271 replies to this topic

[Shortboy]

But if that doesn't play out you can get your fingers burnt

I opened a LIMIT KIO long order at R185.

 

Yip, need to do a bit more work on the viability of a short. Here goes:

 

Profile Data Consensus (made up of opinions of 4 KIO analysts) for Headline Earnings was R29.89 per share. According to trading statement on 15 Jan KIO will exceed expectations by achieving between R33.10 and R35.60 per share - with an overall negative response from the market on the day - supporting growing negative perception dogging this share.

 

Profile Data Consensus for dividend (a BIG driver of KIO's price) per share at Dec 14 Final is R21.91 ( I assume this includes the interim dividend already paid in '14 of R15.61). So, if the final dividend is less than R6.30 it will be below expectations and could trigger a sell off.

 

The overall Profile Data Consensus view from 4 brokers tracking this share has been SELL as of 5 Feb 15 - which is typical of analysts, they always recommend SELL when it's too late and BUY when it's too late.

 

Daily 20 day chart trend still firmly down with share price sitting right on the 20 MA trend line and 10 day MA now below 20 day. Problem here is that the price is now where it was in Oct '09, the last level of support and a perfect place for a reversal back up.

 

Nah! I will give going short of KIO at this level a miss. You just cant trust company directors, they are worse than bankers. 

 

Looking forward to a nasty surprise on Tuesday!!

[BlythZ]

Check the article from Soutie's post below 

 

At current price it could also be a good place to have an existing speculative short position with an automated exit set at R185 so you can can catch both the shock over reaction down and the reversal when the price adjusts back up......   

But if that doesn't play out you can get your fingers burnt

[Shortboy]

I agree. Even if it takes a few years for iron ore (and KIO) prices to start rising again. Good luck!

 

I agree. Even if it takes a few years for iron ore (and KIO) prices to start rising again. Good luck!

Check the article from Soutie's post below 

 

At current price it could also be a good place to have an existing speculative short position with an automated exit set at R185 so you can can catch both the shock over reaction down and the reversal when the price adjusts back up......   

[Shortboy]

Will mark the 10th of Feb in my diary. It would be great to get in at that level. 

I agree. Even if it takes a few years for iron ore (and KIO) prices to start rising again. Good luck!

[BlythZ]

Kumba releases its results on 10 Feb. Earnings guidance is down by around 30% +, If they revert to a dividend cover ratio of 1.5 like they have in previously lean times, it could lead to a nasty sell reaction from dividend hunters who have done brilliantly out of this share for the last few years. Its still a great share and I don't believe the China cycle is over forever.

 

So, my play is to be ready with a standing buy order at a significantly lower level (R185) to capture any over-reactions that briefly occur in the first few minutes when any surprise announcements about a cut to a dividend take place.

 

Eqstra is another 1. I think those directors (bless them) are hiding something up their sleeves. They report on 3 April. The share has already taken a big hit. I have a standing buy order at R1.50 just in case they shock the market.

 

It could be a trade or an investment. Depends on what happens on the day.

Will mark the 10th of Feb in my diary. It would be great to get in at that level. 

[Shortboy]

Yeah I'd go along with that.

Having been short most of last year my bias is for 1 more " trader induced bottom " then a steady albeit slow grind upwards.

I'm waiting for that scenario & have a buy order in at R218+change  

Kumba releases its results on 10 Feb. Earnings guidance is down by around 30% +, If they revert to a dividend cover ratio of 1.5 like they have in previously lean times, it could lead to a nasty sell reaction from dividend hunters who have done brilliantly out of this share for the last few years. Its still a great share and I don't believe the China cycle is over forever.

 

So, my play is to be ready with a standing buy order at a significantly lower level (R185) to capture any over-reactions that briefly occur in the first few minutes when any surprise announcements about a cut to a dividend take place.

 

Eqstra is another 1. I think those directors (bless them) are hiding something up their sleeves. They report on 3 April. The share has already taken a big hit. I have a standing buy order at R1.50 just in case they shock the market.

 

It could be a trade or an investment. Depends on what happens on the day.

[BlythZ]

Ah Impala --   someone many moons ago said there is sangoma's there -- BS says I wow lost my shirt & have ever since. Price per share R168.00 long was I capitulated at R135.00 lesson learnt fingers burnt & never recouped much back.

