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19/03/17
05:06
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Originally posted by ContraryJ
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All true and I will not argue increasing sales are good. You fail to look any further than AL’s words.
If (a big if) I am correct and they are running out of room to create cash with things like inventory, payables and receivables you will have an awaking in 6 weeks. Now after watching the last 3 major misses in your cash predictions maybe this one will not make a difference either. We will see. Or maybe I am wrong and you are right and I will need to reevaluate, after first saying I missed, maybe even say, missed bad. Note there is a gray area from about -2M to -4M where we are both wrong.
Lets look at a few numbers from annual &H1 report. Receivables. $11.02 M now look at profitable companies. This number is usually 45 to 90 days revenue here it is less than 20 days. What does that say to you? It grew allot this H but it still needs to increase more using cash. The deals to keep this low cost money.
Payables 49.7M about one Q production cost. More than half of production is probably labor. So on average they are taking 180 days to pay. Amanda has told us how they have negotiated putting some big bills off more than 180 days and this is good. But sooner or later they have to become current on their bills that will use lots of cash. They are in a mode similar to paying off balance on one credit card with another. You are not in default but sooner or later it has to be paid. Also note that at end of ‘16 (Note 21) current liabilities were 32.77M. h1 (Note 15) current liabilities 48.37M A 50% jump in what is owed in 6 months!!! The true magnitude of this problem was hid if you did not look at notes. There was a 10M + decrease in non-current payables because of refinance. That hid much of this problem, unless you dug deep. Note current means due in less than 12 months.
Question how many times have you said an investment would have been good if only X had not happened. Or no one could have seen that coming. Every investment I have had, that lost money, was a mistake I made. If something caught me by surprise it was because I did not look carefully. Even DOT COM (Which I saw clearly, made lots) and Banking ( saw it but only did half of what I should have, loss a little) could be seen in advance and there were plenty of warnings for those that were looking.
AL has a legal obligations to present the company in the best possible light. She has done this very well, I have never seen a Lie. Every investor has an obligation to themselves to dig deeper and look for major problems. Then balance these two sets of facts and decide if the risk justifies the reward for them. Every company including the DOW 30 has major good and bad points. If you do not see any negatives you are not looking. Invest more when good things increase and bad decrease. Get out as fast as possible when you see opisit. If you are wrong you can always get back in. Avoid loss at all cost. I invested in Lynas in the fall. I saw the refinance as very good. I saw prices rising. As more and more details came out about refi (and I looked deeper) it did not look nearly as good. It is still OK but AL gave allot away to Mt K that will hurt stockholders. Then RE Prices went flat. I got out. CY and DF stock prices went up 50% after I sold. Today they are less than 1 cent above my sell price. I do not regret it at all. The recent very low volume says if I still had shares and wanted to sell I would drive price down more than a cent.
I most certainly like the sales figures. I like ASP going up. (is it sustainable without higher NdPr prices?) I like production cost going down but again wonder about sustainability. I am guilty of only saying negatives is true. But this is because there are so many posters on this board that say everything is fine. Which they are not. Jare will make sure they do not go out of business. Profitability is something else. Jare Let Mt K get a very sweet deal instead of just buying them out. At most this would have cost them US$225M Who knows if they played hardball maybe allot less. For me this puts a limit on how far JARE will go. In bankruptcy Mt K got nothing, there was a big stick available. JARE and AL chose to use a carrot.
Like always the real issue is RE prices over the LONG TERM. They are still down from a year ago. Good solid long term price rises make it all just fine, I still do not see this. Please note the chart page 3 of Q2 17 activities report. In spite of rise in October and November ND Pr is down 7% in a year 8% in 6 months. All I see on this board is look how much prices are going up! In last week Nd Pr has gone up nicely. Maybe we will start a trend. But it will take allot more sustained NdPr price growth to give Lynas what it needs to even stop loses never-mind make a penny.
Forget spot prices. Forget daily and weekly price changes. We need steady, predictable long term price increases. That’s why I only update my charts once a week and always look at least 18 months for patterns.
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A friendly reminder of ContraryJ's recent "projections" and "analysis."
