What is a fair price for implats

[#1]

Did a quick desktop analysis on IMP over the weekend. 2009 saw earnings per share of 1001 cps with an average platinum price over the year of about R970 an ounce. So far, for the 120 days since december, average price has been around R117 per ounce. A simple calculation assumes that their topline will grow by the corresponding % increase in the price (assuming volumes remain constant) and that costs will stay in line. With a 15* PE, that would put their shareprice at around R220, with a projected eps of 1460 cps. So, IMP's price is not out of line at the moment - and is probably trading at the bottom end of its channel. So, assuming the following 1) Cost increases can be offset by increased production 2) Platinum doesn't fall below the R1170 per ounce level 3)Investors will still be willing to risk 15 times forward price earnings, then IMP is looking pretty cheap.At R160 it will be really really cheap, and I will climb in big time for the long term.

[john_1]

The only question is...what is the contract price... much of their production is not sold at spot price so that may mean a significant reduction in their ave price.. same for amplats..

[#3]

Skaap, I agree that should we hold these levels we could see a really good longer (med) term investment. However John has a really good point as well. I will see if I can get hold of IMP to see what the contract price is for plat at the moment and what term they are over. That will give us a better understanding. Does anyone maybe know what the price is? Barry you have a keen eye in the "on-the-ground" perspective?

[#4]

guys just watch the dollar platinum price, cos most of the hype in emerging markets have forced alot of cheap dollars into commodities, hence platinum looks over bought and is reflected in the ams and imp price already, when doing your analysis always rememeber that the peak price may not be the true value price , so dont look at a drop as getting to fair value, fair value may be much much lower than we think it is, esp if the u.s decides to sell heavy its commodities in platinum, like we seeing in oil, cos its all a growth story.. dow drops, platinum gets smacked very hard. only commodity that survives a dow jones sell off is gold, so dont always look at platinum and gold in the same light.

[HateGauteng]

Cuzzie is that you?

[barry_1]

John is correct about the platinum sold by contract.In the past this was around 80% and the market platinum price has very little bearing on the costs and profits.Sure when the plat price falls the share price follows to some degree as derivitive traders never delve very deeply into the workings of a mine and do most of their trades on asumptions.This is likely to change as the Platinum mines start to pay massive dividends again. IMP and AMS like to keep a secret how much they sell forward and for what length of time ,usually using the lame excuse that the buyers don't want these facts known.Truth be known the contract prices are not very demanding.The Japanese are especially adept at getting good deals.It would be difficult to average this price ,how ever some friends of mine say that the contract prices are at the moment about one third less than the spot price.

[#7]

Barry you right, I tried calling the company secretary a IMP and was told they dont disclose that info. I then tried calling general reception and asked who I could talk to about the matter and they put me through to one of those corporate screener's (pre-MD/CEO/Management team). So I was told they would leave a message and someone would get back to me. I somehow doubt it??? So we are left to our own thoughts in this one.

[john_1]

really okes do I need to teach you everything.. phone them tell them you are the agent for a chinese firm interested in buying x amount of plat every month for the next five years.. for the car market.. then ask what the price is... go dirrect to the sales chop!

[john_1]

If you want a long term value play by Serdel...its trading at 30c and its property portfolio is about 5 times that alone..its one of the largets employers and its losing money.. so it only a matter of time before they shut up for good and turn toward the properties for re-development etc..