RE:RE:RE:RE:RE:RE:More good results: 21.9% and 18.7% CoWell, good morning to all. More comments. First, let's get one thing clear, I am not "in love" with LIC. Remember the old adage, never fall in love with any stock. I am, of course, deeply attached to my money, like all of you, I imagine. So, I don't invest to lose money, I invest to make money. So, taking emotion out of the equatin, as much as possible for me, I have to look objectively at LIC as an investment in the junior resources market (which is highly risky by nature).
Some people here, by the way, have a lot invested in LIC and get angry when any contrarian opinions are presented. First, grow up, no one cares if you rant like an upset child, try to offer some value added comments. Saying things to make you feel better won't alter the investment picture.
Okay, enough ranting. After taking some time on the weekend to review the LIC picture, LIC continues to be a most compelling investment in the junior resources sector for both cobalt and lilthium. The drill results have been consistently good. One poster commented that the drilling could have been done at an angle and do not represent true widths. Fair enough, we are told that in the news release that these are not true widths. So what? Let's presume that the geologists are drilling to prove up the $100 million in the ground, we can assume that they are drilling with a purpose in mind. What would have been negative is if those same drill results produced poor results, and they didn't - the results are very good indeed.
No, the only thing that comes to mind for holding back the share price is the insider sellilng. Now on Canadian Insider, Tim Cyril Fernback, CEO, sold 200,000 shares on Dec 9, 2017 for around 0.18/share:https://www.canadianinsider.com/company?menu_tickersearch=LIC%20%7C%20LiCo%20Energy%20Metals. The next news release is on Jan 3, 2018 and a clarification is issued on Jan 4, 2018.
So, the only draw back I can think of to this otherwise great story is the insider sellilng. That's it. There are all kinds of articles on the internet on whether or not insider buying/selling is a buy or sell signal for the market. However, we have to consider all of the insder trading requirements as set out by the various stock exchanges. Here is another catch, I am not familiar with the CSE's requirements for insider trading and so I cannot determine if the timing of the recent insider selling is a bad signal. As stated in a prior post, if management is going to befuddle you then they will find a way anyways.
Okay, my bottom line, and my opinion only and it is highly subjective. One method used in horse racing handicapping is to develop your own morning line for horses in a particular race and then compare your odds you have developed with the other horses in the same race. So, if the morning line odds (calculated by the racing secretary for the local track) are say 3/1 for a horse you like and your own calculated odds are 2/1, that means that the betting public thinks your horse is worth 5/1, those are its odds of wining. But let's say you feel the horse's chances are actually better and it's real odds should only be 2/1. Well, this means that you think your horse has a better chance of winning than does the general public (the racing secretary calculates the morning line on what he feels the general public will bet, not on what the racing secretary feels the odds of that horse winning are - a big difference for you horse racing punters to know). So, you bet your horse because you feel it has a 2/1 chance of winning whereas the public, or market, is paying out 5/1. And you wiln, you get 5/1 for a horse that should have been paying only 2/1, in your calculations.
Okay, all of that to say this. The horse racing odds making practise has to be done in reverse for the stock market, but don't worry about this. Here's the bottom line: I feel that LIC's price is undervalued and it is worth to me (again, this is my opinion only) 0.30/share. How did I come up with this outlandish figure. Well here goes: 1) closest "horse" for comparision is CPO, currently trading at 0.54 per share - LIC's drill results are better than CPO, more and better drill results than CPO, and already has an infrastructure in place. LIC has more dirll results on the way and CPO has been silent on its drill results. 2) subtract 0.10/share for inexplicable and possibly suspicious insider trading. 3) subtract 0.10/share for outstanding number of shares compared with CPO, although, if LIC can prove up the $100 million in a hurry, there shouldn't be much more dilution.) subtract another 0.04/share as a conservative factor, better to under value than over value and voila - my subjective value is 0.30/share for LIC.
So, after reflecting on the insider selling in December, 2017 (and the optics suck, that's for sure), I can still say, in my mind, that LIC is worth to me around 0.30/share. I am not trying to convince you to buy or sell, that is for you as mature adult to decide. I am not trying to comfort myself as well, I could easily sell tomorrow and re-invest somewhere else. My own risk/reward ratio is that a junior resource stock must be able to provide a 3x to 5x or more return on my oriignal investment. At 0.15/share, I am up already by 50%, so how can I complain? Also, the time frame is subjective, it must be based on various factors such as drill results, signed deals, announced deals, and potential deals. Think of it this way, take the investing game as a challenge, it is a chess match, or horse race between the investor, the management of LIC, and above all, the market, that is, fellow investors (that's you). So, I am in and sharing information and besides, it is a good way to reflect on the stock and the market. I think we will see 0.30/share within 12 months. At that point, I will sell half of my holdings. If we don't see 0.30 in 12 months, then I will sell off my shares (with the exceptional reason of a general market correction).
Enjoy your day.