NORD keeps going down HRG Up, Why? I keep tracking Nordgold (NORD) on the London Stock Exchange (LSE). It started at 7.80 US $ back on Jan 21 (I think) and is now only 6.75 for a loss of 13.5% so far. So what is Mordy gong to do about it? Meanwhile HRG has been gong up from about 1.22 to 1.36 for a gain of 10%.
I think Mordy will have to do some major marketing here and realistically speaking he cannot do it without also showing (for a change) HRG ina favourable light since it represents close to 50% of NORD.
At present HRG witha cap of 1.14 B (840 M shares) had a net profit of around 160 M $ in 2011 by producing 374 Koz of gold equivalent.
NORD on the other hand with a cap of 2.47 B $US and 359 M shares outstanding had a net profit of approx. 210 M $ by producing 750 Koz of gold equivalent.
Thus depending on how one looks at it the valuation for HRG should be at least 50% og NORD but likely substantially more due to the superior profitability of HRG. In addition HRG sits on around 200 M $ in cash and cash equivalent. So the cap should be somewhere between 50 and 75 % of NORD, say 65%, thus a cap of 1.61, giving it a per share valuation of at least 1.91 and more if the cash held by HRG is factored in.
What do You think?
My 2 cents worth, Wolf E