sp recovery

What happened to the CDU SP 2 months ago is now water under the bridge but despite the cornerstone investor and despite an extremely upbeat presentation of the facts by the company the share price is once again on the slide. Even $2 seems a distinct possibility.

To put a dramatic light on our predicament compare BHP's 2010 results to CDU's likely future potential.

BHP
Earnings per share $2.28 (after tax)
Current SP $41.50
Price to Earnings Ratio 18.2

Info extracted from BHP published accounts

CDU
Earnings per share $1.93 (after tax)
Current SP $2.25
Price to Earnings Ratio 1.17

Earnings based on WM statement in video presentation of 60,000 tons of metal per year (for first 4 years at least) at current copper price AUD$8450. Less operating costs of no more than $100 million (very conservative but a nice round number). Less tax at 30% leaves $280 million. Divided by the shares on issue of 145,412,643.

Now we all know that this is not comparing apples with apples BUT they are both fruit and therfore the price to earnings ratio is a very good 'lowest common denominator'.

So, assuming the market is at least as well informed as members of this forum why would you be selling at $2.50 when a hugely discounted CDU P/E ratio (compared to BHP) is anything less than say - half the BHP P/E ratio - 9.1.

Such a ratio results in a CDU price of $17.56? Or have I lost a decimal point somewhere?

I know there are shorters out there but every stock has them
I know there are churners out there with an agenda
I know the company has a huge credibility problem
I know the SP is erratic and would deter even some heavy risk takers
I know there wont be money for dividends for 2-3 years

But to sell at $2.25 with a P/E ratio of 1.17 is simply ludicrous.

AND to add insult to injury none of this takes into account

1 The native copper issue (only an upside here)
2 Wilgar (Rocklands may not even be the main game)
3 Southwest annomally

This is definitely a stock for the long termer.

Please DYOR