–142)
CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.
TA does not support a Higher SP.
View attachment 147158
Summary:-
Certainly NOT a Buffett Style Stock.
IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.
FA & TA Do NOT support any great SP hikes in the ST.
In fact, both FA & TA Suggest ST Downtrend.
Cheers M8
Once again, Thanks Dr for your chart and commentary, really appreciate your help when you are busy. I still hold my stand of around 60 that will create an interest for me to keep a real close watch.Hi rabbit,
Spent some time doing FA & TA for MIN - so here we go -
As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.
Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.
Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).
Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.
ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.
EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????
Technicals:-
Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.
The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.
The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).
The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.
SP has rattled around within a “100 Day Linear Regression” (pages139–142)
CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.
TA does not support a Higher SP.
View attachment 147158
Summary:-
Certainly NOT a Buffett Style Stock.
IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.
FA & TA Do NOT support any great SP hikes in the ST.
In fact, both FA & TA Suggest ST Downtrend.
Cheers M8
Hi waterbottle,Interested to hear why you think lithium will run out steam if you're willing to share your thoughts.
given the price i bought into MIN ( average sub $14 ) anything positive i say about MIN will look like ramping or gloatingMIN doesn't seems to get a lot of shareholder love on the chat boards.
Nevertheless, as a lithium play it's been on the rise of late and up a further 10% on speculation that it will list its lithium assets in USA. Early stages yet tho.
OK - ran my Slide Rule over MIN - Margins of Safety rate as Average - Ratios rate as Very Good.Hi rabbit,
Spent some time doing FA & TA for MIN - so here we go -
As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.
Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.
Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).
Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.
ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.
EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????
Technicals:-
Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.
The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.
The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).
The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.
SP has rattled around within a “100 Day Linear Regression” (pages139–142)
CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.
TA does not support a Higher SP.
View attachment 147158
Summary:-
Certainly NOT a Buffett Style Stock.
IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.
FA & TA Do NOT support any great SP hikes in the ST.
In fact, both FA & TA Suggest ST Downtrend.
Cheers M8
Well posted. No one size fits all. All our financial needs n values are different.OK - ran my Slide Rule over MIN - Margins of Safety rate as Average - Ratios rate as Very Good.
Also noticed a few more problem areas - Revenue has not increased as expected - Costs are not being passed on to clients - Very Bad PE in relation to NTA - Share Price is running well above NTA - SP is Expensive in relation to CPI - and the 10 year Bond Rate provides Better Value than MIN's high Share Price.
Although I've calculated an Intrinsic Value for MIN, I am not all that confident in it due to the wierd Financials that MIN produced recently.
So, for what it's worth, my IV Call for MIN is somewhere between $50.13 & $50.98, and my Buy Price is $49.29.
I'm happy to post details of my research, but remember my research suits my needs, that research may not meet your needs
SO DYOR.
Information on what I look for within a Co's Financials is set out in the Forum "DrBourse FA Help for Beginners".
Information on what I look for within a Co's Technicals is set out in the Forum "DrBourse TA Help for Beginners".
Additional Information of a General nature is set out in the Forum "DrBourse General Help for Beginners".
I could post a .pdf of the actual Spreadsheet Calculator here, but most will not be able to follow what it all means.
Cheers.
DrB
See below for probable reason.Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).
Two announcements from the companies this week revealed slightly different takes on the story – which centres on the restructuring of the MARBL joint venture between the duo. Talks have been ongoing for a year since the original announcement at the start of 2022 about the revamp of the JV and its expansion.
As a result, MinRes will not be able to move into lithium hydroxide production in Australia and instead will have to spend well over a billion dollars paying Albemarle for 50% stakes in its two Chinese plants as well as a separate payment of $US350 million, less a payment from Albemarle of between $US100 and $US150 million. Albemarle will also increase its control over the Kemerton plant’s two trains (in southwestern WA). The original state a year ago this month called for the Kemerton ownership to remain 60% Albemarle and 40% MinRes.
Instead it is 85% Albemarle and only 15% for MinRes, a significant change and Albemarle will operate both trains. Albermarle will also supply MinRes’s 15% spodumene quota for Kemerton from its share of the output of the Greenbushes mine. MinRes will pay market rates for the key ingredient – no mates’ rates there. The Kemerton plant will continue to be fed from the Greenbushes mine nearby – its 49% owned by Albemarle and 51% by the joint venture of IGO and Chinese lithium giant Tianqi (who are building their own hydroxide plant at Kwinana).
