Straws are discrete research notes that relate to a particular aspect of the company. Grouped under #hashtags, they are ranked by votes.
A good Straw offers a clear and concise perspective on the company and its prospects.
Please visit the forums tab for general discussion.
Key takeaways:
Revenue: $757 M (down 65% on PCP)
Profit: $213 M (down 82% on PCP)
EPS: 7.25 cents (down 82% on PCP)
Trading on forward PER of around 25......................
Current share price includes a premium for a recovery in Spodumene prices........
From the Australian ...
Only Wodgina and Greenbushes are profitable at the current spot price
Pilgangoora is above the cost curve and appears this is what is driving the shorts.
From money of mine podcast.
https://www.youtube.com/@MoneyofMine
AustralianSuper builds stake in lithium miner Pilbara Minerals
Australia’s largest pension fund on Thursday emerged as a 5.1% stakeholder in Pilbara Minerals after snapping up shares now worth A$558 million ($371 million) at a time of heightened interest in the country’s lithium miners
The only shareholder with a larger stake in Pilbara Minerals is a subsidiary of Ganfeng Lithium Group, which owns 5.7%, according to LSEG data
A stock exchange filing, required as AustralianSuper‘s stake now makes it a “substantial shareholder”, showed the A$300 billion fund had built its position since July, picking up more shares in September and October as Pilbara‘s share price dropped
Lithium stocks have been battered as prices for hard rock lithium, or spodumene, have slumped 70% over the past year. Pilbara Minerals is the most shorted stock on the Australian Stock Exchange, ASX data shows, which has sent its shares down 21% over the past year
However, buyers are betting the plunge in lithium prices will be short-lived as supply shortages for battery makers reemerge
AustralianSuper declined to comment
The pension giant has become a more activist investor, leading opposition to a high-profile $10.6 billion bid for Australia’s top power retailer Origin Energy
Its move into Pilbara Minerals comes at the same time as mining magnates have snapped up stakes in takeover battles for some of Pilbara‘s rivals
Gina Rinehart, Australia’s richest person, spoiled Albemarle’s ALB.N A$6.6 billion bid for Liontown Resources LTR.AX
Pilbara‘s shares closed 2.3% higher on Thursday
PLS's short-sell percentage, that is the proportion of its free float that is short sold, which has risen above 20% for the first time. If there is any good news whatsoever, there will be some short covering on this one that could quickly escalate.
Production relatively flat @ 144.2 kT
Sales up 6%
Revenue down 42% on prior quarter, as Lithium Hydroxide prices collapse.
Realised price per Tonne down 31% on prior quarter.
Looks to be trading on a forward PER of 15, assuming they maintain current realised price. The problem is Spodumene prices have fallen a further 20% over the past month.
IMO, there appears to be more downside than upside at present.
Estimated NTA as at December 31: $2.9 BN ($0.94/share)
Gross margins sitting at around 60%.
Offtake prices have collapsed and are presently $2240 USD per tonne of Spodumene
Predictions for commodity prices are impossible to make, but assuming this is a new normal, and a PER of around 11, I come up with $2.90
Now voting power: 6.19%
Guess JP Morgan & affiliates are shorting PLS.
PLS most shorted stock on the ASX
How Will Pilbara Minerals Spend Their $3.3B? With CEO Dale Henderson | Daily Mining Show - YouTube
Aug 4, 2023: "Money of Mine has delivered another great interview for the Money Miners today with none other than Pilbara Minerals CEO Dale Henderson."
"We visited the Pilgangoora operations and got the chance to sit down with the boss and grill him on how they’ll spending their big pile of cash, building an enduring business and his take on how hard it will be for competitors to bring lithium production online."
"We also ran through Trav’s Top Tweets, with as always, some hilarious content."
"Next week we’ll be at Diggers and Dealers in Kalgoorlie, so if you’re around town, come to De Bernales where we’ll be set up and tell us what you’re hearing on the decline!"
