Saturday, January 28, 2012

6-month checkup

Let's see what silliness I was talking about in July 2011 ...

SHG (Shanta Gold) I quite liked at 23p, now 25.51p - handily beating the index. It's only recently that it has been beating the index. I wrote:
"slartybarfast" estimated that at 19p, the market cap of SHG is £50m. So, that puts SHG on a PER of about 1.5.
That would put it on a target price of 127p. Other back-of-the-envelope calculation suggest it could be in the region of 100p. The price of gold has gone up since then, and we should be much nearer to actually pouring some gold. End of 2012 Q1, if everything goes according to plan. Processing had already pushed back plans from end 2011, so any delays could scupper the share price short term. They have backup finances in place. I'm bullish on this stock, and I hope to see plenty of action out of this one. Fingers crossed!

I also liked PIC (Pace), which has declined 21% over 6 months, underperforming the indices significantly. I'm such a glutton for punishment on that dog. The share has been gaining momentum over the last month, and trades on an abysmal PER of 4.8. Non-exec Chariman Allan Leighton has made changes at the top, and looks like things are now heading in the right direction. I'm still expecting to see good things out of this one, despite the rough ride shareholders have faced in 2011.

ACHL (Asian Citrus Holdings) - the AIM company that runs orange plantations (we hope). I was downbeat on the company then. A lot of the profits come from revaluing its biological assets. Fair enough, but in common with a lot of these Chinese type stocks, cash flows are significantly below reported profits. Far too iffy for my liking. There was also some funny business involving related parties. ACHL seem to have parted ways, causing the share price to bounce. It hasn't helped long term, as the share price is down 33% over 6 months.It's on a PER of 6.8 and PBV of 0.6. The number of shares in issue has shot up again. I still wouldn't touch this one with a bargepole. I know I'm going to attract a lot of hate from the ACHL bulls for saying this: but I still think this company is uninvestable junk at any price.

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