Image Resources (IMA) is the buy of the week in The Speculator column in today's Bulletin magazine.
The buy was actually a top-up: The Spec already had some IMA in his portfolio.
The reasons for the unusual second buy-in are:
1. The low prices IMA is at of late due to tax loss selling. (It's way down off its recent $2.40 high.)
2. The Speculator's view that the company is now a potential takeover target.
He also thinks it possible that there may be a further Magnetic-like spin-off that could benefit holders:
"It was made clear with the spin-off of the second Magnetic earlier this year that Image wanted to concentrate on HMS [heavy mineral sands] on the northern Perth basin. Note that Image still has about six farmed out nickel and base metal projects in WA, some advanced. I shouldn't be surprised if some were spun off in this robust market, with rewarding results for Image shareholders."
More fundamentally:
"Image's shallow depth, high-grade heavy mineral sands (HMS) are without a doubt worth far more than the company's substantially undervalued market capitalisation of $154 million."
IMA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
