fosters stockbroking, page-13

Can't explain why AZH has been targeted however they are not producing CF nor are they close to production. AZH are simply a prospector/explorer (with a lot of potential) that are putting holes in the ground and building a reserve. I think we might have all been a bit naive to think the growth seen by AZH was sustainable (especially in the global economic conditions) and let’s face it, this type of stock is highly volatile.
A little off the point but all the same gives a broader view....a while back I read something from an IB regarding Newcrest. It was talking about how with miners, the NPV is the best tool for valuation due to the finite value of in ground assets against CF in perp. for industrials. Newcrest traded as high as 2 x NPV recently however over the last 3 months it has been jumping around close to the NPV pin value of $21.50. This particular IB suggested that any day of the week you would buy at this price however suggested you won't get it....how wrong they were. May not have got NPV but 1.1x seems to be the range which is close enough…just goes to show that these guys can get it wrong and are sitting there thinking why has a organisation like this not moved from a 1.1x multiple. Draw a parallel to us individual investors?
I guess what I am trying to say here is azh had a great run, the profit takers bailed, shorters took over, there may be a more sinister force pushing it down for a reason I don't like to mention, and of course the volatility in global economies and general lack of confidence of investors. All these have seen it dive back (which had to happen IMO) to a level which is unjustified. The charters will say we will soon be back to where it all began.
You will have seen in my previous posts this is a long term investment for myself and it is frustrating (ball breaking a better description) to see it dive back to where we see it however, positives are on the horizon and we all need to realise she won’t be back at 99c anytime soon. All they same in five years time……who knows!!
POSITIVES……We have a solid initial resource. AZH plan to pump out drill results in H2 2012 to drive the resource to a greater level. A listing on TSX which will open doors as this resource grows. Hopefully in H2 2012 we see some resolve and synergy between EU members to offer something greater than what they are offering at present. Finally, when we seem some of the bigger guys like Newcrest moved from their current SP levels, we might see AZH creep up IMO.
Keep positive and hold on…..the longer term the better IMO. As I said the other day…..she is cold as ice but like the seasons, spring/summer is looking good.