I summarize trade ideas for Today.
- FT Reported “Risk growing of Russia weaponizing its metal exports” – some ideas how to trade this
- Mintra – extraordinary cash distribution of 32% of its market cap signals takeover may by coming. Takeover premiums in Scandinavia ranged 50%-120%
- Linkfire up 250% in last 10 days, but still 80% down from its IPO price
- Biovica – last year biggest looser, this year biggest winner
Russia War Trades – Palladium Trade
FT reported today:
Citigroup has warned clients about the risks of Russia weaponizing its exports of materials such as aluminium, palladium and nuclear fuels, potentially leading to price rises for these critical commodities….
Russia produces about a quarter of the world’s palladium, which is used in catalytic converters in vehicles, and exports most of what it produces.
We like most the palladium trade, as Russia has the biggest share of the metals. We bought Sibanye StillWater Ltd SBSW. The company has mining and processing operations. It is primary producer of platinium, palladium, rhodium and gold. When the war started the stock traded around USD20, as market was worried Russia would cut supplies of metals. The worries since disappeared and the stock trades at USD8, a two year low. Downside might be limited, unless there is a global sell off. Upside could be 150% if the stock would return to levels when the war started. Idea for further research by investors.
Mintra – The extraordinary dividend may be funding for the takeover
Mintra declared 1.75 NOK capital disctibution, which represents 32% of its market capitalization.
Mintra structured the dividend as a return of capital. Return of capital is tax-free, the dividend is not.
Mintra does not have enough cash; they need to borrow for this. I was trying to figure out why they would do it. The share price would react more favorably to a declaration of regular dividends at an annually sustainable amount. The share price did not respond to the extraordinary dividend announcement.
The capital distribution have the following implications:
- Mintra’s share price decreased by that amount to 3.6 NOK
- Investors will get an extraordinary dividend equal to 50% of the adjusted share price
- If one wants to take over MIntra – it is an ideal situation – it reduces the Mintra share price significantly + Mintra itself provides tax-free cash (see below) for the takeover
- Both analysts that cover Mintra believe that Mintra will be taken over by its two major shareholders, who control over 40% of Mintra. The extraordinary dividend is a smart corporate finance exercise that indicates that the takeover may be coming soon
- Pareto analyst estimates, that takeover premiums in the last 12 months were around 50%-120%. This is the possible upside, if the takeover really materialises.
Linkfire up 250% in last 10 days, but still 80% down from its IPO price
since we wrote here about LInkfire, the stock has more than doubled. LInkfire reported best quarter ever for a second time in a row. Please see my previous post here on Linkfire. We are very bullish.
Biovica – last year biggest looser, this year biggest winner?
SeekingAlpha published a detailed article on Biovica on Monday. It is very appealing story.
Bloomberg published article that Biomarkers are changing the way cancer is treated (link below)
Biovica has the first ever FDA approved Biomarker test – for breast cancer. Biovica is one of global leaders in the booming field.
Quite detailed analysis of Biovica investment case published on Seeking Alpha, the largest investment idea site in the world.
Disclosure:
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.
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