Tuesday, August 22, 2017

Altius Minerals (ALS.T) to report record royalty revenue

Altius Minerals:

Altius Minerals Corp. will release financial results for its first quarter ended July 31, 2017, on Thursday, Sept. 14, after the close of market. Altius expects to report attributable royalty revenue1 of approximately $14.8 million for the first quarter ended July 31, 2017. This represents a new quarterly royalty record that is 10.4% higher than the immediately prior fiscal quarter and is 78% higher than the comparable quarter of the prior fiscal year. The increases are largely due to improving base metal, metallurgical coal and iron ore prices and slightly improved potash production volumes and prices.


The company also restarted buying back stock as the management believes the company is undervalued.

The market likes the recent news:


I would like to see the stock break above the $13 level and I think it could go on a run. If they keep reporting these kind of results money will flow into the stock.

Bank of Cyprus to accelerate bad loan reduction

Famagusta:

The Bank of Cyprus Group has announced a deliberate additional change to the way it provides against delinquent loans on its balance sheet, which will result in the Group allocating an additional €500 mn of its capital - through making additional provisions- against these risks. 

In an explanatory press release, the Bank says that this additional provisioning, as a result of the Group’s strategy to better explore other innovative strategic solutions to further accelerate balance sheet de-risking, will also help the Group draw a line under its discussions with the European Central Bank on the levels of provisioning that the ECB expects to see against such non-performing loans. 

(snip)

The Group says it continues to make steady progress in its journey back to full strength. Capital levels remain adequate, deposit levels are stable and now more than fully fund the loan book and non-performing loan balances have declined steadily over the past nine quarters and provision coverage levels against non-performing loans have steadily risen each quarter.

‘The operating performance of the Group is reasonable and an essential modernisation programme is underway. Management remains entirely focused on completing this journey and recognises that there is more to do before the repair can be declared complete’ it is added.

Dealing with the non-performing loans is the key for me as an investor and is the main factor holding back the bank's proftiablity. If you read the statement in its entirety you will note that the bank continues to progress towards normalization and is providing credit to worthy borrowers in Cyprus.

Permian basin could have "infinite" supply of oil. Adding Occidental Petroleum (OXY) to portfolio


Forbes:

(snip)

We should view the Permian Basin as a permanent resource," he says, "The Permian is best viewed as a near infinite resource - we will never produce the last drop of economic oil from the Basin."

No one disputes that the resource in the Permian is huge, but 'infinite' is a big word.  I asked him to expand on that concept.  "That is the practical reality with the amount of resource that is in the ground," he says, "The research we've done indicates that we have at least half a trillion barrels in the Permian at reasonable economics, and it could be as high as 2 trillion barrels.  That is, as a practical matter, an infinite amount of resource, and it is something that has huge geopolitical consequence for the United States, in a very good way.  It has a huge consequence in terms of GDP, and right now it is creating an American energy global ascendancy."

It is curious that over time we have been told we constantly running out of resources like oil but we never do.

I think what is meant by a permanent resource is that we will transition away from using oil as a primary transportation fuel well before we produce the last economic barrel.

Anyway, I have been looking at OXY for a while anyway and recently read another article that discussed how the new CEO has streamlined the company and refocused on the Permian basin, petrochemicals, and the mid stream operations.

In addition, OXY has initiated oil exports from the former Ingleside, naval base in south Texas.

not much to discuss except they control a million acres in the Permian, low cost producer, dividend is around 5-6%, and the CEO has said she wants to increase cashflow protect the dividend and grow the share price.

Oil is out of favor currently but it is a commodity and goes through cycles. I think we are closer to the bottom so I am taking a position.

Sunday, August 20, 2017

Romania economy expands at 5.9% rate

Emerging Europe:

In Q2 2017, the Romanian economy expanded by 5.9 per cent, compared to the same period in 2016, according to a preliminary estimate by the National Institute of Statistics (INS). The figure marked an acceleration from Q1’s 5.7 per cent expansion and vastly overshot the market’s expectations of a slowdown to 4.8 per cent. 

“ We don’t have a detailed breakdown of Q2 GDP growth yet, but based on releases of various economic indicators for the quarter, we think that the industrial and the services’ sector has continued to prop up growth in the most significant way,” Horia Braun Erdei, chief economist and head of research at Banca Comercială Română (BCR), tells Emerging Europe. 

All of Eastern Europe is showing economic growth far superior to Western Europe. I continue to hold shares in Romanian closed end fund Fondul Proprietatea. The shares continue to sell at a discount of 28%. The managers continue to buy back shares as a way to close the discount.

Friday, August 18, 2017

Commodities cheapest in 50 years when compared to the S&P 500


Good thing I am long various commodity investments. I see a mean reversion coming.

