Kenmare Resources

23rd Jan by doctor dave

11 comments 951 reads

Kenmare Resources (LON:KMR) seems to be lagging to an extraordinary extent. The share price is 325p with a book value of 1150p. Earnings per share are forecast downwards and no doubt heavy mineral sands are cyclical, but there is a 10% dividend yield to assuage the pain while waiting for cyclical recovery. It seems inexpensive and I am wondering why it is so very lowly valued? Any thoughts? (I hold). Thanks all.

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About the Author

Doctor Dave

Premium Member

A grizzled veteran of the NHS

11 comments

N0vice1Nvest0r

23rd Jan

I hold this stock and in my opinion the figures look good. I too would don't understand the downtrend. Is it related to Red Sea, which I think is doubtful. Or is it just the good old unwanted stock due to other trends being more attractive?

Any input would be greatly appreciated

DavidMcCabe

23rd Jan

I hold this on a small way and am positive on the stock. However I see it as a long term hold, as there is major capital expenditure required over the next few years on moving their dredging platform from one site to another.

Once this has been achieved and risk and expenditure has reduced this will be be hugely lucrative.

The mining process and the technology is fascinating, and it is well worth visiting their website to see how it works and how the previous dredger move went.

Redice

23rd Jan

I hold as well but having read the Q4 2023 Poduction report and 2024 guidance published last week,http://newsfile.refinitiv.com/... it appears that 2023 production was lower than 2022 across all metrics and at higher cost. 2024 guidance is for lower production again at even higher cost. Also looks like the dividend has been reduced by $8 million and the capital expenditure project is going to cost about 25% more than expected.

Apart from that it's all going very well.

N0vice1Nvest0r

23rd Jan

Thanks for this. It doesn't sound bad, but it will lead me to change the size of my position.

Lincs

24th Jan

Figures from Sharepad (no guarantee of accuracy) look dire for next 2 years - the below figures are '24 compared to '23 and then '25 compared to '24 (where available)

Pre-tax profit -35% / -20%

EPS - 33% / -15%

Capex +220% / -14%

FCF -87% / NA

Probably good enough reason for falls - which may get worse yet?

N0vice1Nvest0r

24th Jan

cheeky question? Is there a way to see all stocks projections like this?? website??

Redice

25th Jan

If you are looking for Production reports/future guidance you can find recent reports for an individual stock by going to Investegatehttps://www.investegate.co.uk/... and putting the stock you want in the Search box and scrolling down the RNS to find the last report.

James Fitzpatrick

30th Jan

The price just keeps on dropping I really don’t understand

sevenccc

31st Jan

Hi Doctor Dave

Kenmare Resources (LON:KMR) looks like a good long term play but there would appear to be lots of lower risk, shorter term plays that are attracting the available funds. Specifically:

Production is heading down

China is not showing any signs of revival so no particular demand driver in sight

Major capex required and whilst that shouldn't be an issue given profitability of this business. Financing is ways a concern and maybe putting people off.

Executional risk of the move to new resource is always there. But there seems to be plenty of resource - unlike Base Resources (LON:BSE) where they need a new Government licence to have any future.

Pricing seems to be under pressure too

Dividend likely to drop, though still good. Unless they put that in to the financing?

I have this on watchlist and alerts set but want to see a bounce first. Have caught too many falling knives previously.

Just my view. I have no inside knowledge

doctor dave

3rd Feb

Agree that it looks like a good longer term investment but is bottoming out on a cyclical basis.

Richard Farrow

3rd Mar

Early days but chart indicates possible support at 300p. Could be good time to buy but I may just watch for a while.

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About the Author

Doctor Dave

11 comments

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