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Small Caps: Which is the Next Ten Bagger?

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#581 yusufm

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Posted 28 April 2015 - 02:50 PM

I am new to all these npl's too. So if I purchase 1000 rights - and then 1000 NHM shares for the price of R41.00 I can resell them for current market value R48.00? Sounds a bit too good to be true. How many shares can be purchased with each Right?


1 right has to be exercised to get 1 underlying share.

So if you buy 1000 rights at 77c then take them up for a further 4100, you will have 1000 underlying shares at an average cost of 4177cps. But you will only receive these shares after the expiry date of the NPL'S. That's why the rights need to trade at underlying-strike price to eliminate the arbitrage opportunity and why I'm saying the rights are severely undervalued currently
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#582 Magnet

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Posted 28 April 2015 - 02:42 PM

[quote name="Reen" post="255365" timestamp="1430223208"]

Newbie with a silly question, please entertain me :). So what actually happens to your shares when NHNM stops trading?[/quote
you have 3 options with NPL's.
You either take up the underlying share at the strike price, in this case NHM at 4100.
Or you sell them on market before they stop trading (which should be at technically the underlying price - strike price)
Or should you do nothing, the rights will be worth nothing after the election date has passed

 

I am new to all these npl's too.  So if I purchase 1000 rights - and then 1000 NHM shares for the price of R41.00 I can resell them for current market value R48.00?  Sounds a bit too good to be true.  How many shares can be purchased with each Right?


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#583 yusufm

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Posted 28 April 2015 - 02:37 PM

[quote name="Reen" post="255365" timestamp="1430223208"]

Newbie with a silly question, please entertain me :). So what actually happens to your shares when NHNM stops trading?[/quote
you have 3 options with NPL's.
You either take up the underlying share at the strike price, in this case NHM at 4100.
Or you sell them on market before they stop trading (which should be at technically the underlying price - strike price)
Or should you do nothing, the rights will be worth nothing after the election date has passed
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#584 Reen

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Posted 28 April 2015 - 02:13 PM

Newbie with a silly question, please entertain me :). So what actually happens to your shares when NHNM stops trading?


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#585 yusufm

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Posted 28 April 2015 - 01:40 PM

Yip by book they should be trading at 600+

NHM SP - 4100

Edited by yusufm, 28 April 2015 - 01:42 PM.

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#586 Shi

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Posted 28 April 2015 - 01:06 PM

NHNM stops trading on the 15th of May. Massive difference between share price and rights offer. Weird.


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#587 Magnet

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Posted 28 April 2015 - 11:50 AM

Hey, sorry for the slow reply sugafoot, didn't see your message.

NUT is not one that I'm currently watching, find them a bit sketchy. Probably won't go passed 4c though unless earnings are really excellent.

Buying up NHMN at around 100c, really underpriced.

 

Yusuf, Do you see value in these Rights? NHNM is going for 76c now.  When do they stop trading?


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#588 MrDividend

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Posted 28 April 2015 - 10:52 AM

Anyone has a clue what is happening with Rhodes Food Group (RFG). Stock is in free fall at the moment?!

 

Yup, all over the place, was down 10% now up 1%. Good buying opp in my book, have added a few more


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#589 Slickjoe

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Posted 28 April 2015 - 09:53 AM

Anyone has a clue what is happening with Rhodes Food Group (RFG). Stock is in free fall at the moment?!


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#590 yusufm

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Posted 28 April 2015 - 09:15 AM

Yusuf, what are your thoughts on Nutrition holdings?<br />SENS out yesterday saying earrings are expected to be above 20%


Hey, sorry for the slow reply sugafoot, didn't see your message.

NUT is not one that I'm currently watching, find them a bit sketchy. Probably won't go passed 4c though unless earnings are really excellent.

Buying up NHMN at around 100c, really underpriced.
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#591 Matthew

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Posted 23 April 2015 - 07:27 PM

Sugafoot, Finbond is up on massive growth in earnings! In my opinion, this one is good for 30-50% p/a. Really smart guys running the show at FGL!
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#592 Queen B

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Posted 22 April 2015 - 12:46 PM

Sugafoot, interesting article on moneyweb the other day about the industry in general:

 

A fat investment opportunity


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#593 Sugafoot

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Posted 22 April 2015 - 12:10 PM

Yusuf, what are your thoughts on Nutrition holdings?<br />SENS out yesterday saying earrings are expected to be above 20%
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#594 Sugafoot

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Posted 22 April 2015 - 12:09 PM

Yusuf, what are your thoughts on Nutrition holdings?<br />SENS out yesterday saying earrings are expected to be above 20%
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#595 yusufm

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Posted 22 April 2015 - 09:45 AM

Bought ING on back of good trading statement
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#596 Sugafoot

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Posted 20 April 2015 - 06:50 PM

While Finbond was up 25%.<br />Anybody got any idea why?
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#597 Queen B

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Posted 20 April 2015 - 12:16 PM

Kibo is FLYING in London today

Over 18.5 million shares traded so far and up 70% for the day


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#598 yusufm

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Posted 20 April 2015 - 09:39 AM

Excellent JV for Kibo. SENS just out. Time for me to top up :D

Done at just over 150cps each. Hope for a steady rise from here. Using just the Rukwa project to price Kibo, it gives a MC translating to over 350cps so I'll be holding tightly :)


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#599 yusufm

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Posted 20 April 2015 - 08:09 AM

Excellent JV for Kibo. SENS just out. Time for me to top up :D
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#600 Shortboy

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Posted 17 April 2015 - 02:25 PM

My picks are Diamondcorp (DMC) and ISA (ISA). Have been invested in both for 1 year and 3 years respectively - buy and hold plays.

 

DMC has had a ghastly time over the last 5 or so years (I bought close to the bottom). It has however significantly de-risked itself and looks well on track to deliver on its project by about this time next year. If you like diamonds have a look. You can read the full story in their sens/aim posts to get the background. It used to be around R15 a share when it was a just a business plan, its now around R1.11 a share and is almost a fully operational mine and good to go. Quoted on Altx and AIM. see http://www.diamondcorp.plc.uk/home

 

ISA is a small company that specialises in IT information security (counter hacking and customer system and data protection). It pays good dividends, watches its costs, is always profitable, never has bank debt, is cashflow positive and on a div yield of about 6.5%. Good results are due in the next week or so. They are perfectly positioned to take advantage of the new POPI law which every business in SA will, like it not, have to comply with. 

 

As a 10 bagger? DMC is probably more likely to make it once it has dispelled the fear and distrust of erstwhile burned shareholders. ISA is a solid little company in a soon to be great business environment.

We are nearly a year on and here is where we are on these 2 picks I have been holding (not trading).

 

DMC is R2.00, up 80% despite the resources sell offs we have been seeing. They should be giving their quarterly project update at the end of this month which should confirm commencement of diamond mining operations in the next month or 2. The share price has been building a solid base for the last few weeks dragging unwilling buyers up to higher and higher prices. It went to R15 per share when it was just a business plan, lets see where it goes to when it is actually producing pink diamonds in the next month or so.  

 

ISA is R0.84, up 8% Recent trading statement tells us EPS will be up 19%. If they stick to there usual high dividend pay out level we can expect another 5% to 10% upward move in share price. The true value in this strock will only show itself once the effective date for the commencement of POPI (core to ISA's business) is published by the state. 


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