Trader It's cheap at 25 not only because it has cash backing of...

Trader
It's cheap at 25 not only because it has cash backing of 40c
It's cheap because we know that cash backing is going to increase further when the BI settlement is finalised. This could add another 2-8c in cash depending on final settlement so that cash discount that makes it cheap now is sure to increase. Unlike the brokers like Macbank who wait for the settlement to occur before thy change valuation , clever people buy before. What is funny is macbank come out the morning if the Ann and increased target price by 50% , problem is they use the previous day's closing price on their report , but anyone buying based on their report would have bought 23-26.5c so some of the gains are already gone. Similarly and stupidly in my opinion they don't include any value or the BI settlement in current valuation in the same way they didn't include the property settlement in the previous one so their upgrades are thus guaranteed to be after the event, and always limiting the gains of their clients. Why on earth these brokers don't place s risked value on the potential insurance payout is beyond me. Say they estimate 40m from BI , you can risk this figure by 50% and count only 20m in your valuation but instead they count zero. This not only makes their targets way off ( Mac bank had 20c until wed) due to ultimate cash but also due to earnings potential of cash . Further highlighting how crappy/slack this research is , they fail to update their cash figures for the June quarter were we are likely to see an 8-10 m increase in cash from operations

The other key reason it is very undervalued , the only time MGX will use funds to buy an asset is if they see a 10-15% IRR , which means they will Acquire asset X for say 300m if they believe it's worth on an NPV basis 450m -550m , so it is possible if they make a good acquisition the SP moves from discount big to cash to premium to cash. As I except cash post BI settlement to be circa 460-490 , it is very possible the right acquisition could see a market cap of 500-600m within a few months which is a SP of 49 -58c

So - in summary it's cheap , low risk ,
Medium to high return buying at these levels. Downside very very limited and upside potential of 50-100% likely . That's a risk reward equation that doesn't come around often