The key to NGF is the AUD POG, its ability to ramp up production and to lower average costs. I am betting this will turn out fine, and I note that it is operating profitably.
I am very comfortable with NGF's balance sheet. It is after all a 19 cent a share company which only started about 2 years ago and not a hundred year company like Burns Philp. NGF does not seem to have any Goodwill component to its assets, but it does carry some assets that will be written off in time against future profits (thereby lowering its tax payments).
NGF's management/directors appear to be taking a conservative approach to their own remuneration (in terms of cash remuneration), and some of them have considerable skin in NGF and have far more to lose from its failure than pretty anyone else. That is something I like.
I totally agree with you that NGF has significant risk. Offsetting that is the prospect of very signficant upside. I like the risk/reward for this investment. But that is just me, and there is no reason why you or anyone else should follow my judgement.
I hope you have a lot of success in all your investment.
loki
NGF Price at posting:
19.0¢ Sentiment: LT Buy Disclosure: Held
