Latest news with #PanAfricanResources
Daily Mail
3 days ago
- Business
- Daily Mail
Why gold mining shares are too cheap, according to JP Morgan analysts
After a strong run for precious metals, gold mining shares still look undervalued. That's the view from JP Morgan's latest note on listed producers, which argues there's room for substantial upside, especially if its bullish forecast for the precious metal proves right. Its commodities team is pencilling in a price of $4,100 an ounce for 2026. That's well above current spot levels of $3,320 and would mark a new all-time high. Based on that estimate, JP Morgan sees around 40–50 per cent upside to average analyst expectations for earnings before interest, tax, depreciation and amortisation across the sector. While the American bank focused on the larger producers, citing names such as Fresnillo and Hochschild, there's plenty of value lower down the evolutionary chain. Stocks on this layer of the pyramid are increasingly disconnected from the rising gold price, rather than moving in step. Of course, being small and mid-cap companies, it often takes time for the market to focus on inherent value, even when backed by gold. These smaller players are also more prone to operational mis-steps that larger organisations can absorb. Below is a far-from-scientific roll call of gold stocks that have thus far flown under the radar. Probably the pick of the bunch is Pan African Resources, which, with a £940 million market capitalisation, has broken free from the small-cap bracket. While its share price is up around 30 per cent year to date, it still lags the performance of Endeavour (+51 per cent) and Fresnillo (+80 per cent). Dropping down a division, Caledonia Mining stands out. Its performance has been stronger than Premier African and it comes with a very decent dividend. As valuations shrink, the link between the gold price and share price weakens. A case in point is Ariana Resources, which has modest production from its Turkish operations but ambitious growth plans in Zimbabwe. Panmure Liberum analysts, fresh from a site visit to Ariana's Dokwe project, described it as a potential multi-million-ounce asset with strong development prospects. That optimism is in stark contrast to Ariana's stock market performance, down more than 40 per cent year to date. It suggests value and opportunity may be buried in AIM's twilight zone. Ariana is preparing to list in Australia, a savvy move in a market where investors, both private and institutional, know how to value smaller gold companies. Appetite for diggers and prospectors is strong, supported by self-directed flows from Australia's generous superannuation schemes. So, watch this space. Wider market moves Turning to the wider market, the AIM All-Share continued to outperform its benchmark, rising 1.3 per cent to 746.39 and outpacing the FTSE 100, which nudged just 0.4 per cent higher. This reflects growing confidence, underlined by a slew of successful fundraisings that made May a bumper month for companies replenishing their coffers. The week's standout performer was Blue Star Capital, which jumped 150 per cent after news of its investment in cross-border crypto payments platform SatoshiPay. Avacta rose 43 per cent, a performance that would have topped the leaderboard most weeks. The appointment of two heavyweight independent directors helped ease investor concerns over a delay to the company's results. One of the new recruits, Richard Hughes, brings deep capital markets experience, possibly signalling a strategic shift for the precision medicines group. ATOME climbed 35 per cent following the launch of a new renewable energy division, initially focused on Latin America. And the laggards… At the other end of the table, Totally fell 84 per cent as investors digested the healthcare provider's semingly insurmountable funding position. Watkin Jones dropped 21 per cent after the developer of student housing and build-to-rent properties posted a loss and painted a gloomy picture of current trading. Finally, the small-cap market, especially where trading is thin or controlled by market makers, tends to react sharply to news, with professional price-setters often moving to protect positions rather than reflect true value. A case in point is hVIVO. Shares slumped 45 per cent on Friday following the loss of one contract and the postponement of another. Seasoned small-cap investors will know that sanity usually prevails, but it can take time for stocks like hVIVO to find their footing. In the meantime, it's worth remembering this is a business with £47million of contracted revenue already secured for the current year and, as of its last results, £44million in cash.
