I just compared the top 20 shareholders from last year to today's report and noticed huge turnover amongst the custodians. Point to point, my rough estimates suggests that about 25% of volume over the past 12 months could be attributed to this selling and this only assumes one-way traffic. Having spoken to a few small cap fund managers recently, MLX was very widely held (albeit at low weights) and the missed production guidance, the failings of previous management, and scepticism over the reset plan basically has seen the stock dumped.
Similarly, another aspect that I've heard recently but don't know to what extent MLX has been impacted, there have been quite a few fund managers wind up or lose large mandates from industry funds this year. Could this possibly have caused more stock to be dumped? Who knows.
Besides Perennial, the buy side is very light on the register. Should Nifty start to deliver, should the brokers start upgrading price targets, fund managers will once again take notice. They know the story (unique tin production, very few copper producers) but will wait until catalysts emerge. Knowing these guys, they all tend to jump on board at the same time, which can help propel MLX quite rapidly. The MD mentioned last month that Nifty was 4-6 months away from really hitting its straps. Today, we got this little nugget at the end of the results announcement that no one here is discussing.
"As a team we are now deep into executing the Nifty Reset Plan. While not necessarily reflected in the financialresults, we have made significant progress in reducing costs, improving efficiency and resolving a number oflegacy issues.. Progress against the key activities in the Reset Plan is on track, including targeting theintroduction of new mining areas into the schedule to provide the basis for increasing output. Most importantly,geological drilling continues to highlight opportunities to extend the new mining areas and development ratesinto the new mining areas are above the targets established in the Plan.”
With the debt facility in place which reduces the risk of a cap raising in the short-term and the reset plan being on track, the catalysts are starting to emerge. I have no doubt another cap raising will be needed eventually to fund the nickel project and Rentails, but I hope the board does assess all options particularly if the SP hasn't rebounded sufficiently.
I had a plan to buy in today if we saw 15c but as this didn't transpire, I will wait to see what happens overnight in the US after two strong consecutive days before doing anything next week (as I type, the FTSE is up, but copper is down). I don't like to buy on up days for the market and/or the stock.
Off the top of my head, I can't think of any expected announcements this month besides possible drilling results. So outside of this, we would have to wait for the next quarterly for an update in 6-8 weeks which probably still won't indicate much by way of a turnaround on headline metrics. In my opinion, there is still plenty of time to enter this stock if you are considering MLX. My hope is that some time over this summer, we see an announcement confirming production has commenced its upward journey.
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