Mr B,I would buy AGM but it would have to go much lower. The...

Mr B,
I would buy AGM but it would have to go much lower. The nickel outlook has worsened according to respected base metals analysts. Look at the LME stockpiles growing alarmingly. Now 42,000 tonnes sitting in LME warehouses.
The only risk for AGM is the price of nickel and it is an ever increasing risk. If the analysts are correct and 2008 sees nickel at $8 per lb or less than $20,000 per tonne, AGM will make no more than 50M NPAT in 2008/09. That is EPS of 6c. A generous P/E of 8 in a bear nickel market would value the stock at 48c. This does not allow for additional discoveries but if nickel gets smashed, sentiment will drive all nickel stocks lower. Fundamentals will be ignored.
Also remember it doesn't really matter to AGM management if nickel goes lower as AGM will still be profitable and so long as it's profitable, they will continue to earn big salaries. In their eyes, AGM will be a success even at 48c if it's producing. Investors might think differently.