GREY:NEVDQ - Post by User
Post by
Notgnuon Oct 10, 2021 2:39pm
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Post# 33993626
Ratios >>> It's a funny thing >>>
Ratios >>> It's a funny thing >>>Investors (speculators and the like) often look to ratios, but often they do so in a very bland and not nuainced way.
$220 million total debt loks bad to some people here because they see a market cap of about $150 million. Then they say "oh, debt is way too high" because it is far in excess of market cap.
Then positive feed back happens. If the share prices tracks down slightly more they say the debt ration is atrocious, but when the share price moves up a bity again then suddenly they evaluate debt as okay as a ration to market cap or shareholder equity.
This shows up on algo analysis all the time... it is just a pre-programmed set of ratios but the market (and even many dumb-azz analysts) use them... blandly.
Let's say NCU is back to a somewhat equivelent price to the cost to build the mine and the replacement cost (with debt removed.) Then we get (call it) $800 million for giggles. Take away $220 million of debt and get $580 million.
Make a ratio between $580 million asset value or market cap or equity and put that against $220 million and suddenly, like magic the ratio looks great (without any debt reduction) Fkcckn awesome.
Gotta love ratio's
Cheers,
N