One or two posters were recently very bearish on both Minbos and the small cap sector as a whole.
Availability of cash for small caps with these higher interest rates was given as one reason.
IMO those calls were way too late. Maybe they also made similar calls a while back, but they were flooding the threads here with those views probably at both near the low and at the very bottom of both the small cap sector and for Minbos.
For anyone that might want a more experienced view on that subject, this fund manager (link below) thinks it's time to start buying into the small cap sector, not look for more downside. The market is forward looking. Sometimes more forward than we expect. After recent predictions that lithium would be in surplus in 2024 and 2025, I thought I might be able to buy some lithium producers at much lower prices mid next year. Just a few weeks later, I'm starting to think I've already missed that boat. It could still be a dead cat bounce for lithium but I have my doubts now and I'm very glad I didn't short recently looking for lower prices next year.
One thing I am much more confident about is that this will not be a dead cat bounce for Minbos. The macro environment has not changed permanently and is very likely to be bottoming already, ahead of improving early next year. After MNB's update yesterday, particularly the very strong increases to production guidance for the first six years, the repeated statements regarding strong interest in the green ammonia and construction starting on the phosphate, I think we are at the start of what will be at least a 100% sp recovery - just for starters. We have had a number of 100% or better recoveries over the wild sp cycles of the last four years.
From this low a price, I think it's more likely we are set to see our third quadrupling in the sp from a deeply corrected sp, over that four year period. If the company delivers on its guidance, it should also be the last time we see the sp pull back this hard after one of those big rallies. The strong forecast cashflows should prevent that. Now it's up to the company to execute. Despite the delays to date, I have confidence because the project is so compelling both economically and for the country.
The project is now lined up to start construction just as the small cap sector is recovering off an extreme bear market low. The timing looks compelling which is why I had been buying again, before that very strong upgrade yesterday. Sometimes it pays to look forward.
That upgraded guidance has certainly added to my confidence and also to my short term sp targets - in a big way. My reasoning for much higher targets as posted yesterday.
We should be set for a fantastic 2024 after probably finishing 2023 around even.
https://www.livewiremarkets.com/wires/matthew-kidman-s-top-ideas-for-a-small-cap-recovery-in-2024?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Wednesday%2020%20December%202023&utm_content=Trending%20on%20Livewire%20-%20Wednesday%2020%20December%202023+CID_6cadfcc8b5e318f21870e331ce3e8df8&utm_source=campaign%20monitor&utm_term=WATCH%20%20READ
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