All Money of Mine episodes are for informational purposes only and may contain forward-looking statements that may not eventuate. The co-hosts are not financial advisers and any views expressed are their opinion only. Please do your own research before making any investment decision or alternatively seek advice from a registered financial professional.
0:00 Preview
0:24 Intro
3:11 Our Thoughts on Pilbara Minerals site Pilgangoora
8:43 Interview with Pilbara Minerals CEO Dale Henderson
21:20 Trav’s Top Tweets
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Disclosure: I found this interview really interesting - however I do not own any PLS shares at this point in time. They are certainly on my watchlist.
By the way, for those interested in lithium and how long it takes between declaring a Maiden Resource Estimate and actual production, which is quite a few years, and is longer for mines outside of Australia it seems, and the money value of time - or the "time value of money" as Trav put it - over these "time to production" periods - especially when production takes years longer to achieve than expected, the MoM podcast boys had an excellent discussion on this in their July 31st podcast (just over a week ago) which started off about the Maiden Resource estimate that had just been declared by Patriot Battery Metals (PMT.asx) but covered a number of other names as well - you could start here for just that discussion, or at the beginning if you want to listen to the whole podcast.
[I don't hold PMT either, but I do hold MIN whose founder and boss Chris Ellison was quoted by the boys in that podcast]
Tantalite production decreased in Q4 FY23 with 7,224 lbs produced relative to 8,575 lbs in Q3 FY23. For the full year FY23 period, the Group recorded 620.1k dmt of concentrate production, 64% higher than FY22 and at the top end of production guidance. The increase in production for the full year was driven by a combination of product grade strategy and improvements in productivity.
Share price reaction ; $4.95 up ~7% this arvo
supported by a $20mill Govt Grant . Executed April 2023
ASX +security code Security description PLS, ORDINARY FULLY PAID
Number of +securities to be quoted 168,678
Issue date 04/04/2023
Looks ok ..But the resource price must stand -up. ( Chart here )
below MIN vs the Li Carb' Price: ........the red -line incase yur colored blind"
So Li Carb chart to test the bottom of the price "pit" then bounce out / bottom out.
Market Cap ($M): 11,872
Return on invested capital: is good
Free cash flow: ablility to pay a fully franked dividend is ok
@west it gets better…the sell rating with an upgrade from 3.15 to 3.40 has now (allegedly) been changed to neutral and a new price target of 4.70. All in the space of a few days. Oh my, it’s a comedy show unless you are paying for advice then, you wouldn’t know what to think.
Alex Gluyas
Share post
UBS has upgraded its lithium price forecasts and stock valuations, noting that the battery metal will remain in a physical deficit for the near and medium term.
The broker refreshed its outlook following China’s rapid reopening and growing expectations for a sales rebound post Chinese New Year.
“We believe lithium markets will remain in deficit for the near and medium term before moving to structural deficit long term,” Lachlan Shaw, analyst at UBS.
“This needs a demand rationing price, for which we have seen no evidence in the past 12 months despite record-high prices that are orders of magnitude above costs.”
UBS upgraded its spodumene/chemical prices by up to 50 per cent which led to earnings upgrades across its coverage.
The broker upgraded Pilbara Minerals to “neutral”, and Mineral Resources and IGO to “buy”. UBS maintained its “buy” rating on Allkem.
For those interested the Quarterly Investor Conference Call from PLS is below. It provides a nice summary of the present and future opportunities and challenges as the company sees them.
I think it’s worth a listen for holders, non-holders and those who may be considering a holding.
What I found interesting is listening to some of the questions raised by GS, UBS, JPM etc and comparing them to the questions Andrew raises in the Strawman Interviews. Obviously, it’s not a like for like comparison but, it’s just interesting to see the difference (ie what I see as a short term focus almost looking for a gotcha moment) in the questions from the larger investment houses v Andrew’s more people focused in depth review of the people running the show and what they are doing to grow and develop.
https://www.webcasts.com.au/13125/player/index.php?player_id=20349&skip_stats=1
Add the potential dividend (assume interim, full, interim) back to their 3.40 (12m) price target and you are already getting back to yesterdays price. So one could hedge their bets.
