PEN - Peninsula Energy

barney · 16 June 2011

Country Lad said:
Simply my description of a share whose price has performed rather abysmally. In my mind anything that has fallen 57% and at a fairly rapid rate averaging 5% per week is a dog regardless of how some people may positively interpret the fundamentals. The market has given its verdict on the company and the fundamentals for the time being.

Cheers
Country Lad

Hi CL,

You make many sensible and valid points ..... however, just for balance ...... numbers and percentages are just that, and can be manipulated and twisted to seem whatever we want them to.

If I can give an alternative set of numbers to make my point ......

Example:-

I purchased 1000 BHP shares at the swing low on 26th February at $37 and sold them at yesterdays low of $42.72

Cost ... $37,000 ...... Sell $42,720 ....... Profit $5,720

I purchased $37,000 of PEN shares on the 26th february at the swing low of 0.037 .... and sold them at yesterdays low of 0.062 cents for $62,000 for a profit of $25,000

Your point that PEN has dropped 57% from its recent high is totally correct, and anyone who bought at 15 cents should have been well out long ago ...... but taking a snapshot of any stock can often give misleading results. In my example, PEN has actually outperformed much of the market in the chosen time frame, and that includes the 57% decimation after the tsunami .....

Cheers.

Boggo · 16 June 2011

barney said:
I purchased $37,000 of PEN shares on the 26th february at the swing low of 0.037 .... and sold them at yesterdays low of 0.062 cents for $62,000 for a profit of $25,000

Begs the obvious question, why didn't you sell at 12 to 12.5 when it was obvious that reality was about to kick in, you would have had double that profit

barney · 17 June 2011

Boggo said:
Begs the obvious question, why didn't you sell at 12 to 12.5 when it was obvious that reality was about to kick in, you would have had double that profit

Howdy Boggo,

Certainly not advocating holding onto losers: My point was purely a hypothetical to display the relative performance of the stock which is not as bad as some here are touting ......... The big guns of PDN and ERA have faired much worse.

To answer your above question in one word ..... TAX.
When holding a 350+% profit, I preferred to sit out a 20% retacement than give 50% to the TAX man .... Unfortunately, the tsunami flattened more than just Japan

PS Currently holding no PEN shares ...(They went with the big wave) Holding PENOC's only

Country Lad · 17 June 2011

barney said:
Your point that PEN has dropped 57% from its recent high is totally correct, and anyone who bought at 15 cents should have been well out long ago ...... .

barney, I fully agree with your calculations and that is the way that shares should be traded.

Unfortunately you are missing the point. The debate here has been one of a number of people holding the shares all the way down without a thought of selling them, and selling, as your quote above rightly points out, was the correct thing to do - but they didn't. My point is that making the profits out of trading as you describe should be the objective of the game, not holding on during a long downtrend stretching to 57% drop in value and then hoping they will go up again by about 130% to break even.

What you are saying reinforces my argument and is precisely what the example I gave below of my MSB trading does.

Cheers
Country Lad

skc · 17 June 2011

barney said:
Howdy Boggo,

Certainly not advocating holding onto losers: My point was purely a hypothetical to display the relative performance of the stock which is not as bad as some here are touting ......... The big guns of PDN and ERA have faired much worse.

To answer your above question in one word ..... TAX.
When holding a 350+% profit, I preferred to sit out a 20% retacement than give 50% to the TAX man .... Unfortunately, the tsunami flattened more than just Japan

PS Currently holding no PEN shares ...(They went with the big wave) Holding PENOC's only

Tax matters but not to such extent.

Say you bought $1 now $3.5 so 350% profit. At highest marginal tax rate of 47% you net profit after tax is ($3.5-$1)*(1-47%) = $1.325 per share.

Say the stock retraced 20% but you qualify for reduced CGT, your profit after tax is
($3.5*0.8-$1)*(1-47%/2) = $1.377 per share.

Do the same calculation for a 57% retracement and tell me you are better off...

Miner · 17 June 2011

I thought the PEN enthusiastics have read the press news regarding DFS time frame etc.

Good luck

Boggo · 17 June 2011

Miner said:
I thought the PEN enthusiastics have read the press news regarding DFS time frame etc.

Good luck

Just more of the same Miner, compare the price action over the same period.