MinRes does get to lift its stake in its Wodgina mine in the Pilbara, albeit only from 40% to 50%. And MinRes gets back management of this mine, which is another plus. The deal also sees MinRes acquiring a 50% interest in Albemarle’s wholly-owned Qinzhou and Meishan plants in China. The latter plant is currently under construction and has a design capacity of 50,000 tonnes a year. It is due to start commissioning next year. The former plant currently has a capacity of 25,000 tonnes a year and will need modifying to convert Wodgina spodumene, according to Albemarle.
The 50% stake in the two Chinese plants was not mentioned in the 2022 statement – Albemarle will get $US660 million from MinRes and will continue to manage both plants. (The deal has to be approved by Chinese authorities, but MinRes shouldn’t have any concerns seeing it is in a WA iron ore JV with a big Chinese steelmaker.) That’s the other big change from 2022 and even that is not what MinRes would have preferred – half ownership is OK but management and/or operation control, shared or otherwise, would have been far more valuable to the Perth company.
“We are delighted to have reached these binding agreements, which cement MinRes’ place as a world-leader in lithium mining and leverage our partner Albemarle’s strong track record in battery chemical production,” CEO Chris Ellison said in the statement on Thursday. “By growing our battery chemicals business and expanding into global chemical marketing, MinRes will become one of the world’s largest fully integrated lithium chemical suppliers to auto manufacturers, capitalising on the increasing demand for sustainable battery mineral products,” he said.
Albemarle CEO Kent Masters said the MARBL restructure positioned the company strongly going forward.
“Our Australian lithium assets are core to Albemarle’s strategy to build a globally diversified portfolio of best-in-class assets and resources,” he said.
“Inherent to that strategy is managing our global portfolio to maximize growth optionality and maintain a leading position in a dynamic, growing market. Our restructured MARBL joint venture enables each partner to deliver long-term value to our customers.”
The effect of the Thursday announcement is that MinRes has more toys in the lithium sector but Albemarle has control and keeps its feet on the prized hydroxide processing assets in WA and China. Albermarle has kept MinRes out of any chance of gaining operating experience in operating the key part of the lithium process – the hydroxide refinery and preparing it to battery grade (as well as to lower industrial grade for more general use). MinRes has had a small but potentially important win – instead of, as the 2022 statement said, Albemarle being responsible for the marketing of chemicals from both joint ventures, MinRes will be responsible for selling its share from Kemerton (15%) and Wodgina (50%), which gives it a valuable foothold in the global lithium marketing business. Not covered by this new arrangement with Albemarle is MinRes’ 50% owned Mount Marion lithium mine in WA. The other 50% owner is China’s Jiangxi Ganfeng Lithium Co. MinRes is the operator.
Will MinRes’ next move be to spin off these lithium interests in the US, as it and its market mates have been suggesting now for six months? It’s no wonder its lithium interests helped the company to lift earnings to $390 million for the six months to December Revenue was up p 74% to $2.350 billion, Underlying earnings EBITDA was up 503% to $939 million, the net profit of $390 million was up a fantastical 1,890% and the interim dividends is 120 cents per share. There was no interim in 2022 and the previous payout was $1 per share in February, 2021. The company paid a final last year of $1.75 per share. Revenue and earnings jumped because of the surge in lithium prices with the conversion of spodumene from the Mt Marion and Wodgina spodumene mines in WA into lithium battery chemicals. Mineral Resources’ lithium revenue came in at $997.2 million, up from $143 million a year earlier. MinRes also reported modest increases in iron ore and mining services revenue.
Analyts though were forecasting the lithium EBITDA to be more than $1 billion, ($1.06 billion was the consensus) so that’s why MinRes shares eased on Friday. But the results do give a big hint as to why Ellison was prepared to revamp the JV with Albemarle – he has to stay in the game.
More detailMineral Resources has cuts ties with Albemarle on downstream lithium processing and has now set its sights on building its own lithium hydroxide plant.
These changes are a win-win for both parties, with MinRes and Albemarle remaining great joint venture partners in the world-class Wodgina lithium mine, while maximising flexibility to focus on the strengths of our businesses…
The companies expect the arrangements to be completed in the December quarter....For MinRes, we’ve unlocked value from our non-integrated Kemerton processing facility, which will provide flexibility to continue expanding our hard rock assets and developing our own integrated lithium conversion assets in Australia and abroad.
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