ZFX zinifex limited

what price will zfx be on monday, page-14

  1. 3,698 Posts.
    I don't think there is much of margin on zinc production.
    A small change will lead to a massive change in profits.
    For conceptual purposes look at it this way...
    Revenue $400
    Costs $350
    Profit $50

    Drop in price by 7%
    Revenue $373
    Costs $350
    Profit $23

    Over 50% fall in profits

    If price and value are in one to one relationship then a 50% fall in profits plus possible cost blowouts down the track may mean a big drop in the share price.
    However one must also factor in sentiment and crowd mentality.
    This could either hold the share above true value or it may even push it below true value.
    Up till now sentiment toward resource stocks is supporting the price above true value, so what you might find is only a small drop in price.


 
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