ZFX - Zinifex Limited

[rederob]

and current dividends about 10%+ franked!

MS
I hope you meant 100%
This is from Greig Gailey's media release:

Consistent with Zinifex’s stated commitment to return surplus cash to
shareholders, a final fully franked dividend of 70 cents per share is
announced bringing the total dividend payment for the full year to 80 cents.
“This gives Zinifex one of the highest fully franked yields of the year and
represents a great result for our shareholders,” he said.

 

[scsl]

MS, I'm curious to know if you have any price targets on ZFX. I remember you posting a very useful chunk of analyst info in the RIN thread...

cheers,
scsl

 

[rederob]

MS, I'm curious to know if you have any price targets on ZFX. I remember you posting a very useful chunk of analyst info in the RIN thread...

cheers,
scsl

Not meaning to steal the thunder from MS, but my price target is $15 by end year.
I anticipate a strong rise in zinc prices and would think by mid 2007 ZFX will trade near $20.
As a close watcher of metals, zinc is a few weeks from going from contango into backwardation.
When this occurs there will be a massive and fundamental shift in zinc's price - north.
In a few weeks time northern hemisphere production facilities resume at full tilt after summer holidays, maintenance etc.. In the interim we have had a continuing decline of LME zinc inventories. So when things crank up, it seems reasonably obvious that the rate of drawdown will gather speed.
Zinc really is the metal to be on NOW.

 

[dubiousinfo]

ZFX ZINIFEX LIMITED Overnight Price: $9.91


Merrill Lynch rates the stock as Sell, High Risk - The broker, a prominent ZFX-basher, notes quarterly sales were particularly good and it has lifted NPV from $7.65 to $8.15. However, the analysts continue to maintain these zinc prices won''t last more than a year, and that ZFX is a sell down to $6.00.

Current Price is $9.91. Target price not assessed.

This is from just last month.
And Merrill's wonder why we left them last year.

 

[juddy]

In yesterday's West Australian Bell Potter chose AFX as their BUY recommendation citing, "with the zinc price tipped to increase by 114% during 2006-2007 before retreating in 07-08". " Our positive outlook is based on extremely low stocks, continued strong demand, low rates of substitution and restricted production growth, which continues to be limited by a tight concentrate market".


cheers

 

[michael_selway]

This is from just last month.
And Merrill's wonder why we left them last year.

Thing is Merril bought alot of ZFX and still owns alot!

ZFX ZINIFEX LIMITED Overnight Price: $10.99

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ABN Amro rates the stock as Downgrade to Hold from Buy - Target $11.86 (was $11.42). Strong zinc prices were behind the company''s profit, the broker noting it was above consensus estimates.
The broker suggests the company has now entered the next phase, which is growing its reserves, but it suggests an acquisition would be quicker than building solely through exploration success.

The broker sees the stock as fairly vaued at current levels.


Target price is $11.86 Current Price is $10.99 Difference:$0.87 - (brackets indicate current price is over target). If ZFX meets the ABN Amro target it will return approximately 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).


--------------------------------------------------------------------------------

Credit Suisse rates the stock as Outperform - Result 14% up on consensus and the outlook for zinc is seen as positive for FY07 and FY08.

Target price is $15.08 Current Price is $10.99 Difference:$4.09 - (brackets indicate current price is over target). If ZFX meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).


--------------------------------------------------------------------------------

Deutsche Bank rates the stock as Buy - The result was in line but the dividend was a bit of a shock at 70c vs the broker''s 40c forecast. It''s all good news as the broker believes that under current commodity price and exchange rate forecasts ZFX will still have enough cash to develop its projects.
Target rises from $13.74 to $14.38.


Target price is $14.38 Current Price is $10.99 Difference:$3.39 - (brackets indicate current price is over target). If ZFX meets the Deutsche Bank target it will return approximately 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).


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Merrill Lynch rates the stock as Sell, High Risk - It''s really rather pointless updating Merrill Lynch''s view, result or no result. It remains the same - the market is valuing in high zinc prices forever, and that can''t happen.
The broker does admit that zinc will probably be rather tight for the next 6-12 months, however.


Current Price is $10.99. Target price not assessed.


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SB Citigroup rates the stock as Buy, High Risk - Target $13.00 (was $12.00). Profit was higher than the broker had expected, though a reduction in the tax benefit going forward has seen a cut to its FY07 forecast by about 4%.
Despite this the broker sees potential upside from ongoing high zinc prices and exploration success.


Target price is $13.00 Current Price is $10.99 Difference:$2.01 - (brackets indicate current price is over target). If ZFX meets the SB Citigroup target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).


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UBS rates the stock as Buy 2 - The result was up on the broker’s estimate and the broker sees the outlook as positive and continues to like to he company’s exposure to zinc.

