Silver metal corp, SVM has taken quite a hit over the last two years. Reports from websites such as Seeking Alpha have not always been kind to the company with accusations of false reporting of earnings and cash flows.
While it's true that silver as well as other precious metal have taken a beating since 2011, the long term fundamentals still exist that will likely propel prices higher in the near future. There are no indications of a slowdown of quantitative easing from the Federal Reserve until 2014. (Though, I am quite certain there will not be much of a reduction of asset purchases, if any at all) as
well as the continuing doubt of Europe's ability to pull itself towards
financial stability. Thus making precious metal miners a risky but
possibly lucrative bet.
It's also worth noting that there are many
shorters out there whom seem to prey on investor doubts and hesitations
of companies that have a lot of their operations in China. Please carefully consider this when deciding what stocks to buy and sell.
SVM
currently trades at $2.74 has and has a Beta of 1.42.
With an average
price-target of $4.15. Price Target Source:
http://finance.yahoo.com/q/ao?s=SVM+Analyst+Opinion
If the analysts are correct, you're looking at a 51.46% growth in the stock.
.0276 + 1.42(.0746-.0276): 9.434%
The
CAPM equations suggests that the stock is a buy. Though, I would keep
an eye on the news that comes out of their upcoming conference call.
(Nov 15, 2013, Q2 2014 Silvercorp Metals Inc Earnings
Release-Tentative).
The 7.46% comes from the average 10 year return for the S&P 500.
https://personal.vanguard.com/us/funds/tools/benchmarkreturns
The 2.76% comes from the ending of today's (11/12/2013) 10-year treasury yield.
http://www.marketwatch.com/investing/bond/10_year
Silvercorp Metals Inc. (Silvercorp) is engaged in the acquisition,
exploration, development and mining of silver-related mineral properties
in China and Canada. Silvercorp is the primary silver producer in China
through the operation of the four silver-lead-zinc mines at the Ying
Mining District in the Henan Province of China. The Company has
commenced production at its second production foothold in China, the BYP
gold-lead-zinc project in Hunan Province and is building the GC
silver-lead-zinc project in Guangdong Province as its third production
base in China. During the fiscal year ended March 31, 2012 (fiscal
2012), Silvercorp acquired the XBG and XHP silver-gold-zinc projects
near the Ying Mining District in Henan Province. On December 2, 2011,
the Company, through its 77.5% owned subsidiary Henan Found Mining Co.
Ltd., acquired 100% interest in Songxian Gold Mining Co. Ltd. In April
2013, New Pacific Metals Corp. acquired an 80% interest in Fortress
Mining Inc. from the Company.
Tuesday, November 12, 2013
Thursday, November 7, 2013
A word on Twitter...
From: http://money.cnn.com/2013/11/07/technology/social/twitter-ipo-stock/
Twitter priced its initial public offering Wednesday night at $26 a share. The stock debuted at 10:49 a.m. ET on Thursday on the New York Stock Exchange, and the first trade came in at $45.10 a share.
Shares quickly jumped to a high of $50.09 -- a gain of
93% over the IPO price -- before dropping back to about $45.30 later in
the morning.
At a price near $45 a share, Twitter (TWTR) is valued at $24.6 billion.
Twitter's pop is similar to that of LinkedIn (LNKD), which more than doubled in its first day on the stock market. But it was Facebook's messy debut on the Nasdaq last year that had some individual investors worried ahead of Twitter's IPO. Luckily for Twitter, its offering went smoothly.
"We tried to have a very clean process [for the IPO] ... the team that worked on it inside the company was very methodical," Twitter CEO Dick Costolo said on CNBC earlier in the morning.
"Phew!" tweeted Anthony Noto, Twitter's top banker at Goldman Sachs (GS, Fortune 500) (which led the underwriting of the IPO) after trade started.
Twitter was the most actively traded stock in the U.S. Thursday. More than 70 million shares exchanged hands in the first hour of trading.