Telegraph
08-04-2025
- Business
- Telegraph
Our gold mining shares will protect us against tariff wars
Questor is The Telegraph's stockpicking column, helping you decode the markets and offering insights on where to invest. At least 'liberation day' means that investors now know what tariffs America will impose upon imported goods, albeit on a country-by-country basis and one that is far from clear or simple. What investors don't know is the duration of these levies and whether any deals can be implemented to erase or reduce them. Given the prevailing uncertainties, it makes sense for any portfolio to have an allocation of some kind to so-called 'haven assets'. Gold qualifies as one of those and we can continue to hold on to both Resolute Mining and Pan African Resources, even if both bring company-specific risk – particularly because of where they operate. Resolute has assets in Mali, where the military government is taking a harder line on taxes and extracting revenue for the state, while Pan African must contend with South Africa's creaking electricity grid. Last December's acquisition of Tennant Consolidated in Australia brings welcome geographic diversification and a big potential kicker to Pan African's overall group gold output. But it does mean a higher debt pile, too. At least Pan African's stock trades on a lowly multiple of earnings, perhaps as a reflection of wider scepticism as to whether gold prices can maintain their strong run. Gold may be due a pause for breath, but it could yet benefit from the lack of visibility on what the leader of the world's largest economy, and home to its reserve currency, single largest stock market and single largest bond market may do next. The Republican party under Donald Trump has many strands and there seem to be different goals when it comes to tariff policy. Some seek a deal to extract better trading terms or competitive advantage in the fields of market access, minerals or technology. Others wish to use the revenue raised by tariffs to facilitate cuts in US rates of income tax. The US president talks more of the long-term gain of bringing jobs back to America and boosts to domestic output and growth, even if this comes at the cost of possible near-term pain in the form of higher prices, trade frictions and slower growth. The lack of clarity when it comes to the thought processes behind Trumponomics makes it hard to assess what the end-game may be. However, we can offer three thoughts. First, the latest round of tariffs takes the proposed level of such duties to their highest level in over a century. It is hard to see how Trump voters will welcome the initial extra costs, especially on agricultural products that America does not make for itself. The best cure for high prices, however, is high prices. And this column feels the tariffs could ultimately be deflationary, not inflationary, as they will destroy demand – or at least force production of cheaper alternatives. Second, the tariffs unveiled on April 2 exceed the levels set by the Smoot-Hawley Tariff Act of 1930. The tariffs did not cause the Great Depression of the 1930s, but they contributed to it – alongside excess debt – to the 1929 crash, banking crises and policy error. The 1930s were marked by deflation, not inflation, so it may be unwise to assume that the tariffs lead to a sustained bout of price rises this time around. Finally, those companies that look set to be hardest hit are those that derive a big percentage of their sales from exports to America and source a lot of their materials and products from Asia, where the new tariffs look particularly punitive. Of the Questor portfolio, names such as Burberry and Dr Martens look exposed here and both already have difficult turnarounds ahead of them, so we shall have to think carefully. Sentiment may also turn against emerging market plays such as Standard Chartered and Ashmore. The exemptions offered to oil and gas and pharmaceuticals offer some comfort to our positions in Shell and GSK, while the business models at utilities National Grid and SSE may reaffirm their value as defensive ballast, given how demand is relatively insensitive to the economic cycle. Meanwhile, it is tempting to think that real estate plays like Derwent London, Shaftesbury Capital and Town Centre Securities may be relatively immune to Trump – given the UK-centric nature of their business. A wider economic slowdown could puncture that theory. At least their shares trade at big discounts to net asset value and, ultimately, valuation will remain our guide going forward as to when a stock may represent a risk or an opportunity.
