Number clarification for accountants like Mr. Sand To the accountants and teachers of Value investing 101, who are recent visitors to this board:
For ease of bulletin board conversation I simply used $5 as a potential price target 24 months from now with 0 rollback. Easily attainable I believe with 9 million oz eq. production and conservative earnings of $15 per oz. (if Lenic does not overextend the company) 9 000 000 x 15 = $135 000 000 in earnings. Totally doable without a rollback and pretty darn good earnings to share ratio.
The $40 number I used is the same scenario but with the 8:1 rollback. (Sandal.... 5 x 8 = 40)
My point, which would be well taken by long time observers in the mining industry, is that mass psychology will be much more likely to move the stock to $5 (without a rollback) than it will to $40 (with a rollback).
I COULD CARE LESS WHAT NUMBERS YOU USE.... IF YOU WANT TO BELIEVE THE STOCK WOULD BE WORTH $6.40 IN TWO YEARS WITHOUT A ROLLBACK THEN USE THAT NUMBER. IT DOES NOT REALLY MATTER AS WE WON'T EVEN BE CLOSE TO PREDICTING CORRECTLY IF LENIC CONTINUES THE DILUTION PARTY.
******* LETS USE THE COMMON COMPARISION OF FIRST MAJESTIC
As AUN already has several fund companies/ETF's involved, and volume is minimal when the U.S. market is closed... I don't believe it will make a great deal of difference to our price. Merely it will be easier for some folks in the U.S. to day trade AUN. Given the above position, consider the exaggerated scenario below.
First Majestic currently 123 087 237 fully diluted. $17.55.
Lets roll back First Majestic to 41 029 079 shares. Price = $52.65 per share.
Now double production. More likely to move to $35.10 or $105.30?
NOW, apply your answer to the aurcana numbers I gave above.
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Thanks so much for the motivation to have a scotch. It's appreciated ... almost as much as the wonderful "ignore" button stockhouse has provided.
BEST WISHES TO ALL THE LONGS