how to put a rocket under the share price, page-10

AFG has had a nice little run from $6.60 to $7.98 recently, so it is no surprise that a bit of profit taking is going on today.

The rocket was indeed put under the share price due to Fell and Coe, under pressure from shareholders, wisely agreeing to lowering the Rubicon price. Rubicon is potentially a very valuable asset for AFG, and I'm personally satisfied that the new price, while no fire sale, is nevertheless reasonable.

Fell and Coe realised (as I pointed out to them via Christine last week) that they stood to make more money by lowering the Rubicon price because they would benefit from a rising AFG price. This is indeed happening.

Once the profit takers have finished, I see a pretty clear run to around $9.20 over the medium term.

While AFG's fundamentals since the August sell-off have always been excellent relative to its share price, what is now starting to drive the share price is that the market is beginning to 'decouple' AFG from US sub-prime sentiment.

Once (and if) the US sub-prime issues have been completely neutralized (likely by Q2 08), I see AFG recovering to around $14 over the next 9-12 months. I'm not alone in thinking this.

This is why some are starting think that AFG just might be one of the ASX200 top performers for 08.