Yahoo
24-03-2025
- Business
- Yahoo
UK Stocks Trading Below Estimated Value In March 2025
The United Kingdom's FTSE 100 index has recently faced downward pressure, largely influenced by weak trade data from China, which has impacted companies with significant exposure to the Chinese market. As global economic uncertainties persist, identifying undervalued stocks that have strong fundamentals and potential for growth becomes crucial for investors looking to navigate these challenging market conditions. Name Current Price Fair Value (Est) Discount (Est) Pan African Resources (AIM:PAF) £0.401 £0.76 47.2% On the Beach Group (LSE:OTB) £2.37 £4.59 48.3% Gaming Realms (AIM:GMR) £0.355 £0.66 46.1% Informa (LSE:INF) £7.852 £15.45 49.2% JD Sports Fashion (LSE:JD.) £0.7576 £1.49 49.2% AstraZeneca (LSE:AZN) £116.08 £218.64 46.9% Victrex (LSE:VCT) £9.49 £18.32 48.2% Likewise Group (AIM:LIKE) £0.185 £0.37 50% Vanquis Banking Group (LSE:VANQ) £0.589 £1.13 47.9% TI Fluid Systems (LSE:TIFS) £1.968 £3.75 47.5% Click here to see the full list of 57 stocks from our Undervalued UK Stocks Based On Cash Flows screener. Let's take a closer look at a couple of our picks from the screened companies. Overview: Crest Nicholson Holdings plc is a company that builds residential homes in the United Kingdom, with a market cap of £428.09 million. Operations: The company's revenue primarily comes from its Home Builders - Residential / Commercial segment, generating £618.20 million. Estimated Discount To Fair Value: 37.6% Crest Nicholson Holdings is trading at £1.67, significantly below its estimated fair value of £2.68, indicating it may be undervalued based on cash flows. Despite expected profitability and revenue growth outpacing the UK market, concerns arise from recent financial performance with a net loss of £103.5 million and auditor doubts about its going concern status. Analysts forecast a stock price rise by 22.1%, suggesting potential for recovery despite current challenges. Insights from our recent growth report point to a promising forecast for Crest Nicholson Holdings' business outlook. Take a closer look at Crest Nicholson Holdings' balance sheet health here in our report. Overview: discoverIE Group plc designs, manufactures, and supplies components for electronic applications globally and has a market cap of approximately £570.57 million. Operations: The company generates revenue through its Magnetics & Controls segment, contributing £256.50 million, and its Sensing & Connectivity segment, which brings in £169.60 million. Estimated Discount To Fair Value: 21.1% DiscoverIE Group is trading at £5.94, below its estimated fair value of £7.53, indicating potential undervaluation based on cash flows. Despite flat sales year-on-year, organic sales are recovering with improved divisional performance in S&C. Earnings are expected to grow significantly at 22.4% annually, outpacing the UK market's growth rate of 13.9%. However, a low forecasted return on equity and large one-off items affecting earnings quality present challenges for investors to consider. The growth report we've compiled suggests that discoverIE Group's future prospects could be on the up. Dive into the specifics of discoverIE Group here with our thorough financial health report. Overview: Gulf Keystone Petroleum Limited is involved in the exploration, development, and production of oil and gas in the Kurdistan Region of Iraq with a market cap of £444.66 million. Operations: Gulf Keystone Petroleum Limited generates its revenue primarily from the exploration, development, and production of oil and gas in the Kurdistan Region of Iraq. Estimated Discount To Fair Value: 42% Gulf Keystone Petroleum is trading at £2.05, significantly below its estimated fair value of £3.54, highlighting potential undervaluation based on cash flows. The company reported a substantial increase in production for 2024, with gross average production up 86% from the previous year. Revenue and earnings are forecast to grow rapidly at 26.6% and 62.1% annually, respectively, outpacing the UK market growth rates; however, its dividend coverage remains a concern for investors. Our growth report here indicates Gulf Keystone Petroleum may be poised for an improving outlook. Click here to discover the nuances of Gulf Keystone Petroleum with our detailed financial health report. Click here to access our complete index of 57 Undervalued UK Stocks Based On Cash Flows. Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance. Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:CRST LSE:DSCV and LSE:GKP. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
21-03-2025
- Business
- Yahoo
Return Trends At Pan African Resources (LON:PAF) Aren't Appealing
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So, when we ran our eye over Pan African Resources' (LON:PAF) trend of ROCE, we liked what we saw. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Pan African Resources: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = US$107m ÷ (US$849m - US$87m) (Based on the trailing twelve months to December 2024). So, Pan African Resources has an ROCE of 14%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 8.3% it's much better. Check out our latest analysis for Pan African Resources Above you can see how the current ROCE for Pan African Resources compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Pan African Resources for free. While the current returns on capital are decent, they haven't changed much. The company has employed 123% more capital in the last five years, and the returns on that capital have remained stable at 14%. 14% is a pretty standard return, and it provides some comfort knowing that Pan African Resources has consistently earned this amount. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns. In the end, Pan African Resources has proven its ability to adequately reinvest capital at good rates of return. And long term investors would be thrilled with the 350% return they've received over the last five years. So while investors seem to be recognizing these promising trends, we still believe the stock deserves further research. Pan African Resources does come with some risks though, we found 4 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable... While Pan African Resources may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
