It can be a bit tempting to lock in profits sometimes when...

It can be a bit tempting to lock in profits sometimes when something starts on a run like this, but since I'm a fundamental analysis investor, I first ask myself is it still undervalue or has it reached fair value. Personally, I've set an absolute minimum target of 5x PE for the previous half-yearly annualised. Given they made $2.6 million NPAT profit in the last 6 months, that works out to a market cap of $26 million, or 4.1 cents per share. As I mentioned in a previous post, that profit was after $3 million in losses from the sale of excess equipment. So without that the 6 monthly profit would have been $5.6 million, or $11.2 annualised. Whack a PE of 5 onto that and it gives a share price of 9.3 cents. Then there's the potential for any recovery in the industry, which would boost revenue and profits, and probably support a higher PE. You can only imagine what share price that would support (20-30 cents?).

So this all helps me keep my finger away from the sell button