Hi Rocket As a holder of both GRR and FEX I fully agree GRR is a much saver bet and more future proof. However FEX is performing admirably with so far some great management decisions. If you are risk averse certainly go for GRR however don't expect this company to ever put share holders or growth first. If you are happy to take more risk FEX could be good bet and has significant up side potential at current earnings and I wouldn't be surprised they will use their cash to acquire new lucrative projects. whereas GRR seems to prefer sitting on piles of cash, with the only exploit being the failed housing project....which is a real shame as there will be more demand for top quality Iron Ore (pellets) and there are plenty of magnetite projects in Australia that could use the know how and some cash of GRR to get into development and create more value for SH... Man I would be all in on this if they where a bit more aggressive on the growth side!
Don't get me wrong, the numbers stack up and it is amazing to see the price at the moment (so undervalued!) while in the middle of an IO boom with GRR almost certainly going to report an absolute record quarter and matching dividend.... But I can't help it feel they could have been much further if they had for instance developed SD. And if the past is any guide they may simply fall back to much lower valuations once this boom if over, pile of cash or not. As long as this cash doesn't get paid out or used for increased profits it has no value for SH.
I don't think FEX will be sitting on the significant amounts of cash and do nothing....
Just IMO.
GRR Price at posting:
52.0¢ Sentiment: Buy Disclosure: Held
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