NCM - Newcrest Mining

[RottenValue]

At the risk of being pedantic, it would be more correct to say it would have lost 50% of its price rather than value.

This stock has low ROE, low EPS growth and therefore little reason to justify even its current PE of 17 - a value of $12 would be more appropriate. The price fall over the past 5 years reflects PE contraction as the EPS has stagnated.

I would back the shorters on this one!

 

[RandR]

It's finding some support at about $22.90 at 1pm today Sydney time, but it will be interesting to see if it holds. If not, it's going down.

I'd guess it's being shorted.

gg

The balance sheet for NCM in the lastest annual report is sick barf barf barf. Current liabilities were more then twice current assets ... ncm has next to no cash in the bank (in terms of the size of the company). Despite having record 'operating cashflow' they spent a billion dollars more then they earnt in the financial year of 2012 on construction development and drilling. They financed the dividend payments to shareholders by debt...

I dont understand why people purchase a business to gain exposure to a commodity .. the reality is NCM is in the cash business, the business of producing $$$$ something its not doing quite well or producing alot of at the moment. NCM is a perfect example of why extreme caution should be had around any commodity business.

 

[willstor]

Could be an interesting ride this one...Agree that price would have been a better choice of words than value too!
Hasn't been riding the wave upwards with the ASX which could potentially mean if there is a downturn my 19.50 entry will be triggered.

 

[Garpal Gumnut]

If it gets to 16.30 I'll make that tranche 3, however are we talking within 3 months? That would have seen it lose nearly 50% of its value!

At the risk of being pedantic, it would be more correct to say it would have lost 50% of its price rather than value.

This stock has low ROE, low EPS growth and therefore little reason to justify even its current PE of 17 - a value of $12 would be more appropriate. The price fall over the past 5 years reflects PE contraction as the EPS has stagnated.

I would back the shorters on this one!

The balance sheet for NCM in the lastest annual report is sick barf barf barf. Current liabilities were more then twice current assets ... ncm has next to no cash in the bank (in terms of the size of the company). Despite having record 'operating cashflow' they spent a billion dollars more then they earnt in the financial year of 2012 on construction development and drilling. They financed the dividend payments to shareholders by debt...

I dont understand why people purchase a business to gain exposure to a commodity .. the reality is NCM is in the cash business, the business of producing $$$$ something its not doing quite well or producing alot of at the moment. NCM is a perfect example of why extreme caution should be had around any commodity business.

Could be an interesting ride this one...Agree that price would have been a better choice of words than value too!
Hasn't been riding the wave upwards with the ASX which could potentially mean if there is a downturn my 19.50 entry will be triggered.

willstor, unless you have some connections to Hogwarts evening classes on the future, I fail to see how $19.50 can be an entry point at this stage.

What happens if you buy at $19.50 and it then continues to drop.

I'd wait for signs of a recovery before buying... $26.50 would make more sense as an entry point than $19.50

gg

 

[willstor]

willstor, unless you have some connections to Hogwarts evening classes on the future, I fail to see how $19.50 can be an entry point at this stage.

What happens if you buy at $19.50 and it then continues to drop.

I'd wait for signs of a recovery before buying... $26.50 would make more sense as an entry point than $19.50

gg

I hear what you are saying but I have found it an effective strategy so far with equity trading. For example I bought FXJ at .45 then .38 then got out with a divident at .51 with a profit and dividend (from tranche 1), ILU at 905, then 805 then out at 980 with dividend and TSE at 1.85, 1.73 and 1.53 closing out at 1.88 RMS at .45 and .39 out at .47. I find it easier to buy companies I see as 'undervalued' and then sell when the value 'catches up'. I was hoping Santos would get a battering too but it's done OK of late so I didn't pull the trigger on that one.

Ideally I look for:
1. Making a profit (ok FXJ not quite fitting that one but they clearly have valuable assets now being stripped out hence the catching up in the sp)
2. Being sold off and touching lows for certain periods.
3. A stock that pays a half decent dividend which in turn can assist with reinvestment when one of the dogs in the portfolio starts barking!

So in this case I think the market has it wrong at 22 bucks (it might have it right long term, 2 years from now this thread may show NCM at 11 bucks) and with gold getting cheaper but failing so far to capitulate, will experience a sufficient rebound to bring a profit and get me out. I'm insane aren't I?!

 

[notting]

Given it's performance over the medium term, it's showing uncharacteristic strength off it's recent lows in stark contrast to most other Goldies.
Nibbling on it, whilst being mindful that it reports on Friday(I think) and has a history of dissapointing! However the last two reports were positive having already taken on the bad stuff prior IMO.

 

[willstor]

Results today...

 

[willstor]

Even by their standards those results are awful...going to drag the whole ASX down today!

 

[skc]

Even by their standards those results are awful...going to drag the whole ASX down today!

The result while well down on last year was pretty close to expectation, and DPS of 12c is a slight beat.

Yes it's bad and a tiny profit for a bloated share price and $17B company.. but not sure it will be down too much today.

 

[Garpal Gumnut]

Even by their standards those results are awful...going to drag the whole ASX down today!

The only thing to their credit is that the information didn't get used before the asx announcement.

No obvious inside selling.

Where will it end up today?

gg

 

[willstor]

Rightly or wrongly I'm out at 24.13. How those results caused a 3.3% jump I don't know.

 

[Garpal Gumnut]

Rightly or wrongly I'm out at 24.13. How those results caused a 3.3% jump I don't know.

The answer is in the chart, as I said above.

gg

 

[willstor]

The answer is in the chart, as I said above.

gg

Fair enough
Where do you see it headed from here?

 

[Garpal Gumnut]

Fair enough
Where do you see it headed from here?

Who knows.

If it stays above $24 today it will find some support there from previous price action.

Usually if a stock is going to fall on a bad announcement someone's Granny or Irish relations finds out a week or two before and starts leaking large volumes on the sell side.

It could still crash down if an insto is buying up to sell in to buyers enticed in by the rise.

There may be other news we are not privy to.

gg

 

[notting]

Yeah chart looks good.
Dissapointing results but wait the future looks geat!!
Have we heard that before?

 

[Boggo]

Even by their standards those results are awful...going to drag the whole ASX down today!

Rightly or wrongly I'm out at 24.13. How those results caused a 3.3% jump I don't know.

The answer is in the chart, as I said above.

gg

When the news is released to the unwashed masses it is old news, today's 'old' news is already factored into the charts long before those with the news dependency get their fix.

Garpal's Irish rellies were all over this ages ago

(click to expand)

 

[willstor]

Fair enough. I'm happy to be out with some profit. The sell down from 27 to 22 was obviously down to what was coming today.

 

[Garpal Gumnut]

When the news is released to the unwashed masses it is old news, today's 'old' news is already factored into the charts long before those with the news dependency get their fix.

Garpal's Irish rellies were all over this ages ago

(click to expand)

They are actually Sydney based.

The Eddie O'B's.

It all makes sense now.

gg

 

[Sean K]

When the news is released to the unwashed masses it is old news, today's 'old' news is already factored into the charts long before those with the news dependency get their fix.

Garpal's Irish rellies were all over this ages ago

(click to expand)

Some nice retrospective calls in there Boggo. Love your work.

 

[chops_a_must]

This has been my worst buy.

Next rally and I'm out.