Cycle Bottom Profile picture
Nov 22 5 tweets 3 min read
Thought of the day: Locating a 50 bagger for 2023 entry through 2026 exit, likely characteristics, down 95%+ from 2021 peak, volume growth +2-3x, selling price price +1-2x through 2026. Examples: commodity micro cap, a tech turnaround, a crypto token, a REIT or durable goods cap.
#bitcoin miners bottom incoming:

#Bitcoin 12.5k = -30% from here = -93-98.5% = +7-15x

#Bitcoin 10k = -50% from here = -95-99% from peak = +10-20x

#Bitcoin 5k = -75% from here = -97-99.9% from peak = +15-30x

#Survivability test in play, liquidity runway requirements
#REITs & Durable goods (#USHomebuilders) bottoming likely 2H 2023, where 12 month balance sheet liquidity is under pressure due to frozen credit markets (inability to refinance = elevated default risk)

Very Tight credit conditions = -70% move from here

Frozen Credit = -90% move
#Commodity micro cap < $40m

Generally pre-production
Trading at <8% of NPV
Project IRR > 90%
Capex < 20% of NPV

1st Quartile commodity price moves to 4th Quartile
Volume growth optimization in line with NPV assumptions

= 20-70x
A potential example:

$AHQ based on the following assumptions: around 5c entry
A) optimizes 4 mines through 2026
B) combined capacity 5m/t at < $115/t cost
C) the coal price cycle bottoms in 2024 (around $150/t) and takes off to above $450/t met in 2026/27
D) low dilution

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Cycle Bottom

Cycle Bottom Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @BULLReturns

Nov 15
#Vietnam markets imploding due to excessive margin liquidations on top of excess corporate bond expiry in 2023 (in a period of frozen liquidity conditions). 3x Book valuations dropping to 0.2x have been compelling entry points in the past. We stepped into the Green stock.
The unique daily trading limits in #Vietnam are a 2 edged sword...they lock buyers out in an aggressive upswing and prevent sellers exiting on an aggressive drawdown. This creates excessive ranges in bull and bear markets - providing unique opportunities for those doing the...
#Vietnam Shopping list incoming:

<0.2x book = 10x returns over the next 5yrs
<95% from 18 months peaks

Balance sheet liquidity is sufficient to ride through 2023 frozen refinancing markets.
$TIG 2.3x trailing PE at the lows this morning, 50% net Liquid assets to cap, 0.43x bk
Read 7 tweets
Nov 11
Thought of the day: Fighting #commodity price tops will just result in 75% plus stockprice retracements, #cyclicality music always stops, grab a chair early to avoid serious regrets and portfolio destruction. Easy clue to follow, is 65-80% margins above cost curves are peakish.
Those #commodities that are currently near bottoming (0-20%) for the next up cycle 2H2023-2025....

#tin -65%
#ironore -66%
#nickel -60% (moving up)
#Lumber -72%
#zinc -40%
#HRCSteel -67%

Know where you are in the cycle....
1st Quartile candidates for the next cycle...
Read 8 tweets
Oct 25
Assessing the survivability of #bitcoinminers

A) Understand the debt structure, particularly what falls due within the next 18 months
B) Assess the liquidity position today & over the next 18 months
C) Check on operating cashflow positivity at current #Bitcoin prices & lower
1/
D) What is the end of 1H 2023 liquidity picture like.. (cash+coins-debtpayments-/+6 month cash margin less capex obligations)
...positive margin of safety is required otherwise material dilution and/or bankruptcy becomes a high risk.
....conduct the same exercise yr end 2023.
2/2
Thoughts on potential cashflow recovery for #bitcoinminers

#Bitcoin pricing and sector operating CF margins:
1H 2024 $30,000 17%
2H 2024 $40,000 37%
1H 2025 $60,000 58%
2H 2025 $80,000 70%
1H 2026 $100,000 75%
2H 2026 $120,000 80%

Example: 20 #Bitcoin per day 2H 2025..

1/2
Read 4 tweets
Oct 17
Why is $AHQ a takeover target?

Cap < 5% of NPV

Trading at a 80% discount to peer group

Cap per tonne of Resource = 6c (or 70c of reserves)

Optimized cash margin per tonne = $50-75 over 2023-2024

Tenas Project lowest AISC and low capex start up.

#coal #metcoal #thermalcoal
It's always interesting that those who loved the stock at 50c, hate it at 5c or indicate the risks are much greater at 5c than 50c....one thing is for sure, on successful optimization the returns are much higher at 5c than 50c. At 50c the discount to NPV was 88%, at 5c it's 95%.
Tenas NPV at $125/t price and only 15% of the resource is A$300m, at $180/t pricing and 60% of the resource the NPV is over A$2bn alone. The hidden gem of why $AHQ is a bargain at 5c #coal $CKA $WHC
Read 5 tweets
Sep 26
The march towards corrective action and optimization, through 1Q 2023 +20% volumes, driving down cash costs below $175/t.

Optimized levels 4Q 2023: 125kt per month run rate at sub $135/t

$AHQ
$AHQ has broken down into our accummulation zone #coal

$40m at 9c = 2023/2024 cashflow $100m, 0.4x

$27m at 6c = 0.26x

*$5-25m dilution is still possible, higher end if Marco funding facility isn't executed.

Tenas DFS very low AISC and capex start up, in 2025
At 6-7c $AHQ becomes a potential asymmetric trade, downside 50% upside 10-15x

The outcome required would be over $50-70 cash margin on 1.5-1.8m/t of production = $75-126m cashflow

Difficult outcome when the thermal #coal spot falls below $180.
Read 4 tweets
Sep 24
The typical #Commodity or #goldstock graph that tends to interest us if backed up with fundamentals, we would expect 1H 2023 this could bottom at 2c down 50% from current levels (-95%+ from cycle peak), offering 20x returns over the following 48 months. Image
For fundamentals we would like to see 4-7c of potential annual cashflow 3 years out to back our 20x return.
This is how to create wealth, deployment of capital near a cycle bottom can grow by 10-20x over the following 48 months.

Get in step and alignment with the upcoming cycle bottom - this is the best guidance we can give any investor

#wealthcreation
#investing101
#cyclebottoms
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(