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Wheels Group Inc GRFJF



GREY:GRFJF - Post by User

Comment by 007YoungGunon Aug 28, 2008 4:16pm
731 Views
Post# 15417581

RE: BNN mentions WGI

RE: BNN mentions WGIHere's my 2 cents on WGI, and not the stock price. 

WGI, I believe, has a very conservative management team that is efficient and so far has delivered on their promises.  Only recently, they projected that WGI would become cash flow positive, and just this past July we saw that happen.  WGI also said that they were planning on ramping up production between 20-30K of gold, and they delivered on that promise too, reaching the high end of that projection.  Also, management has placed a gold hedge on the books to ensure operational stability.  If they hadn't, I believe this stock would have been bought out by now for a fraction of their potential value or be trading at a much lower price.  Looks like a great call now.

As for potential M&A activity, I think WGI is not aggressively looking to acquire other companies at the moment,  and needs cash flow to ramp up in order to do so.  However, if there's a good business opportunity, I doubt WGI will hesitate.

Here my 2 cents on the price of the stock.

sp will be hurt most by a coupled U.S. dollar strength and canadian dollar weakness as it operates in CDN dollars.
sp will lag a general gold surge because of its gold hedge.  Will lag a general gold drop because of its hedge.
sp will be rewarded slow and steadily as promises are delivered. 

Combining these points together, I think WGI is a keeper and the patient will be rewarded.  
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