Last week one of our most informative posters stated in response...

Last week one of our most informative posters stated in response to a positive review in Australia's leading financial paper,

"OMG another 15% upside next week?"

This made me instinctively nervous and pessimistic about RQL's short term prospects. Understand, I am not talking about the company's prospects which remain outstanding, I am talking about its share price prospects.

Since this post which I think was made when the share price was at 72c, instead of rising 15% we have dropped nearly 20% which is a crash of sorts.

Why?

I have no idea. It could be any of a multitude of reasons. Profit taking, pessimism on the short term outlook of the market, Portugal's chance of default, fears of the company's ability to accommodate rapid growth opportunities... this is of no real interest to me. I honestly couldn't care less. I will leave the speculation to the day traders.

What I am confident of is that nothing material concerning this company has actually changed. Revenue for the first 4 months of this FY set consecutive records. All of our top shelf management remains in place. Prospects for growth remain outstanding. RQL continues to provide a service to mining companies which not only does the job more efficiently than they can do themselves, it allows them to get on with the business of mining.

Why am I posting this now?? Profit from folly, do not participate in it. I have fair value for RQL at just under 70c which would currently provide a margin of safety to buyers of just under 20%. This is a great business with incredible growth prospects. See this current depression in the share price as an opportunity and be greedy whilst others are fearful.

Resource Equipment Ltd is a buy and is currently selling at a bargain price.