bought 30,000 of them today, page-8

Haha that old chestnut.. yea same boat here, I got in at 27.5 cents. I want to average down as well but first need to consider a few things.. I'm tempted to wait a little while and that might mean missing the start of the next run up but we'll see...


1. Tin price chart is for the last 5 years can be found at http://www.indexmundi.com/commodities/?commodity=tin&months=60 .. It shows a steady downtrend for the last 15 months from 32,000 to 20,000, no signs of breaking.
2. The share price of the company appears to be going no where fast, having gone roughly sideways since the GFC broke (mar 09), with shorter term ups and downs. It's important to note it's currently in one of the downs.
3. On my calcs the company turns over about $80k per day in liquidity - this is below my threshold of $100k to purchase, but I still like them, and am willing to buy.
4. Ignoring that, I have them on $76mil cash (?), at an MC of $190mil and a yearly NPAT of $80million, I can't see any capital raisings anytime soon (barring the unexpected).
5. Their PE ratios are ridiculously good, with such a high income (about 30% of equity returned per year [RoE]). They sit at 4.8, 4.8 and 5.4 for this year, next and the year after.
6. Their forecast growth is not so strong however, with 24% over the last 5 years (avg) but -32% over the next 2. This might be why the market is valuing this company so lowly - they are clearly going through some issues with maintaining their cash flow right now.
7. According to my Discounted cash flow, I value them at $0.35 based upon current earnings. Way more than their currently.

So, in conclusion... MLX looks to be very very positive, but the dropping of the tin price combined with the share price going no where - both of longer term trend lines - will keep me from buying at the moment. Like I said, this might mean I miss the first run, but they're definitely on my watchlist and I still hold. When the market finally wises up to their value, I can see this easily at $0.35 to $0.5 based upon current earnings.

I will probably average down around September ish. That's my intentions at the moment anyway!