Post by
rkhosla on Jul 28, 2022 11:43am
Thoughts on call
1) Nary a mention on LME dysfunction / price discovery / price setting
2) They seem extremely pesimistic on NDCC for H2 - forcasting higher end ($4.50) of range for 2022 average which means they see it well above $5 for q3 and q4. Perhaps there is room for a positive surprise here. Fertilizer absolutely saved them if you look at the waterfall chart for NDCC.
3) The new IR guy seems stunned / not particularly dynamic
4) Glad they are taking a disciplined step wise approach to capital projects. Glad these are self funded from MOA cash flow. Glad cap ex for year has dropped to $60mil
6) Makes me sad that in the quarter of highest nickel prices average in years they somehow managed to have unsold inventory pile up. As they were witnessing this happen, why in gods name did they not hedge/buy some put options at higher prices. Regardless, we do not sell perishable food items for example or clothes they will go out of fashion. Our inventory will be sold I'll be at now at lower prices.
7) If you read their actual press release, they specifically state LFP is eating into their share of the midmarket. So yup that is really happening. I only had a cursory glance but I did not see anything about other routes or other feedstocks for battery producers such as matte etc.
8) There were a couple non-cash items that juiced the bottom line. They recorded a gain related to the repurchased debt. And of course there was a reversal of the stock option costing. Regardless this was a solid quarter. I feel they will remain profitable in H2. I think we will end up with an EPS of about $.35 over the year. So that's a PE ratio of 1 : ) I agree that though an orphan now, you can't have a company puking out cash and being so undervalued sitting there forever.
9) The operator seemed embarrassed on managements behalf in regards to no calls at the end. It was so comical when she interrupted say 'oh now there is a call! oops no there isn't'. Even the guy who always starts his questions with "congratulations on another great quarter" did not show up. lol dog days of summer