Casey on Aurelian
TRADING SARDINE— ARU is today’s market darling, with a phenomenal discovery story almost everyone in the sector knows, so there’s no need to go into great detail. The short version is that starting last April, ARU began hitting a steady stream of high-grade intercepts a couple hundred meters thick, like the ones already mentioned elsewhere in this issue.
So why didn’t we recommend it? Didn’t we notice the discovery hole?
Yes, we did notice, but the stock just about tripled on the news, and the chances are almost always against a repeat of such a performance. Subsequently, the stock’s explosive rise kept ahead of not only what the company could show it might have, but what it seemed likely to be able to show it might have if all went very well—which it usually never does. We never saw the correction we were expecting to give us our entry point. Ah, well, you can’t kiss all the girls.
What about now?
Well, the expectation at the moment is that ARU is dead-certain for a takeover, so we don’t see the double from current prices we like to see in any stock we recommend. That said, the takeover will likely offer a nice premium for current shareholders, so buying ARU as a short-term trade for a respectable, but not phenomenal, return is probably a pretty safe bet. Just remember to place your orders on days when gold is down if you decide to play that trade.