ZFX - Zinifex Limited

[Sean K]

I tell you what, if it gets to 13.50, I'm going to want to be the first in there. Bargain.

I hope it doesn't get down to these levels for holders who bought at the top, but there does seem to be a bit of downward momentum atm. LME Zn just continues to fall so it's gotta turn at some time.

 

[rederob]

I hope it doesn't get down to these levels for holders who bought at the top, but there does seem to be a bit of downward momentum atm. LME Zn just continues to fall so it's gotta turn at some time.

Kennas
I will be buying under $13.50 and also looking across to see what KZL is up to at the same point.
When ZFX peaked mid May the zinc price was about $1.50/lb, yet today it's 30% higher at almost $2.00/lb. The linear extrapolation today places ZFX at around $18 on that basis, so we are into some serious value when buying at present prices, let alone under $14.

 

[Sean K]

Kennas
I will be buying under $13.50 and also looking across to see what KZL is up to at the same point.
When ZFX peaked mid May the zinc price was about $1.50/lb, yet today it's 30% higher at almost $2.00/lb. The linear extrapolation today places ZFX at around $18 on that basis, so we are into some serious value when buying at present prices, let alone under $14.

Yeah, I'm with you. This is the blow off we had to have though. Zn and U3O8 just ran too hard in Sep/Oct. Unsustainable. There's a likelihood of an overcorrection too, as always, so an opportunity will present itself.

 

[Nick Radge]

Another average volume, wide ranging day with low close. Still no buyers showing their hand. No demand, no going higher.

 

[chops_a_must]

Kennas
I will be buying under $13.50 and also looking across to see what KZL is up to at the same point.
When ZFX peaked mid May the zinc price was about $1.50/lb, yet today it's 30% higher at almost $2.00/lb. The linear extrapolation today places ZFX at around $18 on that basis, so we are into some serious value when buying at present prices, let alone under $14.

I wouldn't worry even if I had bought up the top. It will get there again, as soon as people realise they can't find any zinc. I'd be looking for it to get close to $20 in the new year. And especially if they are looking at acquiring new assets and diversifying...

 

[Kipp]

kipp who values on historical p/es?????

Well- tell me what ZFX has made for the Jul-Nov period then? Oh wait that's right, most accounts aren't released on a monthly basis! Fine you can estimate based on Zinc/Lead Prices, but till End jan you don't really know what their earnings is...

 

[nizar]

Well- tell me what ZFX has made for the Jul-Nov period then? Oh wait that's right, most accounts aren't released on a monthly basis! Fine you can estimate based on Zinc/Lead Prices, but till End jan you don't really know what their earnings is...

To clear this issue up:
We are now in FY2007. So we look at earnings estimates for FY2007.
EPS is 295.4cps
Therefore PE is 5.0 (on todays close 14.73)

 

[Fab]

Looks to me that they are already very cheap. Not sure why their share price is going down except if some profit taking is happening in the short term.

 

[nizar]

Looks to me that they are already very cheap. Not sure why their share price is going down except if some profit taking is happening in the short term.

Well the fact is ZFX has always traded at 4-8times earnings.
Compare ZFX to its historical PE, not to other companies. Its unknown at this stage whether the market will ever pay 10x earnings for this company. I suspect it will get a re-rating once (not IF) exploration around century mine is a success as they are spending big money in this endeavour.

 

[Fab]

oops it did it again. Down strongly today. When will it stop ??

 

[nizar]

oops it did it again. Down strongly today. When will it stop ??

Nobody knows. Just prepare yourself and ANTICIPATE.
Have a PLAN. If it keeps going down, what do you do? If it rebounds what do you do?
Think about it.

 

[Fab]

what's your plan Nizar ?
Mine is stay put and pray

 

[Sean K]

Mine is stay put and pray

I must add this to my list of tactics when dealing with the stock market. Solid.
Good luck Fab! LOL.

 

[Fab]

Going up at the moment maybe we have found a bottom. At least it is moving the same way as the market at the moment

 

[Fab]

Going up at the moment maybe we have found a bottom. At least it is moving the same way as the market at the moment

 

[Fab]

That can not be bad for ZFX:

Zinifex's 2007 Profit May Beat Last Year's Record on Prices

By Chia-Peck Wong and Josie Ling

Nov. 17 (Bloomberg) -- Zinifex Ltd., the world's second- largest zinc producer, expects profit this financial year to surpass last year's record because of higher metal prices.