I'm not too big on Social Media stocks, any of them.
First, there's too much risk in "advertising". The CPM's are likely to fall unless there is significant work done to clear out the spammers and fake followers. The latter of which will cause huge distortions in determining proper CPM's revenue. Further, I'm bearish on the U.S. economy and by extension, the U.S. consumer, thus the cost of running ads will not generate as much revenue in turn for the businesses themselves.
That being said, I am not at all opposed or even bearish on the idea the transition of advertising revenue coming from online ads rather than the traditional TV and print ads. However, expectations of the revenues as the result of this phenomenon are at this point simply exaggerated.
The easy money policy we have the United States has made it very attractive for companies to go public. Using the cheap money in the equity market instead of turning a real profit as a way to outlast the recession is a game that will eventually come to an end.
Also, the economics of Twitter reveal a bit of problem (From the story linked above)
Twitter isn't yet profitable: Twitter raised about $1.8 billion through the sale of 70 million shares Wednesday evening at $26 a share. The offering's underwriters also have the option to buy another 10.5 million shares from Twitter. By comparison, Facebook (FB, Fortune 500) raised $16 billion in its IPO.
But unlike Facebook, Twitter has yet to turn a profit. The company pulled in $317 million in sales in 2012, but ended up reporting a loss of $79.4 million.
For the first nine months of 2013, Twitter's revenue was $422 million. But losses also increased, to $134 million.
$317 million generated a loss of $79.4 million.
$422 million generated a loss of $134 million.
Meaning that while revenue grew at about 33%, the losses grew by an astounding, 68.76%! Twitter's not a warehouse or retail company. Expansion does not mean hiring $8 an hour employees. They require S.E.O. and other costly tech employees to grown their business. Additionally, they would have to gain huge economies of scale with their existing infrastructure and/or, expand their company in a much cheaper place than the Bay Area of Northern California. Perhaps this was discussed with the analyst at Goldman or others in the syndicate. Maybe this forward outlook is buried in a press release or a somewhere in the companies financials. I honestly don't know.
However, if you're a day trader, you might be able to profit off the myopia for a while. Hell, Yelp's still not profitable and look where that went. Timing is everything in this market.
Bottom line: TWTR:
As a trade: Sure, knock yourself out!
As a long term investment: I'd wait a while.
Twitter priced its initial public offering Wednesday night at $26 a share. The stock debuted at 10:49 a.m. ET on Thursday on the New York Stock Exchange, and the first trade came in at $45.10 a share.
At a price near $45 a share, Twitter (TWTR) is valued at $24.6 billion.
Twitter's pop is similar to that of LinkedIn (LNKD), which more than doubled in its first day on the stock market. But it was Facebook's messy debut on the Nasdaq last year that had some individual investors worried ahead of Twitter's IPO. Luckily for Twitter, its offering went smoothly.
"We tried to have a very clean process [for the IPO] ... the team that worked on it inside the company was very methodical," Twitter CEO Dick Costolo said on CNBC earlier in the morning.
"Phew!" tweeted Anthony Noto, Twitter's top banker at Goldman Sachs (GS, Fortune 500) (which led the underwriting of the IPO) after trade started.
Twitter was the most actively traded stock in the U.S. Thursday. More than 70 million shares exchanged hands in the first hour of trading.
I'm not too big on Social Media stocks, any of them.
First, there's too much risk in "advertising". The CPM's are likely to fall unless there is significant work done to clear out the spammers and fake followers. The latter of which will cause huge distortions in determining proper CPM's revenue. Further, I'm bearish on the U.S. economy and by extension, the U.S. consumer, thus the cost of running ads will not generate as much revenue in turn for the businesses themselves.
That being said, I am not at all opposed or even bearish on the idea the transition of advertising revenue coming from online ads rather than the traditional TV and print ads. However, expectations of the revenues as the result of this phenomenon are at this point simply exaggerated.
