Yesterday, Petra Diamonds (PDL) issued an RNS which sounded like good news: “Recovery of Five High Quality Blue Diamonds”. Feck FYB thought the morons and the shares jumped by 10%...but this was dissembling. For beneath the bullish headline was not such good news:
Buying bombed-out shares in companies that have previously run as successful businesses can be very lucrative if they somehow manage to turn things around, but it also offers a very high chance of losing all your money if you are proven wrong and hold to the bitter end. There are plenty of companies on the stockmarket that have been at death’s door but have managed to survive and have subsequently gone on to do quite well, but there are also a large number of others that went bust and where investors lost all their money, and there is a very fine line between the two if you do decide to take a risk on a company that finds itself in this situation.
I have repeatedly warned you on this website that Petra Diamonds (PDL) is an accident waiting to happen. It is happening and this is one where the shares have a clear end game of 0p. Let’s start with the three top golden rules of investing in mining companies…
Whenever you buy a share which you view as a potential recovery play, you have to accept the risk that of them will do everything but actually recover, and if the situation worsens then it is time to cut your losses and sell.
As at June 30 2019 Petra (PDL) had net debt of of $541 million. The shares, 45p a year ago are now 8.735p valuing the company at just £75.6 million. The question is: will Petra go bust?
When a share keeps on falling you have to decide whether the decline is terminal or how good the chances are of a recovery at some point. In some cases you will just be throwing good money after bad, and just because the shares have traded at a higher level in the past doesn’t mean that they will necessarily do so again if the fundamental changes to the business are terminal. But we also see cases where there is a temporary decline followed by quite a strong recovery, especially where the business is reliant on factors that are cyclical – such as in the natural resources sector as commodity prices fluctuate – or where it has suffered from shorting or a persistent seller, or even a combination of all of these...
Petra Diamonds (PDL) is a company that I covered back in March and so far I have been wrong about it having potential as a speculative investment, as the share price has just taken another big drop.
Diamond miners have performed very poorly of late, but that doesn’t mean that trend will continue indefinitely - and now could be a good time to buy with a longer term view. Petra Diamonds (PDL) is definitely one in this sector which has caught my eye lately, and is one of several diamond miners which I have kept an eye on over the years...
Hello Share Shufflers. There’s been a lot of commendation for gold miners on this splendiferous website. And quite rightly, as many of them have put on impressive share value in the continuing uncertainty about currencies, Brexit, QE and so on. But if the value of gold rises, so should the price of silver, platinum and precious stones. So let’s not forget diamond miners like Petra Diamonds (PDL).
So far the start of 2016 has seen many miners carry on where they left off in 2015, with continued drops in share price!
John Meyer of SP Angel this morning comments on Ironveld (IRON) and Petra Diamonds (PDL) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond
The pros and cons of trying to call the low are illustrated currently on the daily chart of Petra Diamonds, where it does indeed appear that we have been delivered a sustainable turnaround in favour of the bulls.
John Meyer of SP Angel this morning comments on BlueRock Diamonds (BRD), Mariana Resources (MARL), Metminco (MNC), Medusa Mining (MML), Petra Diamonds (PDL), Shanta Gold (SHG) and Solgold (SOLG) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Amur Minerals, Mwana Africa, Petra Diamonds and Serabi Gold as well as a detailed macro view on the news that is shaping global mining and the AIM mining pond.
Punters are standing by for an imminent trading update from Petra Diamonds (PDL) , following the company’s eagerly anticipated discovery of an exceptional 29.6-carat blue diamond at its historic Cullinan mine in South Africa.
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