Net income in the year ending June 2007 will beat last year's A$1.1 billion ($843 million), Chief Executive Greig Gailey said in an interview today. He didn't give an estimate.

Prices of zinc, used to make rust-resistant galvanized steel, have more than doubled in the past year, reaching a record closing price of $4,515 a ton on Nov. 9 because of demand from China. The metal may surpass $5,000 a ton by year end, Macquarie Bank Ltd. said.

``If zinc prices remain where they are today, and we've got another six months of trading ahead of us, we would expect to easily beat that in the current fiscal year,'' Gailey said today in an interview. ``Fundamentals look exceptionally good.''

Zinifex is among mining companies posting record profits following a rally in metals prices. Net income may rise 34 percent to $1.47 billion in the year ending June 2007, according to the median estimate of 13 analysts surveyed by Thomson Financial. Vedanta Resources Plc., India's largest copper and zinc producer, said yesterday first-half net income quadrupled.

Prices of industrial metals have soared in the past three years partly as China's booming economy stokes demand for the raw materials needed for factories, cars and appliances. Nickel has more than doubled and copper has risen 51 percent this year. China's economy expanded 10.4 percent in the third quarter.

Stockpiles Dwindle

Zinc inventory tracked by the London Metal Exchange fell 550 metric tons, or 0.6 percent, to 93,025 tons, the exchange said yesterday in a daily report. That's the lowest since April 1991.

``Zinc looks as though it's running out,'' said Adam Rowley, a London-based analyst with Macquarie said Nov. 7.

The global market had a production shortfall of 304,000 tons in the nine months through September, the Lisbon-based International Lead and Zinc Study Group said Nov. 15.

``If stockpiles continue to deplete at the current rate, they will be exhausted early next year,'' Gailey said.

Melbourne-based Zinifex is looking to buy mines or companies outside Australia and increase production of other metals as well as zinc.

``We currently produce zinc, lead, copper, silver, gold and are interested in any of those metals,'' he said.

Takeover Targets

Takeover targets in Australia are limited because of a lack of independent, large-sized companies, Gailey said. Zinifex is not keen to acquire domestic rival Kagara Zinc Ltd.

``Kagara is probably a bit small for us. Secondly, Korea Zinc is already a shareholder,'' he said.

Kagara Zinc, based in Perth, said last week it has been ``informally approached'' by a number of interested parties. Korea Zinc Co., the world's biggest producer of the metal, holds 13.7 percent of Kagara, according to an exchange filing in June.

Zinifex itself may be acquired because its shares trade at lower price-to-earnings multiple, compared with those of bigger rivals, Gailey said. Zinifex stock, which has more than doubled this year, trades at 6.7 times earnings, compared with 26 times for Korea Zinc.

``If someone wants to buy, the only issue and debate is the price. We're undervalued and we would certainly be looking for a substantial premium above our current stock price,'' Gailey said. Mining companies ``are all cashed up.''

Zinifex is the best-performer in the 17-member Standard & Poor's/ASX 100 Resources index this year, with a rise of 114 percent. BHP Billiton Ltd., the world's biggest mining company, ranks sixth.

To contact the reporters on this story: Josie Ling in Singapore at Jling5@bloomberg.net Chia-Peck Wong in Singapore at cpwong@bloomberg.net

Last Updated: November 16, 2006 18:32 EST

 

[nizar]

"May" beat last year??
LOL thats pretty funny.
I reckon it will AT LEAST double it
But astute management always aim to underpromise and overdeliver.
This stock is a winner.

 

[porkpie324]

Thanks Fab for that info, ZFX traded down to $14.26 this morning currently $15.01, what a trading opportunity! Looking good for the future going by the article. I haven't traded ZFX but have added them to my CFD watchlist, traded KZL many times. porkpie

 

[Damuzzdu]

Hi, I have been watching and trading ZFX shares for the last 6 months or so and been very happy with the result. I am new to this forum.

