Seems the market has settled after the "modest" half year results. There is no doubt the drilling sector is on the move with Ausdrill a 7 bagger from earlier this year and Imdex had a large successful raising today at a price three times higher than earlier this year. BLY are a much riskier investment because of the very large debt but drilling is certainly an industry where money can be made quickly, and BLY are the largest player. A market cap of $100m is not an equilibrium size for a company as large as BLY. They will either go to $0 by Centrebridge losing their nerve/patience and selling off the company or BLY will get back to profitability as part of the next mining cycle and return to $1b market cap. Of course even if this happens there are likely to be capital raisings along the way so the return/share would not necessarily be a 10-bagger.
However I remain an investor and a believer despite the high risk. The dominant companies in market sectors generally find a way to survive tough times and then can take maximum advantage in the good times.
BLY Price at posting:
13.0¢ Sentiment: Hold Disclosure: Held