He has consistently been wrong EVERY quarter since he started posting. His MO is to distort information and make people question Lynas' prospects.
ContraryJ is the only poster who consistently tries to spread FALSE information on an almost daily basis.
Let's review:
He repeatedly stated that Lynas would go bankrupt.
Lynas didn't go bankrupt.
He repeatedly stated that Lynas stockholders would get wiped out.
Stockholders didn't get wiped out. In fact, some have made some nice return on investment no thanks to him.
He stated that after the Mt. Kellett deal, Lynas shareholders would be lucky to get ONE PENNY a share.
He said that Lynas would be cash flow negative Q2.
Lynas has $5 million as of Q2 report.
Why on earth would anyone take what he posts seriously?
More words of wisdom from ContraryJ:
https://hotcopper.com.au/threads/h1-details.3264791/?post_id=22994186#.WMGXq9m9Kc1
"Chinese’s have to be upset with low prices yet nothing happens to prices except continued slow long term decline."
https://hotcopper.com.au/threads/first-feed-to-kiln.3185162/page-13?post_id=22443038#.WKeUGNm9Kc0
"Unfortunately the nice price increases we saw early (2017) Q2 did not seem to have any momentum."
Northern Rare Earth Group increased their price for NdPr, La and Ce 6% (and just increased NdPr prices this month again). And they continue to climb.
https://hotcopper.com.au/threads/first-feed-to-kiln.3185162/page-4?post_id=22377803#.WKeYENm9Kc0
Right after 2017 Q2 report:
"How much equity do you really think there is if the plant is sold in a liquidation sale."
https://hotcopper.com.au/threads/q2-thoughts.3183620/?post_id=22128722#.WKeZJ9m9Kc0
"Congratulations on the first unqualified positive cash flow. Cash Q to Q went up, $0.843M. Can we expect it to go up next Q (2017 Q3)? Highly unlikely."
A reminder of ContraryJ's Greatest Hits:
https://hotcopper.com.au/threads/q2-thoughts.3183620/?post_id=22128722
"The Q report is much better than I expected. Wish I had held off selling"
https://hotcopper.com.au/threads/pro-one-for-cj.3159446/page-5?post_id=21868133
"Would you agree there is not even a trace amount of Pr in high performance Magnets."
https://hotcopper.com.au/threads/decreased-holdings.3177290/?post_id=22054958#.WIOjBtm9Kc0
"I expect a small decrease in total cash this Q (2017 Q2)... The combination of higher energy prices and CE flat La a up slightly and NdPr down slightly in last 7 to 9 weeks. REE prices will cause a steady decrease in cash."
http://hotcopper.com.au/threads/asi...3053084/page-12?post_id=20733407#.WDBe6dm9Kc0
"(2017) Q2 will be so so. Maybe negative total cash flow"
https://hotcopper.com.au/threads/qu...3089672/page-12?post_id=21133484#.WIaudtm9Kc0
"I assume there is more SEG. I doubt they can sell most of it. I do believe that there is limited open SEG processing available. That is why it is hard to sell."
https://hotcopper.com.au/threads/asian-metal-prices.3074438/page-11?post_id=21013874#.WIaxudm9Kc0
"It is my opinion that total cash will be down (2017) Q1 to Q2."
https://hotcopper.com.au/threads/la...2914310/page-72?post_id=19463024#.WM1r9dm9Kc1
"Take the company private. This flushes all minor debt and all the stock holders."
To add to your previous predictions:
https://hotcopper.com.au/threads/i-missed-big-time.2931056/?post_id=19503956#.WD93RtQrLDc
"I missed BIG TIME"
"Loses were not nearly as bad as I thought. Loss was 34M I predicted. $60M"
"On Stock holders equity I seem to have missed worse. Equity is now $71M 34 M of that was the streanthening of the AU$ against the US $ After this Equity was down to AU $35 M still much larger than my predicted. 10M."
https://hotcopper.com.au/threads/capital-raising.2931335/page-108?post_id=19723733#.WEzLbtQrLDc
"When the (Mt. Kellett deal) vote comes you will have two choices. Vote yes and MAYBE get a penny a share and Lynas keeps running. Vote no shut them down and get nothing