I tend to agree with you on at least some of your narrative. Just last Month SQM posted net income of US$3.9 billion for the 2022 year which was a 300% increase on its 2021 reported net income of US$585.5 million.
And that was on total revenues of US$10.7 billion , which was substantially up from the US$2.9 billion they reported in the 12 months to 31st December 2021.
So all this considered prior to Friday's drop in their SP , SQM had been trading on a PE ratio of around 5.7 times earnings post these numbers at the beginning of April 2023.
So I would say that Sayona is still at least a year or more away from commanding anywhere near this sort of multiple . Having said that though , it wouldn't be out of the ordinary for this multiple to be trading ' come ' growth in a stock with a higher multiple based on forward expected earnings which could then effectively grow into it by potentially being cut in HALF when actual numbers start to trickle in. So effectively now as we can see , the SP behaves in a manner which ascribes these HIGHER market interpreted earnings ratios , but when the actual earnings comes in , the PE ratio's actually drop while the SP more or less trades in the same range. Perhaps this is what the Market is effectively ' Contangoing ' in at the present moment into the expectations but also hedging itself to the contrary. Certainly there is enough uncertainties which would keep investors held in this range bound conservative approach to trades verses valuation.
And certainly the retail broker numbers recently released on the forum would suggest that it is the heavily back retail aspect of the holders like Comsec who are net neutral in their large volumes traded. - ie they are both buying and selling in accordance with a well planned out strategy of making money on BOTH sides of the market. Clearly at the same time there was evidence in that same broker report of a least a couple of BIG insto net Buyers as well as a couple expected net sellers like Goldman's who were obviously sitting at the bottom of that report.
So there is still a lot of uncertainty for a stock which still already has a lot of uncertainties pervading through the recently updated DFS document. So I disagree with Managements comments that the NAL project has been completely de-risked at this stage. And for numerous reasons.
Bottom line is that I would expect the ' Market ' to take a continuing conservative approach to ascribing a value here . At least for the time being anyway.
Its still a Buy at these levels for me , but one that I expect will still deliver potentially lower entry accumulation's and patient holding from there or here before rockets. If you look at Frontier's combined spod / hydroxide PFS from 2021 which was arguably conservative as well , you will find that they have NEVER traded anywhere near their NPV based on those conservative numbers. And recently you will even see that they have been whacked in the last week alone falling 2.56% and over 40% in the last year as well. And all of this off the back of MAJOR upgrades in both quality and tonnage , this year and last at their Trifecta of high quality Ontario lithium projects.
So yeah , its going to take something very special and unique to lift this SP back into the 30's where I personally think it should be. Its just its going to be longer than I would have expected. Happy to hold my position here given my exposures to metals and commodities elsewhere.
... reckon if I posted that comment I'd be drawn and quartered. It's a solid Hold for me.
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