Boggo · 17 June 2011

Ignoring all the reports that this mob regurgitates and all the endearing investment analysis posts, there could be a few bucks in this if/when it closes above 0.071.

Hit and run tactics could be fun and worth a few $$, don't stay long enough to become an investor though

(click to expand)

Miner · 17 June 2011

Hartley's Report published slightly later than DFS notiifcation by PEN themselves.

Good luck with some postive vibe returned on PEN in an other wise depressing market.
Let us keep fingers crossed that fundamental values will prevail over normal sentiment against uranium for all holders and business in general

tech/a · 17 June 2011

Double bottom
Where I'd be buying and where I'd have a stop.
Soaking up the Sun in Venice currently so will have to be a call for the record only.
Sporting a mediterrainian tan I might add----RED.

barney · 17 June 2011

skc said:
Tax matters but not to such extent.

Say you bought $1 now $3.5 so 350% profit. At highest marginal tax rate of 47% you net profit after tax is ($3.5-$1)*(1-47%) = $1.325 per share.

Say the stock retraced 20% but you qualify for reduced CGT, your profit after tax is
($3.5*0.8-$1)*(1-47%/2) = $1.377 per share.

Do the same calculation for a 57% retracement and tell me you are better off...

Thanks for your input SKC .... Always appreciated.

Basic mathematics I was quite good at, but some of this relative calculation stuff I struggle with. I trade purely discretionary and my mathematics is only ballpark at best. Perhaps the PEN thread may not be the ideal place, but considering my personal "numbers" are PEN related, perhaps it may be appropriate ....

Lets say I had $20,000 invested in PEN at an average of 4 cents/share

If I were to sell the shares in the current financal year, my tax rate is 40% (don't qualify for any GCT rebate)

If I were to sell the shares in the next financial year my tax rate will only be 20%

Assuming the shares have currently increased to a 350% paper profit, how far do the shares have to drop from the high point to indicate that selling in the current financial year (40% tax) will be at least similar to holding and selling in the next financial year (20% tax)

Hope that makes sense

Cheers

skc · 17 June 2011

barney said:
Thanks for your input SKC .... Always appreciated.

Basic mathematics I was quite good at, but some of this relative calculation stuff I struggle with. I trade purely discretionary and my mathematics is only ballpark at best. Perhaps the PEN thread may not be the ideal place, but considering my personal "numbers" are PEN related, perhaps it may be appropriate ....

Lets say I had $20,000 invested in PEN at an average of 4 cents/share

If I were to sell the shares in the current financal year, my tax rate is 40% (don't qualify for any GCT rebate)

If I were to sell the shares in the next financial year my tax rate will only be 20%

Assuming the shares have currently increased to a 350% paper profit, how far do the shares have to drop from the high point to indicate that selling in the current financial year (40% tax) will be at least similar to holding and selling in the next financial year (20% tax)

Hope that makes sense

Cheers

Your NPAT = No. of shares x (sell price - buy price) * (1- tax rate).

With your figures that's $30K @ 40% tax rate.

Now rearrange the equation to solve for "sell price".

Sell price = (NPAT/(1-tax rate))/(No. of shares) + buy price

Plug in your target NPAT ($30K) and the reduced tax rate (20%), you get sell price = 11.5c.

So if you hold more than 1 year and sell at 11.5c you would have the same profit after tax as if you sold at 14c. Check the answer with the original equation and you get $30K profit as before.

The practical application of this is very tricky however. Share price is 14c but you have 2 months to wait for the tax to be halved... what do you do? There's probably some smart option-style calculations that can be done to see whether it's worth waiting 2 months. And if there wasn't the Japan earthquake you most likely would have made the right decision to hold.

barney · 17 June 2011

skc said:
Your NPAT = No. of shares x (sell price - buy price) * (1- tax rate).

With your figures that's $30K @ 40% tax rate.

Now rearrange the equation to solve for "sell price".

Sell price = (NPAT/(1-tax rate))/(No. of shares) + buy price

Plug in your target NPAT ($30K) and the reduced tax rate (20%), you get sell price = 11.5c.

So if you hold more than 1 year and sell at 11.5c you would have the same profit after tax as if you sold at 14c. Check the answer with the original equation and you get $30K profit as before.