The easy money policy we have the United States has made it very attractive for companies to go public. Using the cheap money in the equity market instead of turning a real profit as a way to outlast the recession is a game that will eventually come to an end.
Also, the economics of Twitter reveal a bit of problem (From the story linked above)
Twitter isn't yet profitable: Twitter raised about $1.8 billion through the sale of 70 million shares Wednesday evening at $26 a share. The offering's underwriters also have the option to buy another 10.5 million shares from Twitter. By comparison, Facebook (FB, Fortune 500) raised $16 billion in its IPO.
But unlike Facebook, Twitter has yet to turn a profit. The company pulled in $317 million in sales in 2012, but ended up reporting a loss of $79.4 million.
For the first nine months of 2013, Twitter's revenue was $422 million. But losses also increased, to $134 million.
$317 million generated a loss of $79.4 million.
$422 million generated a loss of $134 million.
Meaning that while revenue grew at about 33%, the losses grew by an astounding, 68.76%! Twitter's not a warehouse or retail company. Expansion does not mean hiring $8 an hour employees. They require S.E.O. and other costly tech employees to grown their business. Additionally, they would have to gain huge economies of scale with their existing infrastructure and/or, expand their company in a much cheaper place than the Bay Area of Northern California. Perhaps this was discussed with the analyst at Goldman or others in the syndicate. Maybe this forward outlook is buried in a press release or a somewhere in the companies financials. I honestly don't know.
However, if you're a day trader, you might be able to profit off the myopia for a while. Hell, Yelp's still not profitable and look where that went. Timing is everything in this market.
Bottom line: TWTR:
As a trade: Sure, knock yourself out!
As a long term investment: I'd wait a while.
Wednesday, November 6, 2013
My first pick!
After writing my "If I was a Portfolio Manager" post on my other blog here, I decided to create another blog specifically for securities I would select if I were actually a portfolio manager.
Well, I am not going to create an entire portfolio, as I believe that would useless to most individual traders and investors. (Not to mention a little too complex!)
But I can do this:
I will provide stock name, symbol, sector, price at the end of the prior day (unless something significant happens on the following trading day) and what price target I think it should have based on forward guidance provided by a number of different analysts. I'll also use a basic CAPM equation to see if the possible movement of the price in either direction is worth the return. For the CAPM equation, I will use the prior days 10 year treasury bill rate.
First post, first Stock:
Seadrill. SDRL, drilling and exploration.
Currently selling at $46.95.
Let's use Yahoo Finance which actually uses information from Thomson Reuters to get a average price target.
Yahoo Medium Price Target: $48.
http://finance.yahoo.com/q/ao?s=SDRL
So if you're looking to buy SDRL for it's possible ~$1.05 appreciation, the CAPM equation says:
2.65% + 1.65( 7.46% -2.65%): 10.59%
So you're $1.05 (2.24%) potential increase in stock appreciation not exactly worth the risk or opportunity cost for a quick trade. However, that's moot if you're looking for a good long-term buy, and if that's your goal, this is your stock!
At a $46.95 price, SDRL has a 7.75% dividend. You combine that with the fact that this a relatively defensive industry which is based in stable and monetarily independent Norway, give you a safe long term stock despite its high Beta. I'd even recommend buying dips well below the $44 level as long as there are no indications of huge drilling accident (they happen!) or a dividend cut.
The 7.46% comes from the average 10 year return for the S&P 500.
https://personal.vanguard.com/us/funds/tools/benchmarkreturns
The 2.64% comes from the ending of today's (11/6/2013) 10-year treasury yield.
http://www.marketwatch.com/investing/bond/10_year
Generally speaking, I will always have an affinity for good dividend paying stocks. With the high levels of seniors getting ready to retire and live on fixed income combined absolutely dismal yields in traditional "low-risk" fixed income products like treasuries, I see these stocks getting squeezed for their yields.
