I agree that AZG is likely not even on the radar of most.
If they perform to expectations, they are an absolute bargain. Forge was priced at a similarly ridiculous level relative to forward earnings during the GFC. Investors simply aren't willing to take any risk and so companies like AZG get thrown out - from here its all about delivering strong performance.
Having said that, there are risks, as there are with all companies & all mining service companies - poor quoting, poor project management, project delays due to capital markets/commodity markets, excessive leverage, and the risks go on. Its not a risk free investment, but at these prices I'm happy to take the risks.
AZG has forecast $16.5 mil NPAT for 2012, against a current market cap (at 14 cents) of roughly $42 million - so a forward PE of around 2.5. In addition, the $16.5 mil forecast does NOT include the upside from the NFC contracts - these provide enormous upside to 2013 financial performance and onwards.
Exciting potential, but a moderate level of risk, it's wise to listen to common wisdom of not putting all your eggs in one basket.
AZG Price at posting:
14.0¢ Sentiment: LT Buy Disclosure: Held
