RE:RE:RE:scotia & target priceWay north of $1.00. It is trading at 2.1x EV/Ebitda for 2Q22 PF the bond buyback and ex'ing out all receivables and cash held at Moa (IE conservative cash in the equation). Over the past year and a half, it has been trading as low as 4.5x and as high as 11x.
I just bought it this past Feb/22 at 2x. So those of you who either bought it or owned it all through 2021 and part of 2020, were paying or holding at at comparatively very expensive levels. If you bought it at $.30-.40 the past year and a half and think today's stocdk price is in any way the same valuation, you are wrong. If you bought it in that time frame, you should love it now.
So, on my model, at $2.00 for YE22, it would still only be trading at 4.7x...still cheaper valuation that at any other time since I have been following this thing for 20yrs, save for the past 6 months.
Other considerations that will improve the valuation even more:
- They actually upstream capital from Moa through a release of working capital and the cash that sits on the Moa balance sheet
- They execute the excess cash flow sweep to buy bonds back at Par (they got what they could at .85 so might as well just delever on regular basis)
- They do a Co streaming deal. Cuba was the hold up last time...I hardly think Cuba is in a positon to refuse on today
- They get a premium for their Ni as very little Ni is trading vs the LME Reference Price is what I am hearing. And this is not NPI, it is Class I/Battery Grade Ni, so I think a secondary market is developing with a large delta. I think we will get more clarity on the 2Q22 CC on this topic
So, ya I think it can trade at $1.00 by YE22...but more likely $2.00 plus. It will require some smart money to step in and recognize the FCF in this orphan.