Largo Inc T.LGO

A scary possibility

[kha341]

 

Largo stock is in the low teens while the benchmark V2O5 prices are above US$10/lb.

Can this scenario be possible: A single digit C$sp in early May which will get hammered even  further down after the Earnings CC?

A scary thought that keeps me awake at night!

My back-of-the-envelope estimation indicates that we need the average price of V2O5 equivalent sold to be around US$7.30 for Largo to break even with regard to EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization)  in 2022. And I’m not even talking about the bottom line. 

[NewAgeMetal]

I think you're right onto it though (12,500*2,200*$3)/65M = $12-13

[kha341]

12,500*2,200*$3)/65M = $12-13??? What do  $3 represent? How do you get to $3?

[NewAgeMetal]

$3 = my estimated ebita/lb $12-$13 shares price resulting 

[kha341]

$3 = my estimated ebitda/lb? EBITDA (not bottom line Earnings)? Sounds logical if they can sell their V2O5 equivalent at above US$10/lb on average throughout the year. Which is a big “if”. Don’t forget that our V2O5 equivalent has consistently  been sold at a discount to the average spot prices of the standard V2O5. Furthermore if the BRL keeps gaining over the US$ our operating costs will

[NewAgeMetal]

Exactly! my my most humble opinion, the market is digesting that $12 vanadium isn't happening, $70M EBITDA isn't happening and $175M free cash flow for share repurchase/dividend probably isn't happening  given that $12-$13 is our new home

[kha341]

$12-13 is our new home? You are more generous than me. Imo, the prospect of a single digit sp  after the release of the Q1-22 Results is not to be dismissed. .Shareholders are not happy with the progress of the transition period. And catching a falling knife is not exactly what new investors are looking for, is it?.

[ceetong]

LOL, guess who wrote THIS just 12 weeks ago: "Largo’s fundamentals are strong. Our Gross Margin = 37.6% and Net Margin = 15.1% (source = Thomson Reuters Refinitive Report). Largo is a net-debt-free cash machine.    The abnormal rainfall affecting Q4 production was out of the control of Management. [absence of proper drainage was out of their control, too?] The new 2022

[NewAgeMetal]

Oh hell no! you feel like taking someone up with Kha, so it on a new thread, I don't want anything to do with this. For what it's worth though, I was feeling pretty positive back then as well, turning the page and moving forward.

[ceetong]

Well, in my book that's exactly the type of response that you get and deserve when you make disparaging postings pointing out others must be wrong just because they haven't posted before or don't own the stock (which was a wrong assumption in the first place anyway). Mr. Knowitall stated "You have never posted here before have you? Have you just decided to become a Largo