Thursday, August 17, 2017

Canacol Energy (CNNEF) second quarter progress review

Seeking Alpha:

(snip)

From the above review and analysis of 2Q 2017 operational and financial results, Canacol has clearly outperformed our expectation. In all five aspects, from growth runway via exploration, infrastructure, and production and profitability, to financial conservativeness, the company delivered what it said that it would achieve and a bit more. In fact, one may feel a little bored by its consistent outperformance in recent quarters.

In fact, we would not blame an investor if he feels a little bored with this company. The uneventfulness is more of the management's design than by chance. In an under-supplied natural gas market, the company secured essentially high yet fixed gas price of approximately $5/Mcf through long-term take-or-pay contracts, which pretty much removes the commodity price risk. Then, as for operational risk - whether it can execute its business plan and deliver the contracted volume of natural gas, the company acquired five highly prospective gas-prone blocks, which have been conducive to low-F&D-cost successes in exploration, which results in rapid reserve growth, which in turn makes it possible to effortlessly expand production. 

As production doubles into an under supplied gas market in Northern Coastal Colombia Canacol cashflow should swell. I continue to hold.

Wednesday, August 16, 2017

Zinc at highest price in ten years, other industrial metals also up

Reuters:

Zinc prices surged to their highest in almost a decade on Wednesday while aluminium and copper hit their highest since 2014 as rises across most industrial metals triggered pre-set buy orders and a wave of speculative buying.

"Momentum funds are buying the strength, piling in as the price rises," said a metals trader in London. Forward selling by producers keen to lock in a high price was limiting gains, he said.

(snip)

Supporting prices was a fall in on-warrant zinc available to the market at LME-registered warehouses of 5,500 tonnes, to 149,700 tonnes. Headline zinc stocks have tumbled 41 percent this year.

Commodities normally rally late in an economic cycle. We are seeing this happen now. The question is how high do they go before the central banks, which are draining liquidity out of the market, really step on the brakes.


Retail Holdings (RHDGF) reports increased first half earnings

Seeking Alpha:

(snip)

Consolidated revenue from continuing operations for the first six months of 2017 was up 10.2% from prior year, to $256.2 million, a record for this group of companies.

All of the Company's operations reported revenue growth, with revenue in local currency increasing 26.0% in Singer Bangladesh, 4.8% in Singer India, and 13.5% in Singer Sri Lanka.

(snip)

Evidence suggests that both Singer Sri Lanka and Singer India gained market share during the first half of 2017, as competitors were less able to meet these challenges than were the Company's operations.  I believe that both Singer Sri Lanka and Singer India will show much improved results in the second half of 2017 as the recent initiatives to boost revenue, improve margins, reduce S&A expense and shrink the balance sheet, bear fruit.  Singer Bangladesh should continue to report strong results. 

"The Company continued to make strong progress in its strategic program to monetarize the underlying value of the Company's assets. Additional shares were sold in the public markets during the first half of 2017 for Singer Bangladesh, Singer India, and Singer Sri Lanka. I anticipate further placements in these markets in the second half of 2017.

"Retail Holdings paid a distribution of $2.00 per Share to Shareholders of record on May 5, 2017; a further distribution of $1.00 per Share will be paid to Shareholders of record on November 17, 2017. This bring the total distributions paid to Shareholders since inception of the program in 2007 to $18.75. The Company anticipates making further distributions in 2018 and later years.

So this is performing just as hoped. Management will continue to liquidate the underlying holdings and distribute to shareholders. The kicker is the underlying holdings continue to perform well and could gain value which would be a nice bonus for shareholders. 

Tuesday, August 15, 2017

Mongolia economy expands at 5.3%

Reuters:

Mongolia's economic growth accelerated sharply in the first half of 2017, the government said, helped by a revived coal market and a bailout package led by the International Monetary Fund.

The country's gross domestic product (GDP) expanded 5.3 percent from a year earlier, to 12.8 trillion tugrik ($5.26 billion), the National Statistics Office said on Tuesday.

Events are lining up for the Mongolia economy to recover after five years of recession. Copper prices are increasing, coal prices are up and China is increasing imports of Mongolian coal.

Hopefully the Mongolian government will not screw it up.

Cyprus second quarter growth up 3.5%

Famagusta:

Cyprus’ GDP grew by 3.6% in real terms during the second quarter of 2017, compared to the corresponding quarter of 2016. According to a Flash Estimate by the Statistical Service, the GDP growth rate in real terms is estimated at 3.5% based on seasonally and working day adjusted data.

Finance Minister Harris Georgiades says the results reflect "the economy’s strong growth” and notes in a written statement that for yet another quarter, growth is detected in all productive sectors. Public finances remain "under control”, he adds. 

Cant be bad for my investment in Bank of Cyprus. Increased growth will lead to quicker resolution of non-performing loans.


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