this thing used to trade at $ 9 a few years ago and people got burned. There are no institutions holding this. The 40 % insider ownership means that noone can do a hostile bid for this company. Insiders are probably sucking the cash out of the co
They processed 37.8 tons of gold in 2012 and they will process 50-60 tons in 2013. That's 50% more. Earnings for 2013 should be 90c or more per share. Stock Price should be based on forwarded PE, so even at 5 PE, SP should be 5x90c = $4.50 today, at 10 PE should be $9.00, at 15 PE should be $13.50. 1st quarter of 2013 will be very strong.
agreed. one way management can convince investors is by issuing dividend. XIN was trading around $2-$3 range until a few weeks ago when it went up to $5. hopefully, the same thing happens to KGJI. i'm holding it long term. Market cap is only ~$80 million, but revenue/quarter is $900 million. stock is too cheap
This was a comprehensive 10K .
1. Insiders paid $1.80 per share for additional stock after the year end.
2. The book value per share of is almost entirely gold inventory and cash. We are paying $1.35 for $2.97 of gold and cash.
3. The leasing deal with the banks removes the need for more share issues to finance growth.
4. I doubt we see eps of 90cents in 2013. A 30% increase in processing will not directly feed thru to 30% increase in eps. Remember, more shares in issue and interest on the leasing deal. Last year we saw a 26% increase in processing and 15% increase in eps. Surely we see at least 70 cent based on a conservative increase of 15% again.
My feeling is that the stock will gradually appreciate to sell at book value at around $3.00. An increase of +125% from current share price. Below that price, we are buying gold that is earning 20%+ (gold bullion earns 0%) and we are paying a discount . At that price the stocks is selling at PE of 4.3 times, which is very cheap and allows for any discount you want to apply for the chinese phobia.
They state quite clearly in their 10K that they are still growing rapidly and dont aniticipate paying a dividend in the forseeable future. Why would they? If they start to generate excess cash, surely share buy backs is more effective use of cash?
I move from my previous neutral to buy. I need to see a couple of quarters of growth in the investment gold business to move to strong buy.