Recent selling by founders might not augur well, page-5

First 5 Last

Share
Profile

Follow
sabine

19,077 Posts.

4014

04/09/18

13:50

Post #: 35403422
Share

Originally posted by usagi44 ↑

I’ve turned bearish on MLD after posting favorably on the stock before and after the results announcement.

Since the IPO in Nov 2010, a number of founding shareholders appear to have either sold out completely or sold down to somewhere below “major shareholder” status. Other founders, while remaining “major shareholders“ with stakes of over 5%, have gradually trimmed their holdings.

To be sure, much of the selling is ancient history and a somewhat inevitable part of insiders cashing out as they take a company public. Issuance of new shares in the two years through FY6/15 also significantly diluted the percentage shareholdings of the founders. However, recent MLD filings show the three remaining founders again trimmed their holdings on or around 29 August, just after the FY6/16 results announcement on 23 August. This latest round of selling dashes any sense that insiders might have stopped heading for the exits. The filings show the insiders sold for $1.57/share on or around 29 Aug to a range of (undisclosed) institutional investors. Selling by one insider might not be cause for concern, but three at once?

Some new names have appeared on the register over the past 18 months. Paradice Investment Management is now a major shareholder. Kenneth Kamon –a major shareholder (9% stake) in rival mining services outfit Mastermyne Group (MYE) – popped up with a 7.4% stake at the end of 2015. Who is he? Will he do good or evil, or nothing at all?

MLD is trading on PERs of 14x and 9x based on FY6/17 and FY6/18 consensus forecasts and grossed-up dividend yields of 7% and 11%, respectively. Of course, with only two analysts covering the stock, one of whom hails from Hartleys (corporate adviser to MLD, and which arranged at least one of the aforementioned founder sales to institutions), the forecasts need to be taken with the usual pinch of salt.

I like MLD for its exposure to the gold sector (it will almost certainly rally hard if the gold price moves higher). I also like the dividend and strong-ish balance sheet, the reasonably cheap valuations and the presence of some reputable names on the share register like Paradice. But the latest round of insider selling begs the question: What is it about MLD that the founders don’t seem to want to stick around despite the valuations? And if they don’t want to hold, why should I? There seem to be a lot of positives, and I may well be over-reacting to my own somewhat selective research, but for now I’ve chosen to be out of this one than in.

View attachment 253670

Expand

NB I am bumping this post from 2016 because it gives background to Maca ownership. Company (I think) is currently about 88% owned by the top 50 shareholders.
Thank you for putting the research into this @usagi44
Cheers

Last edited by sabine: 04/09/18

MLD Price at posting: $1.30 Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

CUF

CuFe sells its Crossroads gold royalty to Northern Star for $4M cash; says better than waiting for mine launch

BTH

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

3DA

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

IRX

InhaleRX gains approval for clinical trial to test non-opioid therapy for cancer pain

EEG

NT Gov't delivers environmental approval for Empire Energy's Beetaloo Carpentaria pilot gas play

Week 46 Wrap: Copper hits 2mth low as Trump threatens net zero pace; US rally fades; HotCopper’s picks

CLE

Cyclone signs MOU with Vale for development of Iron Bear play

HotCopper Highlights: Your most watched stocks for Week 46, 2024

BNL

Blue Star Helium sees approval for five more wells at 'Galactica/Pegasus' project in Colorado

GDM

Banshee's historic trenches prove rich in antimony and gold for GDM

First 5 Last

Add MLD (ASX) to my watchlist

Recent selling by founders might not augur well, page-5

Top Stories

CuFe sells its Crossroads gold royalty to Northern Star for $4M cash; says better than waiting for mine launch

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

InhaleRX gains approval for clinical trial to test non-opioid therapy for cancer pain

NT Gov't delivers environmental approval for Empire Energy's Beetaloo Carpentaria pilot gas play

Week 46 Wrap: Copper hits 2mth low as Trump threatens net zero pace; US rally fades; HotCopper’s picks

Cyclone signs MOU with Vale for development of Iron Bear play

HotCopper Highlights: Your most watched stocks for Week 46, 2024

Blue Star Helium sees approval for five more wells at 'Galactica/Pegasus' project in Colorado

Banshee's historic trenches prove rich in antimony and gold for GDM

Featured News