Ready for the Next Leg?

Have known about this company for many years but never followed it closely.

I was actually eyeballing it at .8c just before the massive move to 5.9c back in Jan/Feb of this year – and then kicking myself for missing out on it.

Anyhow, I’ve continued to keep it on my watchlist in the belief that once the traders made/lost their money, there would be a bigger game playing out. That’s part of the reason I finally entered the stock last week.

Following is my thought processes for those who care:

• I have never seen a stock move 700% in a month yet generate so little interest from HC - a big positive IMHO.
• The company may have ˜4Bn SOI, yet the top 20 is probably sitting on 85% of those, meaning the free float is very low.
• No doubt the German listing and promotion was behind the move in the stock; yet, following many years of restructure, the company seems to have well & truly found its way. It’s cashed up, cash flow positive and, assuming their business model works – which does seem to be the case; is very scalable.
• Assuming we are in an extended bull market for commodities, ASP is a “picks and shovels” entry as both investors and companies in the sector seek an outlet for relevant information.
• Two of the 3 largest shareholders – the father and son team of Andrew & Alex Kent - are directors and the second largest holder, John Stark, is a former director. Another director, Geoff Donohue was sitting on about 2.7% of the register. In other words, those in the know, have plenty of skin in the game.
• Tom Klinger is also a substantial shareholder with over 6% of the register. I suggest you check out his background and the people he runs with. I also assume that it’s his daughter or daughter-in-law who recently became a director.

Those are some of the fundamentals. And it seems as though the technicals are starting to confirm that the stock is ready for another leg up.

Last week was the highest weekly close since the week of 19 April. Similarly, volume was the highest since the week of 1 March.

At least technically, the stock may have a little more work to do between 3-3.3; following that I see blue sky to 3.7/3.8 and from there I wouldn’t be surprised to see it launch an assault on its spike high of 5.9c. A break of that high could see a move to the 8-10c level. The downside is potentially 10% from current levels.

What the catalyst/s for such a move may be, I have NFI. However, the screen is talking, the chart is talking, the Germans have deep pockets and there is some very smart money behind this stock.