RE:Why do you guys like Sherritt?I haven't been to the casino for a long time....so I figured I'd try for a 7. Only a few cents underwater. I do think it will pop back up to high 40"s soon.
Like I said, long term, this thing is going to zero. You really have to ask yourself why, when Ni and CO are at multi year highs, this stock in trading below 40 cents. Well here are some answers:
1) There is no cash left to service it's debt principal after paying interest expense + technologies + corporate costs.
2) Mixed Sulphide production has been trending down for sometime. The last 2 quarters were the worse back to back quarters in history.
3) Moa is an environmental nightmare. Sherritt will never be looked at as "green nickel" becuase of this. It will also deter any potential buyers.
4) Governance has always been an issue with this company, just look at the executive / director compensation. For a penny stock this is absurd.
5) The stock is totally reliant on one operation. If there is a signifianct disruption in Moa (call it 6 months) then the company wouldn't have enough cash to survive.
6) There is no growth prospects. The vlaue of the stock is totally dependant on a higher than average nickel cobalt price.
7) Notice I didn't mention Cuba / OFAC? Well because this is actually an annoyance, to be sure. But it has been used by management for such a long time to explain high compensation / low perfromance. Company has been operating under these limitations for 25+ years....