RE: my insights on Share direction my insights on Share direction
I am one of the «fortunate» who has recently invested in Storneway. I've never understood why this title is so low. I was lucky enough not to see it before at a higher price!!!!
Here is my opinion on the value:
First, if you believe that every dollar invested at this stage of development is worth at least one dollar then you should see at least $ 1.75 as the actual minimum stock value (because book value is 1,75$).
But do you really believe that every dollar invested is just a dollar of value? Definitely not, so what is the multiple to be use to determine value: 2, 3, 4, 5, or +? In my opinion, currently, less than $ 2.50 per share is a boon which will be well rewarded and very soon.
You may tell me that the price is so low because of the risk? Hum!!! Obviously, the next revision of the resources 43-101 will be positive news … so there is no real risk (according to me, at least).
You may tell me that this is the risk of funding ? Hum!!! Maybe we can doubt but after confirmation expected in the second quarter of 2013 according to Storneway then buying price will be substantially higher ... I believe that many investors, just like me, still enjoying the impatience of those who have a short-term vision.
Analysts are unanimous before the revision of 43-101 and financing to come that the present share price should be about $ 2 … precisely, they said price shall be an average of $ 2.10 (and precisely $ 2.05, $ 3.15, $ 1.00, $1,70, $ 2.75, and $ 2.00).
Certainly the funding will also provide dilution with an added value to the project. I am among those who think the added value will be greater than the effect of dilution.
Fundamentals are favorable:
- a good project (Renard) a good company (Storneway) in a positive industry (Diamonds).
- Growth in the short term, in medium term and also in long term for the diamond industry.
- The deficit of supply over demand of diamond from now and this for a long time to come (longer than the life of the mine Renard).
- The expansion of markets in India and China.
- Besides market consolidation opportunities and added value by possible takeover bids.
- The scarcity of diamonds and the time to market of a new mine.
- The safe haven of diamond like silver and gold.
- Expected growth and inevitable higher price of the diamond for years and years to come.
- In conclusion, the significant profit margin during operation will generate tons of profits. And who says making profits also says shareholder value.
So I'm not soothsayer, but if I was reading a price of $ 5, $ 7, $ 9 or $ 11 over the next few years then I will not be surprised. But in return the current low price of $ 1 really surprises me a lot.
I wish the best to everyone.