Takeover bid is unlikely. Firstly, PAAS is too big (acquiring company should be in major category). Secondly, PAAS is too specialized (some mines do not present interest for a PM major company). Thirdly, PAAS management doesn’t show signs of tiredness (CEO is very young). Finally, PAAS doesn’t present overwhelmingly undervalued case (it is undervalued if/when operating problems are resolved).
On the other hand, I strongly agree with your point about commodity price. It is very positive (strong increase in silver price) and it will be inevitably reflected in stock price. It takes time and some patience and some management actions.
Hmm im not sure about PAAS not being a takeover target. Its not that big!
Say at $35 an oz in 13, it should make $2 EPS, at a conservative 20 P/E you will get a sp of $40.
Then you have the half a billion in cash,. So in my opinion its a good play.
What I think is most important is that i am almsst certain they will hit their top line and their eps for the 4th quarter, which will be 3 straight quarters of EPS growth.Giving the MGMT a serious shot in the arm of credibility.
Barring a massive collapse in the price of silver (which I cannot see happening, fiscal cliff, china turnaound), we should be looking at $30 a share by Jan 15th 2013
I am closlyl watching the BIG resistance point in silver at $35.We are currently under $2 away from this. if it goes through this resistance point, we are up up and away to $40 and PAAS will go nuts.