RE:RE:RE:CIBC at it again......EVH,
I did notice numerous 100 share trades every 30 seconds or so from CIBC. But the analyst is a separate issue. They are not necessarily connected to the trading action. Maybe they just think IVN sucks. Everyone is entitled to their opinion.Their earlier $5.50 target more closely matched my own estimate. Once the new mining law was announced, I could understand dropping their target to $4.50. That would be a decrease of 18% based on an extra 1.5% royalty and 5% additional corporate tax. More than that is excessive.The windfall tax doesn't apply at metal price assumptions provided in Company studies. Dropping the target to $3.50 doesn't make sense to me, because it's nowhere close to NPV8 estimates. Net Present Value at an 8% discount is a fairly stiff target many mining companies fail to achieve. Yet they receive high valuations regardless.
Also, remember this is a short term target price of 12 to 18 months. And so far they are on target. Yet it does not necessarily reflect what someone would offer to buy out the Company. A $3.50 target corresponds to a market cap of US2.15 billion. To me Platreef, Kipushi, and Kamoa-Kakula all together, would be worth more than $2.2 billion for a potential buyer. I think IVN could do a lot better than that.
I'm not accusing the analyst of manipulation. I just think that as a valuation it is unrealistically low. For me, long term buyout potential is crucial to arrive at a fair valuation. RBC, TD, and BMO have all provided NAV estimates that more closely match NPV8.