Long time, no argue with! My views are still on the opposite side to yours. I see these as a good punt somewhat similar to Capral which have just risen in recent months from 14c to as high as 35.5c on a result not much better than break even. Everyone knows that it is a very tough time for our manufacturers and most, including Penrice, are valued at a fraction of their asset backing and of their annual sales. But it is not as if Penrice are losing a fortune and going broke.
They have had a shocking run and much of it is not their fault. Certainly there are a few internal things that I am not happy with. I think the treatment of schist was deceitful and close to fraud and they still don't acknowledge that having this as a current asset is a horrible joke at shareholders' expense.
But ignoring the so-called profits derived from schist, this company is running around break even when faced with a dollar screaming above parity and energy prices well above average because of middle east instability.
Like Capral this is one of Australia's main remaining manufacturers and governments are not going to rush to close it down. Quite the contrary, I think governments will be doing what they can to protect our remaining manufacturers. Australia won't always be so reliant on iron and coal and when those days end, it is companies like this one that will look ridiculously cheap.
That is of course, provided they get through. Yes, there is risk and particularly with a dated and rusty soda ash plant, but for me the risks are worth it. No-one can build a Solvay plant these days because of the huge costs involved and the complementary raw materials required so Penrice have the game pretty much to themselves in the southern hemisphere while they remain standing. These are the stocks that can provide a ten bagger when circumstances change and I think its worth the punt.
I pretty well doubled up my holding as these fell from the thirties to the low twenties so I certainly haven't walked away from this one.
GPASAS
PSH Price at posting:
26.0¢ Sentiment: Buy Disclosure: Held
