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Tag Archives: UTV Media

2014 – The Great Irish Share Valuation Project (Part II)

13 Thursday Feb 2014

Posted by Wexboy in Uncategorized

≈ 4 Comments

Tags

Circle Oil, Dalradian Resources, IFG Group, Irish shares, Irish Stock Exchange, Irish value investing, ISEQ, Merrion Pharmaceuticals, Ovoca Gold, portfolio performance, Prime Active Capital, REACT Energy, TGISVP, The Great Irish Share Valuation Project, UTV Media

Continued from here. As usual, I encourage you also click on the 2012 & 2013 links for each company, to add some valuable colour/background. Now, let’s jump right in:

Company:   Circle Oil

Prior Post(s):   2012 & 2013

Ticker:   COP:LN

Price:   GBP 20.625p

Look at Circle Oil’s latest interims, what’s not to like? Revenue up 20%, EBITDA up 34%, and cash generated from operations (after working capital changes) up 69%. And if you annualize net profit, Circle’s trading on a 6.6 P/E! But it’s not as simple as that… Focusing on a P/E ratio’s a rather pointless (& misleading) exercise when it comes to junior resource companies. [Well, most don’t have any ‘E’ anyway!] Even if they’re fortunate enough to be producers, they’re often melting ice-cubes – i.e. they’re exploiting a (sometimes rapidly) depleting reserve base. Basically, they haven’t diversified enough, spent enough, and/or mastered the art of reserve replacement. That’s how the majors play the game, of course – but for the juniors, it’s much more of a lucky (& lumpy) game. This is one of the main issues Circle faces right now.

[Well, two other big issues: i) About 27% of its shareholder base remains a potential stock over-hang – Libya Oil Holdings owns 18%, while Kaupthing Bank owns 9% – not surprisingly, both stakes are essentially ‘frozen’! And: ii) Investors are still leery of the fact a majority of Circle’s production is in Egypt. Maybe a little unfairly, as the company doesn’t appear to have suffered any disruption/interference to date. But it does suffer from another long-standing Egyptian problem…getting paid! Fortunately, the situation’s stabilized somewhat, but Circle continues to have more than 6 mths of trade receivables outstanding].

At the current production rate, Circle’s only got about 6-7 yrs of reserves left. That’s not something you can tag with a P/E ratio! And despite a $42 M pa exploration/capex spend, it hasn’t managed to put new reserves on the board recently. OK, I’m probably being a little harsh here – despite this spend, the company’s actually generating positive free cash flow. Far better than most junior resource companies out there…OK, we all know 9 out of 10 juniors are rubbish anyway! Because of this reserve depletion, and COP’s current (relatively small) market cap, I’ll continue to value it on an asset basis.

As of mid-2013, net 2P reserves were down to 16.3 M boe. No allocation between proved & probable is provided, so let’s assume a 50:50 split & my usual $10 & $5 per boe (respective) in-the-ground valuations. There’s $30.6 M of cash on hand, and let’s include net trade receivables of 20.2 M. [That’s being kind – Egyptian receivables will likely remain a semi-permanent & illiquid asset]. We then offset 11.6 M of bank debt, and a 30 M convertible loan. [This may ultimately become equity, but the share price continues to trade below the loan’s conversion prices]. That gives us:

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2013 – The Great Irish Share Valuation Project (Part V)

19 Tuesday Feb 2013

Posted by Wexboy in Uncategorized

≈ 6 Comments

Tags

Abbey plc, Better Capital, Big Pharma, CPL Resources, Gallaghers, Glanbia, ICON, Irish shares, Irish value investing, Jon Moulton, milk quotas, STV Group, TGISVP, The Great Irish Share Valuation Project, TVC Holdings, UTV Media

Continued from here. Let’s take the next batch:

Company:   ICON

Prior Post:   Here

Ticker:   ICLR:US

Price:   USD 28.43

ICON’s starting to fire on all cylinders again, as I correctly anticipated. Well, except for the share price…but I’m sure investors aren’t complaining! 😉 Last year, the company was squeezed between (virtually) zero growth in its existing contract revenues & the challenges/expenses of ramping up to meet some v large contract wins. Operating margins, even on a pre-exceptional basis, had fallen to near-zero – but valuing ICLR on that basis would clearly have been incorrect. It seemed reasonable to presume margins would return to 10%+ as new contract revenues/margins matured.

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2013 – The Great Irish Share Valuation Project (Part I)

14 Monday Jan 2013

Posted by Wexboy in Uncategorized

≈ 12 Comments

Tags

Aminex, Aryzta, Connemara Mining, Continental Farmers Group, Independent News & Media, Irish shares, Irish value investing, iShares MSCI Ireland ETF, Kenmare Resources, Kerry Group, TGISVP, The Great Irish Share Valuation Project, Tullow Oil, UTV Media

I finished my last post with a question: ‘So, shall we continue with this TGISVP experiment in 2013..?!‘

Despite the relative comment silence, an emphatic ‘Yes!‘ appears to be in order. The success of the series was evidenced by the strong surge in Q1-2012 page views, and the significant level of out-performance enjoyed by each of the TGISVP Alpha & Beta Portfolios last year. I’d first recommend a quick review of my first TGISVP post last year as a primer, but we need to cover some important points here:

– I’m planning to (briefly) review & set a price target for all Irish companies.

– An Irish company is any company which conducts a major portion of its business in Ireland, is (genuinely) headquartered in Ireland, and/or whose management/directors/shareholders/history are predominantly Irish.

– Sure, it would be marvelous if I covered all companies simultaneously. But life (& investing) are never so convenient… I reckon there’s about 70 companies to cover, so I’ll give myself an end-March completion deadline.

– This is TGISVP-Yr II, so perhaps this will all move along much quicker this year – who knows?! To add some spice, I plan to cover companies in random order this time ’round.

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The Great Irish Share Valuation Project V

22 Wednesday Feb 2012

Posted by Wexboy in Uncategorized

≈ 13 Comments

Tags

Better Capital, Dart Group, FL Partners, Irish Continental, Jon Moulton, Marketspreads, Paddy Power, Pageant Holdings, Petroneft Resources, Ryanair, Siteserv, Smurfit Kappa, TGISVP, Total Produce, Tullow Oil, TVC Holdings, United Drug, UTV Media, Worldspreads, Zamano

Continued from here:

Before tackling the next batch of stocks, some readers may want to revisit my first TGISVP post. This project’s not about doing a detailed writeup/valuation on each stock. Sure, I spend ample time on each stock (on a best efforts basis)**, but less than if I were making an investment and/or doing a detailed writeup. That’s why I label these rough and ready valuations! On average, yes I’d expect detailed and rough & ready valuations to be similar, but ‘average‘ is key here..! Take a closer look at any company, and my new valuation could be (possibly significantly) higher, lower or unchanged vs. my original valuation.

What this project is designed to do: i) Illustrate the wide variety of valuation assumptions/approaches that can be applied depending on each individual company/situation, and ii) provide a cheatsheet to highlight the potentially best (and worst!) Irish stocks, on an absolute (or relative) basis, that may merit further research and potential purchase/sale.

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