Target price is $13.50 Current Price is $10.99 Difference:$2.51 - (brackets indicate current price is over target). If ZFX meets the UBS target it will return approximately 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

--------------------------------------------------------------------------------

ZFX - ZINIFEX FPO Downgrade to Hold from Buy - ABN Amro Overnight Price $10.99
Outperform - Credit Suisse Overnight Price $10.99
Buy - Deutsche Bank Overnight Price $10.99
Sell, High Risk - Merrill Lynch Overnight Price $10.99
Buy, High Risk - SB Citigroup Overnight Price $10.99
Buy 2 - UBS Overnight Price $10.99

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http://www.fnarena.com/index4.cfm?type=dsp_newsitem&n=4373134F-17A4-1130-F526AED761E1BF29

The Enigma That Is Zinifex
FN Arena News - August 25 2006

By Greg Peel

Zinifex is essentially all about zinc, and at the moment it's pretty valuable to be of the world's leading zinc producers. Valuing Zinifex is extremely dependent on what one's assumptions are about the long term zinc price. A slight adjustment in the distance equates to wild swings in today's discounted value.

Hence it's no surprise that Zinifex boasts one of the widest range of target prices of any stock in the FN Arena database. After posting a profit of over $1 billion, brokers had another go at bumping up targets. Consensus was only around the $900 million profit mark.

Zinifex closed yesterday at $10.99, but targets range from $9.00 (JP Morgan) to $15.08 (Credit Suisse). That's a massive 55% swing around yesterday's close. But wait, we forgot about Merrill Lynch.

The broken record award for 2006 must go to Merrill Lynch's resources analysts. The 52-week range on the Zinifex stock price is $2.87 to $13.45. That's a 368% increase. But on the way up, Merrills started despairing.

"Are you all mad?", Merrills analysts as good as said. "You are assuming these levels of zinc price are going to be sustained for two to three years. Haven't you ever heard of cycles?"

To be fair to Merrills, in the same 52 week period the zinc price has rallied from around US$0.60/lb to peak at around US$1.75/lb. The usual, albeit delayed, response from the world following such a rally is to madly start ramping up production and looking for more deposits. In theory, the supply will begin to catch up to demand, and the zinc price will fall. That Merrills believes the market is pricing in such high levels for a whole 2-3 years ignores the fact that supply should have started catching up by then.

The problem is, there are few signs yet of this occurring. Demand has not abated at higher prices, and not only is supply struggling to catch up, it is beset with delays, strikes and shutdowns. Despite the May correction, zinc is still trading around US$1.50/lb. Most of the resource analysts around town simply see zinc prices staying this way for a while yet.

Merrills has a Sell on Zinifex (and has had for some time). The analysts don't set a target on a Sell, but are on record as advising clients to sell down to $8.00, and not to buy before $6.00. This makes our target range even wider - $8.00 to $15.08, or 64% around yesterday's close.

In concert with the differing target prices, are the spread of analyst ratings. Zinifex rates 4/3/2 on FN Arena's Buy/Hold/Sell ratio.

So armed with such disagreement, what is a poor investor to do? Buckle up, is probably the best advice. If your're in Zinifex, you're having the ride of your life.

But this story doesn't end at targets and ratings. There has been speculation all year as to just what dividend the company might pay out. This is very important, not just because part of the value of any stock is its yield, but because in the case of runaway Zinifex, the dividend represents a quantum of the zinc rally an investor can actually crystallise. Even if the zinc price suddenly collapsed, the dividend, based on an exceptional year of high zinc prices, is in the bag.

Analysts were in about as much agreement on the dividend as they were on the price. Lo and behold, the average dividend expectation was $0.70, and that's exactly what Zinifex paid. The only problem is, the range of prior estimates was all the way from $0.30 to $1.10.

$0.70 represents a payout ratio of 81% and a healthy yield of, well, who knows? You could say around 7%, which is pretty good for a speculative stock, but the stock price is a moving target. Analyst estimates for next year's yield are equally as wild.

Despite differing views, brokers are in agreement that ongoing value in Zinifex lies in its exploration program. If the company can produce more zinc, and prices stay up here, the company will make even more substantial profits.

If the company finds more zinc, and prices collapse, well at least it will have more zinc to sell at lower prices.

If the company, or anyone else, finds an awful lot of zinc, then this will only help the price to collapse.

When will the world's appetite for zinc begin to plateau? When will supply finally catch up? Those are the questions required to be answered before deciding to invest in Zinifex. And no one can much agree on any answer.

thx

MS

 

[scsl]

Thx for all the information guys! It's much appreciated.

With the zinc market the way it is, I think that Zinifex will be one of the best performing stocks in the ASX 200 for the next year or so. Now all we have to do is wait for the zinc price to head north again!

 

[michael_selway]

Thx for all the information guys! It's much appreciated.

With the zinc market the way it is, I think that Zinifex will be one of the best performing stocks in the ASX 200 for the next year or so. Now all we have to do is wait for the zinc price to head north again!