Seadrill Limited (Seadrill) an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of jack-up rigs, tender rigs, semi-submersible rigs and drillships for operations in shallow, mid and deepwater areas, and in benign and harsh environments. It operates in three segments: floaters (world-wide), jack-up rigs (world-wide) and tender rigs (mainly in south-east Asia and Africa). Seadrill owns and operates a fleet of 59 offshore drilling units, which consist of 13 semi-submersible rigs, nine drillships, 21 jack-up rigs and 16 tender rigs, including 16 units, which is under construction, which consists of five drillships, one semi-submersible rig, five jack-up rigs and five tender rigs. On November 28, 2012, the Company acquired 65.95% interest in Asia Offshore Drilling Limited. In May 2013, the Company sold T-15 tender rig to Seadrill Partners LLC.
Update! 11/9/2013
This article on seeking Alpha is a little more skeptical on the long term prospects for SDRL's dividends. Might be worth taking a look at.
http://seekingalpha.com/article/1825582-seadrills-dividend-does-not-look-sustainable?source=email_rt_article_readmore
Well, I am not going to create an entire portfolio, as I believe that would useless to most individual traders and investors. (Not to mention a little too complex!)
But I can do this:
I will provide stock name, symbol, sector, price at the end of the prior day (unless something significant happens on the following trading day) and what price target I think it should have based on forward guidance provided by a number of different analysts. I'll also use a basic CAPM equation to see if the possible movement of the price in either direction is worth the return. For the CAPM equation, I will use the prior days 10 year treasury bill rate.
First post, first Stock:
Seadrill. SDRL, drilling and exploration.
Currently selling at $46.95.
Let's use Yahoo Finance which actually uses information from Thomson Reuters to get a average price target.
Yahoo Medium Price Target: $48.
http://finance.yahoo.com/q/ao?s=SDRL
So if you're looking to buy SDRL for it's possible ~$1.05 appreciation, the CAPM equation says:
2.65% + 1.65( 7.46% -2.65%): 10.59%
So you're $1.05 (2.24%) potential increase in stock appreciation not exactly worth the risk or opportunity cost for a quick trade. However, that's moot if you're looking for a good long-term buy, and if that's your goal, this is your stock!
At a $46.95 price, SDRL has a 7.75% dividend. You combine that with the fact that this a relatively defensive industry which is based in stable and monetarily independent Norway, give you a safe long term stock despite its high Beta. I'd even recommend buying dips well below the $44 level as long as there are no indications of huge drilling accident (they happen!) or a dividend cut.
The 7.46% comes from the average 10 year return for the S&P 500.
https://personal.vanguard.com/us/funds/tools/benchmarkreturns
The 2.64% comes from the ending of today's (11/6/2013) 10-year treasury yield.
http://www.marketwatch.com/investing/bond/10_year
Generally speaking, I will always have an affinity for good dividend paying stocks. With the high levels of seniors getting ready to retire and live on fixed income combined absolutely dismal yields in traditional "low-risk" fixed income products like treasuries, I see these stocks getting squeezed for their yields.
Seadrill Limited (Seadrill) an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of jack-up rigs, tender rigs, semi-submersible rigs and drillships for operations in shallow, mid and deepwater areas, and in benign and harsh environments. It operates in three segments: floaters (world-wide), jack-up rigs (world-wide) and tender rigs (mainly in south-east Asia and Africa). Seadrill owns and operates a fleet of 59 offshore drilling units, which consist of 13 semi-submersible rigs, nine drillships, 21 jack-up rigs and 16 tender rigs, including 16 units, which is under construction, which consists of five drillships, one semi-submersible rig, five jack-up rigs and five tender rigs. On November 28, 2012, the Company acquired 65.95% interest in Asia Offshore Drilling Limited. In May 2013, the Company sold T-15 tender rig to Seadrill Partners LLC.
Update! 11/9/2013
This article on seeking Alpha is a little more skeptical on the long term prospects for SDRL's dividends. Might be worth taking a look at.
http://seekingalpha.com/article/1825582-seadrills-dividend-does-not-look-sustainable?source=email_rt_article_readmore
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