I imagine yesterday’s RNS launched by Tharisa. They’re shopping for out BEE minorities stake within the South African Mine for $26.5m by issuing 13 903 743 new shares. I wrote them up right here (when the Rhodium worth was a lot greater). I believe the share worth isn’t reflecting the quantity of worth they’ve obtained from this transaction.
BEE stands for Black Financial Empowerment – in essence, blacks get richer by transactions depriving non blacks of their cash/property (a harsh eplanation – extra balanced one is right here). I perceive the place they’re coming from however in the end it isn’t in my monetary curiosity.
I imagine that is an absolulte discount. The Tharisa Minerals minority final 12 months earnt $38.5m – so in essence it’s being purchased for a 12 months and a bit’s income – this relies enormously in your expectation of subsequent 12 months’s earnings. I’m going to make use of final 12 months’s to simplify this as I imagine it hasn’t been absolutely understood by the market or mirrored within the share worth.
![](https://deepvalueinvestments.files.wordpress.com/2022/02/tharisa.jpg?w=1024)
Subsequent we go on to the impact on earnings per share (p117).
![](https://deepvalueinvestments.files.wordpress.com/2022/02/tharisa2.jpg?w=1024)
So with the 13.9m new shares we get 269,458,000+13,903,743 so 283,361,743.
Earnings go up from $100.469m to $131.541m – so headline EPS goes up from 38.3c to 46.4c – a 21% improve
On announcement of this information yesterday the share worth rose from 136.5 to 145 now (@13.26 17/2/2022) – it is a c6.2% rise.
There isn’t a logic I’m conscious of for this restricted worth transfer. Some on ADVFN recommend that is only a proposed transaction however the RNS says the settlement is concluded. There are situations on the belief however that is solely 6% of the holding or 3.2m shares.
I believe that is an occasion the place a mid-day RNS was misinterpret / not absolutely thought by – creating a possibility for the sharp. I’ve purchased extra – Tharisa is now my largest place – an 8% weight. I intend to promote as soon as the worth rises to mirror the excellent news.
It isn’t like the corporate is pricey, it’s on a ahead PE of about 4, with wholesome margins at present PGM costs. They probably have $80m money obtainable with no internet debt. The present Rhodium worth just isn’t the place it was this time final 12 months – c 25000 however continues to be wholesome. There could also be scope for the rhodium worth to rise – it’s utilized in catalytic converters and resulting from chip shortages manufacturing is down. These are anticipated to ease in 2022/2023 . They’re additionally guiding extra manufacturing in 2022.
I’d recommend if you’re occupied with doing this you leap on ASAP – these types of alternatives don’t dangle round for lengthy.
One final be aware (don’t often do that) – am making an attempt to boost cash to purchase a defibrillator for the health club I am going to (extra . Donations could be appreciated… Suppose how a lot cash (a few of you) make from my concepts and the way a lot you’ll miss them if I died resulting from overexertion / lack of a defibrillator🤣.
Hyperlink to donate is right here.