The practical application of this is very tricky however. Share price is 14c but you have 2 months to wait for the tax to be halved... what do you do? There's probably some smart option-style calculations that can be done to see whether it's worth waiting 2 months. And if there wasn't the Japan earthquake you most likely would have made the right decision to hold.

Cheers for that ....... I can't believe you can come up with this stuff at the drop of a hat

The tsunami was certainly a black swan which many including myself had not calculated for. In hindsight ..... and I think hindsight is generally wasted analysis ..... if I had the trade over again, I would take a bit more profit off the table on the way up ....

Fear and Greed ..... Both of the "brothers" cost us money at some point!! ..... but it keeps life interesting

Thanks again ... your maths is very much repected

barney · 18 June 2011

Country Lad said:
barney, I fully agree with your calculations and that is the way that shares should be traded.

Unfortunately you are missing the point.

Totally understand and appreciate your recent comments CL.

My previous posts were simply to defend the "dog status" attributed to PEN, when in fact it has actually out preformed many "higher quality" stocks if we consider the 400% rise prior to the 57% fall of late ..........

Cheers.

skc said:
The practical application of this is very tricky however. Share price is 14c but you have 2 months to wait for the tax to be halved... what do you do? There's probably some smart option-style calculations that can be done to see whether it's worth waiting 2 months. And if there wasn't the Japan earthquake you most likely would have made the right decision to hold.

SKC, I have done a mechanical calculation (can't get my brain around the actual maths equations

In the example I gave, I estimate ............ A share could drop 25% of its increased profit and return the same NPAT if the tax rate halved from 40% to 20%

ie Just an example .......

100,000 shares purchased at 4 cents ($4000)

Share price reaches 12 cents (value= $12,000)

Tax on profit if sold at 12 cents @ 40% tax is $8,000 X 40% = $3,200 = $4,800 NPAT

Assume 25% drop in the profit aspect of the share value (8 cents - 25%= 6 cents)

Value of shares (4 cents/original cost + 6 cents/profit)= 10 cents = $10,000

Tax on profit if sold at 10 cents @ 20% tax is $6,000 X 20%= $1200 = $4,800 NPAT

I assume this should marry up with the "real" mathematical functions you mentioned .... would you mind double checking me?

Cheers.

skc · 18 June 2011

barney said:
SKC, I have done a mechanical calculation (can't get my brain around the actual maths equations

In the example I gave, I estimate ............ A share could drop 25% of its increased profit and return the same NPAT if the tax rate halved from 40% to 20%

ie Just an example .......

100,000 shares purchased at 4 cents ($4000)

Share price reaches 12 cents (value= $12,000)

Tax on profit if sold at 12 cents @ 40% tax is $8,000 X 40% = $3,200 = $4,800 NPAT

Assume 25% drop in the profit aspect of the share value (8 cents - 25%= 6 cents)

Value of shares (4 cents/original cost + 6 cents/profit)= 10 cents = $10,000

Tax on profit if sold at 10 cents @ 20% tax is $6,000 X 20%= $1200 = $4,800 NPAT

I assume this should marry up with the "real" mathematical functions you mentioned .... would you mind double checking me?

Cheers.

That's right. But there is an even simpler way of looking at it.

At the higher tax you pocket 60% of the profits. At the lower tax rate you pocket 80%. So the ratio is 60%/80% or 0.75. So it basically means that your profit can shrink by the same factor and your NPAT will be the same.

In the example above your starting profit was 8c. So it can fall to 0.75x8c = 6c for you to get the same NPAT at the lower tax rate. A 6c profit = 10c share price, as per your calculation.

BTW my charge out fee is $260 per hour + GST, with minimum charge in 8 hr blocks. Invoice is on the way.

tothemax6 · 18 June 2011

skc said:
What I don't understand is, if one is bullish uranium (which may not be correct but certainly valid), why wouldn't you just buy something like PDN that has fallen just as much but is actually producing...

Hah, so it has. I hadn't seen PDNs chart recently. Maybe there will be value in PDN too. I'm not bullish uranium, or anything else for that matter. There are a few more issues that have yet to resolve that have influence on nuclear fuel demand (waiting for China blowoff for one). But soon, soon. Coal may be cheap, but the energy density is in uranium.

