Revenues down by 100%, EBITDA up by 27%. Now what do those two figures tell you? It tells me that Merafe is plagued by fixed costs. I mean, I would have expected some sort of pullback on the EBITDA at least - in a downturn. The only sligtly positive news is that they managed to keep their cash in tact, but I can't help thinking this is some kind of accounting trick here - that there is a bit of borrowing from Peter to pay Paul. All in all, rubbish results that does not bode well for the future. Even if Ferrochrome prices increase, you have to factor in an increase in raw materials, since they couldn't possibly have kept ordering last year. So what is their breakeven now? I don't know what investors are getting all excited about??
See the "New Market Reality" post by richardw! I, personally am loving this! Buy any share on a rising 20 Stochastic, or buy if a mothballed mine is recommissioned, or buy if a smelter is switched on, or buy if a bank talks to the chinese - then there's a 80%+ plus chance that you'll make 15%-40% in the next 3 weeks. Just keep your finger on the sell trigger! I'm calling it: "G's if it moves club it" system. Will post to tinyurl soon...
Both of u make some valid points,but one must not be so biased to not take part in the madness.Yes i bought in on Monday and am doing well....That said i'm not one of those holders that blindly hold on ,come what may!....Just a few facts:- In the third quarter of 2008,ferro-chrome hit its highest point namely 205 cents per pound..in the first quarter of 2009 it fell to 79 cents..in the second quarter of 2009 it fell to 69 cents..Now its very shakily increased to 89cents in the present quater....MRF has a debt of R400 million which has to be serviced up to 2012 when it has to be payed.With two furnances going they are making a slight loss every month which will also have to be funded,Luckily they have almost R300 on hand for day to day running expenses.
Ja, but sorry Barry, armed with those Ferrochrome pricing stats of yours, and the fact they have burned R100m of their cash reserves, despite a R140m cash injection from selling off their inventory. Now they have ceded R90m to ABSA (whatever that means) and they have no more inventory to sell. Now what? My feeling is that they are going to burn at least another R200m of their cash reserves in the next half year.
No, Barry I was joking! I learned weeks ago (I'm sorry it took so long...) to just follow this crazy market! As a result got into MRF and several others based on vaguely positive SENS news and Technical Analysis 101 principles (mainly stochastics) - only stopped out on SOL and SIM but the rest are flying! Your fundamental analyses of mining-related stocks have proven very valuable over the last 6 months, but also seems one just needs to go-with-the-flow lately...
Platsak,on my watch list since 29/july/2009 All up as follows:- MRF +33.9%....MTX +21.1%....EPS +18%....Don't know why the "prepare to meet thy doom" crowd is making such a fuss as its easy to get out when the mood changes!
barry, I think you misunderstand my point. i got in as a value investor at 82c - because I saw this as a quality company. Now I have concerns and don't plan to hold the stock long term anymore. Doesn't mean I won't swing trade it