27-02-2025
- Business
- Yahoo
UK Stocks Estimated To Be Up To 49.9% Below Intrinsic Value
The United Kingdom's stock market has recently experienced turbulence, with the FTSE 100 index closing lower amid weak trade data from China and global economic uncertainties. As these challenges persist, investors may find opportunities in stocks that are estimated to be significantly undervalued, potentially offering a margin of safety in an unpredictable market environment. Name Current Price Fair Value (Est) Discount (Est) Pan African Resources (AIM:PAF) £0.357 £0.71 49.9% Gaming Realms (AIM:GMR) £0.372 £0.67 44.8% Gateley (Holdings) (AIM:GTLY) £1.365 £2.65 48.5% Legal & General Group (LSE:LGEN) £2.444 £4.86 49.8% Victrex (LSE:VCT) £9.45 £18.17 48% Duke Capital (AIM:DUKE) £0.30 £0.54 44.5% Likewise Group (AIM:LIKE) £0.195 £0.37 47.8% Calnex Solutions (AIM:CLX) £0.556 £1.01 45.1% Optima Health (AIM:OPT) £1.82 £3.33 45.3% Melrose Industries (LSE:MRO) £6.214 £12.26 49.3% Click here to see the full list of 53 stocks from our Undervalued UK Stocks Based On Cash Flows screener. Below we spotlight a couple of our favorites from our exclusive screener. Overview: Brickability Group Plc, with a market cap of £200.54 million, supplies, distributes, and imports building products in the United Kingdom through its subsidiaries. Operations: The company's revenue is derived from several segments, including £90.55 million from importing, £88.22 million from contracting, £63.21 million from distribution, and £380.56 million from bricks and building materials. Estimated Discount To Fair Value: 29.8% Brickability Group is trading at £0.62, significantly below its estimated fair value of £0.89, presenting a potential undervaluation based on discounted cash flow analysis. Despite lower profit margins this year and significant insider selling, the company's earnings are expected to grow substantially at 35.2% annually, outpacing the UK market's average growth rate. However, its dividend yield of 5.37% is not well covered by earnings, indicating potential sustainability concerns. Insights from our recent growth report point to a promising forecast for Brickability Group's business outlook. Delve into the full analysis health report here for a deeper understanding of Brickability Group. Overview: Pan African Resources PLC is a company involved in the mining, extraction, production, and sale of gold in South Africa with a market capitalization of £724.47 million. Operations: The company's revenue is primarily derived from its operations at Evander Mines ($162.06 million) and Barberton Mines ($190.16 million), with additional contributions from Agricultural ESG Projects ($0.43 million). Estimated Discount To Fair Value: 49.9% Pan African Resources is trading at £0.36, significantly below its estimated fair value of £0.71, indicating potential undervaluation based on discounted cash flow analysis. Despite high debt levels and a dividend yield of 2.67% not well covered by free cash flows, the company forecasts significant earnings growth of 34.5% annually, surpassing UK market averages. Recent results show stable gold production with expected increases in future output driven by infrastructure investments and operational improvements. Upon reviewing our latest growth report, Pan African Resources' projected financial performance appears quite optimistic. Dive into the specifics of Pan African Resources here with our thorough financial health report. Overview: Avon Technologies Plc, with a market cap of £430.69 million, specializes in providing respiratory and head protection products for military and first responder markets across Europe and the United States. Operations: The company's revenue segments include Team Wendy, generating $129.40 million, and Avon Protection, contributing $145.60 million. Estimated Discount To Fair Value: 10.3% Avon Technologies is trading at £14.5, slightly below its estimated fair value of £16.17, suggesting potential undervaluation based on cash flow analysis. The company has recently secured an $18 million order from the Defense Logistics Agency, enhancing revenue prospects. While revenue growth is modest at 5.8% annually, earnings are projected to grow significantly at 59.2% per year over the next three years, outpacing UK market averages despite low forecasted return on equity and large one-off items impacting results. Our growth report here indicates Avon Technologies may be poised for an improving outlook. Unlock comprehensive insights into our analysis of Avon Technologies stock in this financial health report. Click this link to deep-dive into the 53 companies within our Undervalued UK Stocks Based On Cash Flows screener. Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance. Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIM:BRCK AIM:PAF and LSE:AVON. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
