Hi Dean, I had a big position in drillers as we were in the first innings of the supercycle. But, I guess we got struck out a few times in a row. I still believe in this thesis but from what I can read form Foraco, Major Drilling, Capital and even Orbit, all drillers appear to have the same strategy to flock to the majors. A bit normal, the juniors do not have any cash. The beauty of GEO was their strong margins (when they collect of course). Now it will trend similar to the others. So is it worth keeping it with a higher risk profile ? Personally, I exited my position, do not like to see the coackroach in the receivables and the cut in dividend to save some cash. And the business does not appear more attractive than the other guys. Seems to me that Capital is just as cheap with less risk, that MSALABS business is growing like weed with a new contract with Barrick that outsources 3-10 labs with Chrysos.
Hi Dean, I had a big position in drillers as we were in the first innings of the supercycle. But, I guess we got struck out a few times in a row. I still believe in this thesis but from what I can read form Foraco, Major Drilling, Capital and even Orbit, all drillers appear to have the same strategy to flock to the majors. A bit normal, the juniors do not have any cash. The beauty of GEO was their strong margins (when they collect of course). Now it will trend similar to the others. So is it worth keeping it with a higher risk profile ? Personally, I exited my position, do not like to see the coackroach in the receivables and the cut in dividend to save some cash. And the business does not appear more attractive than the other guys. Seems to me that Capital is just as cheap with less risk, that MSALABS business is growing like weed with a new contract with Barrick that outsources 3-10 labs with Chrysos.
Can't argue with your logic. They still have elevated long dated receivables. I wouldn't be surprised if they do have to write some down.
I have been slowly building a position in FAR. It was nice to see them clean up the debt.
I've been debating opening up an IB account to get access to companies like Chrysos. The placement presentation is really intriguing.