One common thing I am sure all of you zinophiles do is to watch the prices of zinc metal while it was traded in LME @ our night time.

After watching it for months and I am still quite confused as where to look and I hope some of you zinc / metal gurus can help me.

I do know the most common (free) place to check is the famous Kitco or Selftrade sites, but I gather they are not LME prices and can be quite different to the LME (or should I say the real) prices. For example, Kitco said this moring zinc was down 1.88% to USD 1.9724 per lb, but when I checked the Zinifex site it says up $95 to $4305 / tonne (which is over 2% up). There is nearly a 4% difference between the quotes, who to believe and who is more important?

There were numerous examples like this if anyone is interested in say comparing Kitco to LME. Does anyone know where to get free realtime LME quotes?

I should have posted this in the zinc prices thread but I am more attached to ZFX. (I know I know do not fall in love with a share). Thanks for reading and I hope someone will advise.

Toothfairy,

1. There is no such thing as free realtime LME quotes. It just does not exist. I have looked for a long time.
2. If you want it be prepared to pay for it. Basemetals.com has realtime quotes from LME rings, LMEselect. It is starts at $A500/mth.
3. You seem to have most bases covered, with Kitco & Selftrade.
4. My take on it is this, there are the LME prices, cash and 3 mth fwd, Kitco (non-LME) which numerous people quote to you on the thread and the ZINC thread.

The problem for me is that Kitcometals is a non-LME price and is a sort-of secondary spot market, I'm not sure if this is right term, (rederob can you confirm this or not?)

Take Friday nite for example:

LME cash ask fell from US$4359/tonne Thursday to US$4110/tonne Friday which has been posted on basemetals.com.

LME 3 mth Fwd ask fell from US$4285/tonne Thursday to US$4070/tonne Friday.

That's a 5.71% fall for cash LME and 4.4% for 3 month fwd.

Yet Kitcometals have Zinc spot (bid) at 1.8839 down 3.82%. The LME cash is = to US$1.8643/lb.

This is probably not much help to you, but.....

I'm considering to subscribing to delayed data from basemetals.com but I'm not sure if I really need it as it trades overnight and I think kitcometals gives us the general direction, although as you rightly pointed it can be wrong at times

Cheers
John

 

[toothfairy]

Toothfairy,

1. There is no such thing as free realtime LME quotes. It just does not exist. I have looked for a long time.
2. If you want it be prepared to pay for it. Basemetals.com has realtime quotes from LME rings, LMEselect. It is starts at $A500/mth.
3. You seem to have most bases covered, with Kitco & Selftrade.
4. My take on it is this, there are the LME prices, cash and 3 mth fwd, Kitco (non-LME) which numerous people quote to you on the thread and the ZINC thread.

The problem for me is that Kitcometals is a non-LME price and is a sort-of secondary spot market, I'm not sure if this is right term, (rederob can you confirm this or not?)

Take Friday nite for example:

LME cash ask fell from US$4359/tonne Thursday to US$4110/tonne Friday which has been posted on basemetals.com.

LME 3 mth Fwd ask fell from US$4285/tonne Thursday to US$4070/tonne Friday.

That's a 5.71% fall for cash LME and 4.4% for 3 month fwd.

Yet Kitcometals have Zinc spot (bid) at 1.8839 down 3.82%. The LME cash is = to US$1.8643/lb.

This is probably not much help to you, but.....

I'm considering to subscribing to delayed data from basemetals.com but I'm not sure if I really need it as it trades overnight and I think kitcometals gives us the general direction, although as you rightly pointed it can be wrong at times

Cheers
John

John,

thanks for your reply, it is helpful to know that can't be helped anyway. Do you think the LME or Kitco price has more bearing on the Zfx SP? May be at the end of the day (or a few days) they catch up or down with each other anyway. We can get the LME price updated @ 8:00am next morning on the Zfx website, what's the earliest time they post it on Basemetal?

I am bracing myself for a 4-5% drop in Zfx price tomorrow morning. I have a large holding (bought average $11.00) but managed only to sell 1/3 @ 16.10. Rederob seems to say it will be alright in a few months.

Good luck, cheerrs.