Is this an undervalued stock?, page-18

Agreed liquidity is definitely a short term thing, any positive news will drive it.  Liquidity is a two way street, buyers attract sellers and vice versa.  I am sure there are LT holders, with half decent holdings (as opposed to the sell orders on commsec) who I think  would only sell out if there was a half respectable offer on the table from a fair value perspective.  Note many holders are likely the ones who got in at .15 to .05 etc, hence, right about now, .01 is already a right off so no point selling.  Based on the last financial statement, taking it on face value, fair value is anything between 2c to 3c (16m MC), you could argue potentially higher if you factor in the the 20+ mil war chest.

In respect of the silence, management simply has nothing concrete to announce at this stage and IMO simply buckling down.  The SP I do not think worries them, otherwise, they will create a lot more noise with meaningless announcements.  In my mind, it is actually trying to understand what they may have scheming.  It would not surprise me that any potential acquisition is neither a vertical nor horizontal acquisition.  My rationale is given Centrals specialisation, now is the wrong time to expand unless there is some absolute desperate operation (in todays environment they probably come with a sheet load of baggage, ie. debt).  If they do, there would be gtee revenue as evidenced in previous announcements.  It may potentially be a complete diversification play and loosely tied back to synergies of existing operations. I think they will retain the Centrals core business to be perfectly poised for any turns in the sector (it may be a war of attrition for them, competitors are heavily in debt, survive the worst and as the few reamining you will get new contracts on profitable terms).  Worst case scenario, this is a cashed up shell operation.  Interestingly, Lightspeed lent them money at some stage, which has now been fully repaid.  Lightspeed seems to have funded a few mining services operations, Bradken (I think it was them) is/was one they are heavily invested in.  Perhaps the owners are now looking to flog this operation off to someone, given they hold the majority of shares, SP is not an issue in this situation as highlighted above if there is something else going on.

Captain raised a very valid point around a tightly held stock and how the rewards can be distributed in a way not beneficial to holders.  Your concern is also very valid.  Ever since I got into this, both your points have played on mind, but was waiting for this to play out a bit.  It is a potential risk, but I am staying firm knowing it is unlikely anything untoward will happen in the short term based on the fundamentals.


I will be doing some digging around over the next week, will share if I find anything material and/or worth a second thought, good or bad....