Well this is a true HC success story. When I joined HC, after years of taking broker advice that turned out to nothing but duds, I confess I was apprehensive. But in retirement, with banks looking toppy and few other areas in blue chips looking promising I did some work on HC and picked out four small stocks based on commentary and my own follow up research. One of those was AJX. Another was YOW. Forget the other 2. I confess initially I was sceptical, but as the weeks have passed my confidence in AJX grew. When they did the placement I honestly thought they might bounce. Instead they fell into the forties. But by then the news flow was adding credence to the HC speculation.
So I added to my holdings significantly and went slightly overboard. I should have taken some trading profits in the seventies to rebalance but I was persuaded by the TA of a gap up through 80c leading to $1.00.
I should probably take profits here, given it is now 1/3 of my portfolio. But easy come easy go. In my past I bought Microsoft shortly after listing and sold out for a 50% gain. I need a calculator to work out what I left on the table. I bought into Racal when it was capitalised at $2m. I sold the following week. It now owns Vodaphone.
It's very easy to see your profit and sell. But as a couple of comments today have said, firstly few people outside of HC know about the stock. Secondly this is just the beginning. When the bedding people roll out beyond one product line to several, and globally......Pintahoo is right. It alone justifies the share price and some. Add in military, home furnishings, motor vehicles....unless someone else is out there, which is unlikely given the protracted military build up, we are talking about a business with potential to be a $2bn business. And apart from an issue to accompany a listing in the USA to add credence and balance sheet, the risks of it not succeeding seem modest now.
Of course our famous instos will only be able to start buying once there is evidence it is being paid money. My guess is we might creep to $1.20, hang around, and the post listing in USA as the news flow builds, we might be shocked by another massive gap up run as instos join the party. By then we should be joining the ASX300.
Be warned. As soon as it joins the ASX200 I'm a seller.
As a warning to myself not to take profits, and because I liked the news, I bought a tiny parcel instead at 97c.
AJX Price at posting:
97.5¢ Sentiment: Buy Disclosure: Held
