Cycle Bottom Profile picture
Aug 15 4 tweets 1 min read
Investing at cycle lows proves it's weight in gold....
Characteristics of cycle lows:

a) 90-95% declines from 2 year peaks

b) very attractive low valuations 2 years out, post moving beyond the eye of the storm

c) extremely negative sentiment with much fear

The easy entry points to secure great forward returns.

#investing101
Investing Behaviour that will truly generate sub standard returns over the medium :

A) FOMO resulting in 4th quartile cycle purchases

B) No understanding of cycle positioning

C) Entry without Exit pricing

D) Moving with the herd, instead of being infront of the herd
Investing Behaviour that will create excess returns over the medium term:

1) Avoid FOMO

2) Be early to a cycle

3) Exit price consideration is more important than entry

4) The Herds arrival is a signal of a maturing cycle, be a step or 2 ahead

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More from @BULLReturns

Aug 15
$AHQ 3x returns over 12 months from recent lows, 6x assuming lower stupid dilution. The key is to evaluation opportunities in the eye of the storm....4 potential mines with combined NPV of $2bn and 1bn/t of resource, low capex start ups.

#coal
We will ride $CKA through 40c, if $AHQ continues to trade below 11.5c then a sector switch will look attractive.
Evaluating an investment in the eye of the storm: $AHQ

A) will the assets perform to specs within 24 months? Yes

B) how bad will the dilution be, will the valuation still be discounted materially post dilution? Yes

C) will non dilutive forms of financing be available? Yes

1/2
Read 4 tweets
Aug 15
Every time there is a new #uranium PFS or DFS come out we compare across the spectrum of projects looking for the best value at the lowest EV. Its still hard to beat 48mlbs recoverable, sub $30 AISC, 4-5mlb annual capacity trading on an EV < US$70m. Overpaying will reduce returns
ISR capex doesn't look so great when treated from a holistic approach
Rules of thumb for returns #uranium

<US$100m cap with NPV $0.6-1bn (AISC < $35)= 5-25x returns

$200-400m cap with NPV $0.6-1bn= 1-4x returns

Bonus tailwinds for the <$100m caps
- ETF entry
- low broker exposure to moderate
- no research to moderate
- low fintwit to high
Read 5 tweets
Jul 30
#uranium potential acquisition target list over the next 12-24 months:

African targets: $EL8 $FSY $AEE

US targets: $WSTRF $AEC

Mixed jurisdiction target: $LAM

Acquirers: Chinese players, $EU $DNN $UEC $DYL
The #uranium acquisition matrix, accretive equations

At $40-65 spot:

Acquirers trading > $4+/lb and/or peak CF to EV >3x

Acquirees pricing <$3lb and/or peak CF to EV <2x

Peak cycle valuation ranges $5-13/lb and/or peak CF to EV 7-11x = targets add 3-5x upside initial price
The buy Vs build decision #uranium

Caps above $400m generally will be the acquirers of the sub $300m targets sitting on low relative valuation in the $40-65 spot phase of the cycle.

Acquirers buying a <$2lb valuation with superior project matrix when they are trading >$5 =
Read 10 tweets
Jul 18
What secondary listing #uranium stock is trading at a 98% to it's primary listing? Or a 97% discount to the current capital raising?

This Arb doesn't come around every day, infact only near bear market bottoms. $500 put to work in such a stock could be worth $30k in 36 months.
A clue and a question: what brokers allow purchases of US pink sheet stocks currently?

#uranium
In peak #uranium markets we predict this pink sheet price could so 370x from its last price, 60x with $500 deployed, 30x with $1000 deployed over 36 months. Can you be the 1st in and do the sitting required, for this opportunity?
Read 7 tweets
Jul 7
#coal: could coking spot move below thermal given a recessionary slow down in steel production, yet power generation deficit due to Russian sanctions? Creating elevated #metcoal prices for longer? Providing a boost to 2023 margins for the new undervalued start ups...
$CKA $AHQ
The 2023 economics:

1m/t production @ US$100-150 cash margin = A$140-200m CF

1.5m/t @ US$100-150 = A$200-300m CF

Valuation multiples of 1-1.5x cashflow, assuming material stock buy backs = re-rate to 2.5-3.5x is very possible.

$CKA $AHQ
Self funding #coal takeover bids? As cashflow run rates imply less than 2x cashflow valuations, or 50% cashflow yields, wouldn't it be attractive to announce a bid at say 25-30% yield? $CKA has had at least 2 bids in the past, insiders own around 50%, don't be surprised in a 3rd.
Read 5 tweets
Jul 6
We commenced nibbling yesterday in a sector down 90-95% that could see it's 2025 pricing be 100% higher than 2021 equating to 20x returns and higher.

DYOR, it a great time to make the right decisions for 2023-2025 stellar returns.
The new theme we have been deploying to is Bitcoin miners....

5x volumes @ 5x price coupled with rerating = > 20x returns
New fresh Asymmetric trade: 20x returns Vs 35% downside over the next 36-48 months

#bitcoin miners
Read 6 tweets

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