Yeah it's an interesting situation. On the one hand, you have brokers expecting 65-67 cents by 31/12/2018 yet on the other hand, we won't be expecting a dividend until at least 2021 so quite a lot of "investors" won't even look at BSE because it isn't providing a "tangible" return, nor is it part of an industry with lithium or blockchain type potential.
It's frustrating to see it so undervalued but if management continues as they are, then there is every reason to ride this stock with no intention of selling.
Personally, I believe the market is inefficient via the over-weighted emphasis on short-term returns. People (including myself) check stock prices daily and despite saying they're in it for the long-term, they are sub-consciously priming themselves to crave that short-term spike. Additionally, you've got the majority of people picking managed funds and superannuation funds based on 1,3 & 5 year performances as opposed to their investment philosophy... So instead of these fund managers looking solely for the best long-term prospects, they need to prop up their returns so they are more attractive to the general consumer.
Base Resources, in my opinion, is a classic example of a good long-term bet that doesn't satisfy the wants of your general/mainstream investor... despite the fact that it satisfies the needs!
Based on this, as stated in this thread, it may be some time before the market realises Base for it's value and therefore we may not receive gains (unrealised or realised) before an undesirable market/industry/business correction... But i choose to look at this
As a business, Base is very efficient and good at controlling costs. This will assist them in an economic downturn... which could in fact be a blessing in disguise as only the best will survive leading to a larger market share? The fact we are significantly undervalued also mitigates risk.
As an industry... it is a linear one. The mineral sands is made into stuff... until they make things out of thin air (3D printing still needs materials)... then there is a business for mineral sands.
I am quite confident in BSEs prospects and whilst I'd love to see the share price reflect the value I see, if things continue as expected (including speed bumps on the way)... we can use it as an opportunity to stock up more
BSE BSE BSE
BSE Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