Garpal Gumnut · 18 June 2011

barney said:
Totally understand and appreciate your recent comments CL.

My previous posts were simply to defend the "dog status" attributed to PEN, when in fact it has actually out preformed many "higher quality" stocks if we consider the 400% rise prior to the 57% fall of late ..........

Cheers.

SKC, I have done a mechanical calculation (can't get my brain around the actual maths equations

In the example I gave, I estimate ............ A share could drop 25% of its increased profit and return the same NPAT if the tax rate halved from 40% to 20%

ie Just an example .......

100,000 shares purchased at 4 cents ($4000)

Share price reaches 12 cents (value= $12,000)

Tax on profit if sold at 12 cents @ 40% tax is $8,000 X 40% = $3,200 = $4,800 NPAT

Assume 25% drop in the profit aspect of the share value (8 cents - 25%= 6 cents)

Value of shares (4 cents/original cost + 6 cents/profit)= 10 cents = $10,000

Tax on profit if sold at 10 cents @ 20% tax is $6,000 X 20%= $1200 = $4,800 NPAT

I assume this should marry up with the "real" mathematical functions you mentioned .... would you mind double checking me?

Cheers.

barney mate,

All your calculations take naught away from the fact that PEN is a dog of a stock.

It is followed by those who would have no problems in getting roles in "The Life of Brian, The Sequel"

It has tenements, and it has directors who are not newts or pisspots, and that is all it has, apart from the cast of "Brian".

It is a reasonable stock in the wrong decade.

It is A Dead Parrot.

gg

Garpal Gumnut · 19 June 2011

It is interesting that ASF is the only forum to cast PEN as a dog, and it's adherents mullahs at a christening.

Let us see the open tomorrow.

gg

barney · 19 June 2011

skc said:
BTW my charge out fee is $260 per hour + GST, with minimum charge in 8 hr blocks. Invoice is on the way.

....... I'll take 2X 8 hour blocks .... and give yourself a 20% bonus from me.

ps The Invoice address I gave you was bogus!:

Garpal Gumnut said:
barney mate,

All your calculations take naught away from the fact that PEN is a dog of a stock.

It is followed by those who would have no problems in getting roles in "The Life of Brian, The Sequel"

It has tenements, and it has directors who are not newts or pisspots, and that is all it has, apart from the cast of "Brian".

It is a reasonable stock in the wrong decade.

It is A Dead Parrot.

gg

No worries GG ..... It does look currently pressured I agree, although personally this puppy treated me just fine

ps Also a M P fan

hangseng · 20 June 2011

Garpal Gumnut said:
barney mate,

All your calculations take naught away from the fact that PEN is a dog of a stock.

It is followed by those who would have no problems in getting roles in "The Life of Brian, The Sequel"

It has tenements, and it has directors who are not newts or pisspots, and that is all it has, apart from the cast of "Brian".

It is a reasonable stock in the wrong decade.

It is A Dead Parrot.

gg

Long time since I saw a post like that. The last time was on EXT post consolidation. Same term used as well "dog of a stock". Also was termed a "dog with fleas" etc etc etc, along with bagging the directors and stating everthing from country risk to why would you buy EXT when you can buy a "quality stock" like BMN, some even saying buy BLR and PNN instead of PEN. The latter 3 would have been a great move...NOT! All true dogs that have been flogged by the market far more than PEN.

So we forget, they have no debt and over $30m cash in the bank, are a near producer of U ahead of all peers, and have only touched on 10% of the resource area to date?

If that is the "L'o'B" then happy to be a part of it. I didn't take any offence to your baseless offensive post as it is so out there as to be ridiculous.

Why oh why you picked PEN in the comp if PEN is such a dog?

Heard it all before, same old same old. If the stock doesn't move massive amounts in a short time frame, or a short term traders intended timeframe then it's a dog. Easy remedy, don't buy into PEN.

I bought another 1.5m at 6.1 last week at the expense of some so called great stocks and it has proved to be a great move. I get the tax credits on the "great" stocks and already in the money on PEN as expected. Not the first time I have done this either, both times PEN winning out.

More like a major show winning pedigree "dog" according to my portfolio. At this rate by the time PEN hits production I should have a very tidy sum put away.

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