RE: 6zs2xLow lying fruitObviously there is frustration and dissapointment around the performance of HRG lately. As is often the case, the responsibility lies with managment, and their handling of delays, spin outs etc. There really has not been any substantial change, as yet in terms of assets, value and potential moving forward, that I am aware of. There have been some delays, some rising costs, and a poor, at least so far in terms of perceptions, deal on Prognos. Of course Prognos end benefit to shareholders is far from clear. My experience in this sort of situation says you have either great opportunity, bad news that is not yet public, or just poor management, or a combination of these. If it is just a general situation caused by a combination of poor management and resolvable issues, with remedies over time, the upside from the emotional bottoms can be very good. The latest best similar example of this may well be Eldorado over past year. More on that in a bit.
The management are not impressive of late. They seem, as is often the case, to be removed from the reality of the shareholders, chosing to do so on purpose, or not, depending upon how you view their motivations. Sometimes, when these situations have value, it is an advantage to certain parties, when emotional reactions bring the price down, as then options and other actions can take place, repositioning of shareholder base can take place, etc etc etc. In other words its game playing time. Unfortunately often at existing shareholders expense. Is that the case here? But when it smells like a....... I do not know however, but the investor relations, management news and actions of late, and promotional side of this company certainly has not been great recently. Regardless of motivations or reasons, it ALL rests with the CEO and management, as that is their job. End of story. So in that sense, I do agree with some of the frustrated here, with respect to their performance of late.
But of course what is important is where now? Well I watched the Eldorado scenario and bought in when everyone sold it down, many "experts" were giving sell, sector perform and other signals, of course right when it was at or near lows. In other words AFTER THE FACT. The facts however at Eldorado pointed to the problems being solved and favorable outcomes over time, which is exactly what happened. Result: Eldorado outperformed and did well over last while. I, as posted on Eldorado, decided yesterday, to take profits on that situation, and move in a bigger way into this stock. I already have a position here, but I think it is VERY Eldorado like and will do exactly the same thing. That is, outperform over next year. It will be volatile, the bottom may well not be in. I have no idea what that exact number will be, and I doubt anyone does.
My take is simple: value will assert over time, unless something so fundamental has occurred that it changes in a big way. I do not feel that is the case. This is very Eldorado like, although for different purported reasons.
I do think however, that managment and investor relations are not doing a good job of late in terms of investor communications. Especially in getting the potential across. No excuses, they are poor of late, in this arena.
But my bet is that over next 16 months, they improve, the stock bottoms and moves up, and gold corrects a bit on US talk and then rockets to new highs. Am I right? Time will tell. But upside here seems substantial, which is ALL I look for in a stock. I sold Eldorado, BECAUSE it already did this in large part, and I see its upside as still good, but in percentage potential terms, less over next 18 months than here.
Remember: when folks are the most frustrated, emotional and capitulate is when you want to buy a stock, if the fundamental story is there. I trade and build on the long term gold story, which is still up by the way, but I look for undervalued situations because that is where the real money is. I think that is the case here. A number of factors all converging at once, to bring an emotional bottom, which for some may prove very profitable, and for others bring a loss. Its that simple. You can be patient, steady and handle the volatility, or sell, or miss a great buying opportunity. Remember this 16 months from now and be able to say you were right or wrong whatever your take. Lets have a few other opinions, other than rants and raves because you are down at present. That is history, what is coming is what counts now.