A few thoughts for newcomersMany here ask what is a good entry point for this stock. Will it correct by a nickel or a quarter? Or if it rallies 10% should I put it out and buy it back on the reaction? Surely most are looking at the chart and the fact that it has gained nearly tenfold in a little more than a year's time. So surely if I buy it today I would be buying dear? Or chasing the stock? Or too late to the party?
The problem is exactly this: people only look at price and the stock chart, and maybe consider a few qualitative traits of a company. But they don't know how to value a company. I think if you understand the mining business, and you know this company's assets, history and management, and you know how to do equity valuation, then you may realise that THIS STOCK IS TREMENDOUSLY UNDERVALUED TODAY, at a price of around CAD 4.50/share. I will not go into the details, as I have posted many times before, and you may go back and read those posts if you wish.
Suffice to say that if you cryogenically freeze the assets, its static value is north of CAD 20/share. But this is a growth company. It is making new discoveries and developing and optimising its projects all the time. So in all likelihood, as only a few have said on this board, this will be a 40-50 dollar stock in a few years' time. In fact, I say that if you knew all these things about mining and securities analysis, you may realise how mispriced this company is. But in fact, most analysts and so-called sophisticated institutional investors and industry people have NO CLUE how to value a company. And "value investors" would never touch a resource stock, much less an exploration stock, because of the lack of revenue, cyclicality, volatility of prices, etc. They cannot see that in a few years' time this exploration juggernaut will have become a multi-asset, producing, mining behemoth, bigger and better than Barrick Gold. But most shareholders will only have scalped it for 10 cents here, and 30 cents there, but missed the hundreds of percent gains as this stock is vaulted into the stratosphere.
So I genuinely hope that this stock corrects, and you are able to buy it cheaper. But as far as I am concerned there is a magnet above 20 dollars pulling this stock to fair value as people figure out the truth of this company, which is that:
1. It has the greatest assets in the industry;
2. It has the greatest management in the industry; and,
3. It has made the greatest mineral discovery of the century, at Kakula, let alone Kamoa.
So you can hardy lose money here. If you hold it for more than a week you are almost sure to have a profit. But if you play it short term, you will not make the big money. If you just shut your eyes, buy as much as you can as soon as possible, hold it and forget about it for a few years' time, I would be surprised if you do not make an indecent amount of money, because as I have said before, after tens of thousands of hours studying the mining business, I have learned two important things:
1. In every cycle, the best stocks go up 50x, 100x, or more than one-hundred-fold in just a few years' time; and,
2. This is the best stock of this cycle, or any cycle anyone alive today can recall.
I do not guarantee your profit, nor can I advise or counsel you on your trading. But I can say that I am holding a big position for the long haul, and fully expect what I say to come to pass.
Do your own due diligence, and good luck.