Post by
materialsgirl on May 22, 2015 5:14pm
back 5 and forward 5
When one looks back 5 years at the Income statements, it raises a big question.
What about the next 5 years?
AXY paid zero corp income tax (round numbers) over the past 5 years and it had net losses each and every year. Total losses were close to $45m per year ON AVERAGE. That is pretty bad. Many of the charges were labelled as one time and there were long explanations for all of them. Still, that was the reality of the last 5 years.
I am 90% confident that one of two things will happen between now and 2020
1 company will struggle on and contantly lose money through new one time charges, exchange losses, unexpected events, asset write-offs etc. Losses will be less than $45m per year, averaging $10m or $15m as an example. The share price will languish in the 20¢ to 40¢ range.
or
2 AXY will get its act together and earn real ongoing profits, pay a dividend and outshine other business segments. In this case a 40¢ share today will become C$1.50 to C$2.00 The total return of $1.10+ from today's price will come from a combination of capital gains and eligible dividends
I do not foresee a 50¢ or 60¢ share price in 2020. It will go one way or the other. It will continue as a never ending loser OR it will rise up and deliver as once expected.
I am cautiously optimistic that Case 2 above will be the outcome and so I am staying put for a few more years. Please wait with me. To borrow a promotional line from the gold space; you have been around for the pain, you may as well stick around for the gain.
Mat