Hope so, hope that it will do what Nickel is doing now, but genuienely!

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008 2008
EPS 35.9 219.9 291.7 232.4 232.4
DPS 4.0 80.0 117.5 92.9 92.9

Red i meant 10% yield, + 100% franking

thx

MS

 

[michael_selway]

Hope so, hope that it will do what Nickel is doing now, but genuienely!

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008 2008
EPS 35.9 219.9 291.7 232.4 232.4
DPS 4.0 80.0 117.5 92.9 92.9

Red i meant 10% yield, + 100% franking

thx

MS

They updated 2009 EPS Forecast

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 291.7 232.4 119.5
DPS 80.0 130.0 92.9 60.0

Forward Terminal PE of 10 is about $12

However how high can zinc prices go and be sustained, is the real question

thx

MS

 

[Kipp]

Funny for all the upbeat ramping that the ASF is now dishing out on ZFX than none of you picked it for the stock tipping comp...
The happy days look like they've started again... one thing that no-one has mntion is Lead Prices- possibly because they only account for a tiny fraction of ZFX profits- but they're looking pretty healthy too

 

[clowboy]

Kipp,

I'm sure most ppl will agree with me when I say that I consider the market cap of ZFx to great for the stock comp.

The winner usually racks up a 100%+ gain and I can't really remember it ever being below 50%.

As much as I would like it to happen I can't see ZFX going up 50-100+% in the space of a month and if it does im sure something with a market cap of 10-100mill will go up by 200+%.

That's why I never tip it, but you can be assured I hold it in the ASX game (as well as in life)

Cheers

 

[michael_selway]

They updated 2009 EPS Forecast

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 291.7 232.4 119.5
DPS 80.0 130.0 92.9 60.0

Forward Terminal PE of 10 is about $12

However how high can zinc prices go and be sustained, is the real question

thx

MS

Updated again esp 2009

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 300.8 228.6 143.0
DPS 80.0 140.0 89.5 60.0

thx

MS

 

[StockyBailx]

Thats all fair enough, but I seem to view that 70% of ZFX's success is also due a well astablished corperate managment?

 

[rederob]

Updated again esp 2009

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 219.9 300.8 228.6 143.0
DPS 80.0 140.0 89.5 60.0

thx

MS

MS
You should have looked at the forecasts for ZFX from last year, that related to 2007.
You would find that most were about 100% wrong at best: The bad forecasts were not within cooee.
The problem with their 2009 forecast is that it assumes either oversupply or global meltdown.
The chance of the former is negligible assuming global economies runn pretty much as they are.
The chance of the latter is stronger, but it could occur next year or in 2008 - so a roll of the dice is just as worthwhile.

 

[Kipp]

Kipp,

I'm sure most ppl will agree with me when I say that I consider the market cap of ZFx to great for the stock comp.

The winner usually racks up a 100%+ gain and I can't really remember it ever being below 50%.

As much as I would like it to happen I can't see ZFX going up 50-100+% in the space of a month and if it does im sure something with a market cap of 10-100mill will go up by 200+%.

That's why I never tip it, but you can be assured I hold it in the ASX game (as well as in life)

Cheers

Yah- fair enough. Prob also why banks and most industrials never get a look ni- but I think the stock comp shouldn't just about finishing first- continually finishing top 10 would bear more credence to me...

 

[Fab]

Would anybody be able to recommend a warrant / option or other leverage product that would allow me to invest on ZFX prior to the ex dividend date (16/10) and still benefit of the dividend payment ??

Cheers

 

[dubiousinfo]

Would anybody be able to recommend a warrant / option or other leverage product that would allow me to invest on ZFX prior to the ex dividend date (16/10) and still benefit of the dividend payment ??

Cheers

If you go to the ASX site you can look up all the warrants for ZFX.
To get the dividend you generally want the Investment Warrants.
The type of warrant is indicated by the 4th letter of the code. The letter to indicate investment warrants is an "I"
For example the Warrant - ZFXIZ1 - is an investment warrant that expires on 24 Jan 2007 with an exercise price of $7.00.
Note the I in the 4th letter ZFX I Z1

However you should ensure you fully read the Product Disclosure Statement (PDS) &/or speak to the issuer, prior to investing to ensure you get the entitlement.

Hope this helps

 

[Fab]

Thanks for that information dubiousinfo ,

Do you happen to know about investment or installment warrant as I have never invested in them but I like the idea.

Cheers

 

[dubiousinfo]

Thanks for that information dubiousinfo ,

Do you happen to know about investment or installment warrant as I have never invested in them but I like the idea.

Cheers

The ASX site has plenty of good information on the basics of warrants. Do some reading over there.

Also do a seach of ASF, there has been some discussion on them before.

When you have some specific questions, I suggest you start a new thread and post what it is you want to know. There are a few people here with good knowledge on the subject.

 

[Fab]

Ok I will create a new Installment warrant thread.

Thanks again