The UBS valuations are priced on catastrophic drops in Lithium. With Liontown announcing today an increase in construction costs developers could be under further cost pressures to get production going. Will UBS redo their PLS price prediction?
So while the producers clean up developers face upward cost pressures to start producing.
This reminds me so much of the FMG v investment bank battles during their growth. These investment - advisory companies are stuck in the days where they think Retail holders can not access news themselves.
At $3.40 assuming just last quarter results x 4 (and no dividend payout) PLS could have $6B in the bank!
So UBS would like their clients to think that PLS should then only be valued at 10B?
I am not good at forecasting so I am happy to run off the present data. I will leave the guess work to the large investment and advisory financial companies.
The day after PLS quarterly results - oh my! Smells of desperation needing to get this update out today.
Pilbara Quarterly trading update
I think this article is important because it highlights that the world when it comes to EVs and thus Li requirements is greater than just China and the USA. So when we are talking about EVs and lithium demand it’s important to not just rely on information that suggests potential slow down or uptakes in China or the US due to XXX. Let’s not forget China “makes and sells” not just for their own consumption but, the world!
https://europe.autonews.com/automakers/chinas-ev-exports-surge-record-european-demand
Pilbara director Miriam Stanborough bought on-market 18000 shares at $3.86 on Wednesday
PLS continue to clean up holding these auctions. When one considers the cash being delivered by this company and 1) it’s not at full capacity, 2) a majority of present earnings have been locked in at “significantly” lower earnings it’s valuation of 4.55 just does not add up.
I understand the “it’s a commodity stock” but just how many so called tech stocks earning no money, with the dream of a solution, and a fanciful unlimited TAM continue to bleed cash are priced “significantly higher” on a relative basis even after big pull backs.
Lithium isn’t going anywhere and PLS a “producer” earning a bucket load of cash is right in the mix. I can’t help but think we have seen this story played out again and again (think FMG).
Maybe it’s a mix of “it’s a commodity” or “the price of Li has to retreat” or “looking for the spec explorer rather than the actual producer to get the life changing multiple expansion” or the so called investment company reports released “referring to lower valuations” whilst they accumulate in the background (does this really happen - ha ha).
If one looks past the “noise” and analyses the “numbers” I can’t help but think PLS is a future BHP, RIO or FMG if it isn’t already.
Note: I hold iRL.
PLS 12th BMX Auction.
US$8,299/DMT
PLS Share price $$4.55
Participating interests in the JV will be 55% Pilbara Minerals and 45% Calix, with each party funding their share of operating and capital costs and Calix licensing their patented technology and calcination knowhow into the JV
Latest BMX auction results.
16/11/22 $7805 dmt
There has been a steady increase in price month on month
About a year ago, 26/10/21, the price was $2350
I’m sure this rate of increase is unsustainable but have no idea when it will slow or reverse.
Backs up yesterday’s announcement to start paying dividends from FCF, 20-30% payout from a cash balance of 1.375b
Held
"Battery Material Exchange" equates to a price of ~US$7,708/dmt (SC6.0, CIF China basis).
Above: YTD Growth returns (Chart shows the NHC coal ahead - but will unwind when a dark swan swims in)
Above: 5yr Growth returns
qualified buyers with a total of 22 bids received online during the 30-minute auction window. equates to a price of ~US$7,708/dmt (SC6.0, CIF China basis).
Thought I'd post here instead of CXO as PLS is a current producer
Wonder if demand destruction for EVs could be on the horizon? And how much of the EV hype is driven by the current Biden administration and other western govs round the world. I usually don't pay much attention to Zerohedge but this is a good article.
Lithium prices hit new record as EV affordability concerns mount
$1.2 Bill Revenue plus 577% , $814.5Mill EBITDA, $561.8Mill NPAT
That is it dig up the dirt and ship it around and you get paid,
PowerPoint Presentation (markitdigital.com)