RE: RE: The Silver SevenAs I indicated in previous posts, this FR move seems to be a re-pricing based on extreme low valuation.
There are 4 ways to value FR:
1. With respect to peers and their fundamentals. As I just pointed out, FR is 50% of Peer average P/E so should trade at double the current price just to get even with Peers.
2. With respect to peer Historical norms. As I also pointed out Senior Silver Seven trade at 50% of 2007 values, so should trade at double the current levels in a strong PM market phase.
3. Technical Charts show the cup and handle breakout pattern gives a technical target of $8.00
4. Historical P/E averages would indicate that FR should trade around $8.00-$12.00 based on a reasonable P/E multiple of 20 to 25.
Given that we are currently experiencing a PM breakout into new highs, with round 2 of QE happening in the US, we should reasonably expect strong Fall PM share prices. Therefore, I expect to see FR at $8.00 before xmas.
A Silver Price move to $25 or $30 by Jim Sinclair's Feb 15 deadline (for $1650 gold), would probably double FRs earnings as well as those of its peer group, and we sould see the upper end of that range ($12) by Feb. if not higher. given the higer silver prices in this and last quarter, I would expect the next 2 quarter's results to show increases over the $.10 earnings of last quarter...
I myself will not sell the majority of my warrants before FR reaches reach $8.00. If by xmas, then I will sell half. I expect to sell the remainder of the warrants in February at FR = $12.00, FR.WT.B = $8.50.
If FR were to trade at the top of its peer group (where it belongs), and the peer group was at 2007 levels, AND silver traded at $30 by March, then FR could trade at $20.00. (warrant = $16.50) I don't expect this, but I was here in 2005-6, and it could easily move that fast!
lotus petals,
gildage