For me Impala is a free spirit roaming the African savanha's blissfully unaware of platinum.

 

So yeah I'll also pick Kumba.

You made me laugh. But i respect you for cutting your losses early, i guess the sangoma never imagined that Impala would drop to below R80/share

[soutie]

Ah Impala --   someone many moons ago said there is sangoma's there -- BS says I wow lost my shirt & have ever since. Price per share R168.00 long was I capitulated at R135.00 lesson learnt fingers burnt & never recouped much back.

For me Impala is a free spirit roaming the African savanha's blissfully unaware of platinum.

 

So yeah I'll also pick Kumba.

[BlythZ]

Yeah I'd go along with that.

Having been short most of last year my bias is for 1 more " trader induced bottom " then a steady albeit slow grind upwards.

I'm waiting for that scenario & have a buy order in at R218+change  

Thanks Soutie, 

 

But we might not get it around those levels, this one looks like it wants to run, and this is the same scenario that i see on Impala but Kumba would be my pick 

[soutie]

My indicators are saying Kumba is now a buy. What are your thoughts on going long on Kumba?

Yeah I'd go along with that.

Having been short most of last year my bias is for 1 more " trader induced bottom " then a steady albeit slow grind upwards.

I'm waiting for that scenario & have a buy order in at R218+change  

[BlythZ]

My indicators are saying Kumba is now a buy. What are your thoughts on going long on Kumba?

[soutie]

M e r l i n, this is an old comment...Single Commodity shares are bottomless pits if you ask me ! i took my haircuts months , used whatever was left to settle my debts...i'm just an observer these days licking my wounds....

 

Sorry to hear that McEdama, it does happen the darlings can also turn into mutts that become rabid turn around & bite...!

 

You will be back......to be continued.......

[McEdama]

Hello Miss, you are way off the mark, it is closer to 215 than 315, 251 close and counting.

M e r l i n, this is an old comment...Single Commodity shares are bottomless pits if you ask me ! i took my haircuts months , used whatever was left to settle my debts...i'm just an observer these days licking my wounds....

[M e r l i n]

Hello Miss, you are way off the mark, it is closer to 215 than 315, 251 close and counting.

 

KIO was way oversold even @ the current Iro Ore levels of +/- $78/tonne, i see it stabilizing @ +/- R315 ...the vlitality is going to continue for next year or so though until they reduce surplus ore in China.

[M e r l i n]

Nor the investors previously accustomed to large dividends

 

Ah well, sold the small position I had - took a 27% haircut. Bought a few more hyprop. Although Kumba has great quality ore, I think the wage bill is going to bite them in the ass. The workers will not be happy when they do not get the large/massive bonuses they received in the past.

[MrDividend]

Ah well, sold the small position I had - took a 27% haircut. Bought a few more hyprop. Although Kumba has great quality ore, I think the wage bill is going to bite them in the ass. The workers will not be happy when they do not get the large/massive bonuses they received in the past.

[soutie]

For those frogs in the water - It should start to boil early next year 

 

http://www.mineweb.c...sn=2014 details

 

Still short $$$$

 

Sounding like a broken record I know sorry...

[M e r l i n]

Don't be fooled by Kumba, title of Mineweb article http://www.mineweb.c...57689&sn=Detail

[delta66]

 thinking of dropping them on my LT port..will walk @default loss but can make it up somewhere else very easily or write down on tax. 

 

team delta 0 - market 1

[Mr.Balls]

Not all mining stocks are created equal.

 

Some I believe (like Kumba) are more equal than others.

Iron ore is another industrial staple. The chart above shows that after screaming to a 1500% gain from 1999 to February 2011, iron ore reversed dramatically. After rallying to a countertrend high in February of last year, it's down another 50% and appears to be in the middle of a third wave.

Eventually, iron ore should fall back to the $11 metric ton level, where it was in 1999. In a bet that higher volumes would "more than offset falling prices, big producers expanded output in recent years." In an environment of global growth, Goldman Sachs estimated that global surpluses would rise from 52 million tons in 2015 to 295 million in 2017. As the economy contracts, the glut should be even more pronounced than anticipated. Similar stories will proliferate in other markets.