So much downramping still going on here!! I’m not sure I’ve seen...

So much downramping still going on here!! I’m not sure I’ve seen a thread with so many ‘sell’ and ‘not held’ negative posters before. I see this as a very bullish sign. I sell into hype and buy into fear — there’s certainly zero hype here right now!

All the negative things are well and truly factored in with the share price so heavily beaten down IMO. Compare the enterprise value to the order book and a takeover offer still wouldn’t surprise.

Here’s four reasons why the company has serious upside and certainly isn’t going bust:

1. The directors are putting in almost a further $1 million of their own money at 40 cents. If anyone thinks they would do this for no good reason you are delusional.

2. Relative to the size of the forward order book and earnings (not to mention the huge tax shield) this company is by far the best value in the sector. Compare with NWH MND etc and any rational investor will see the value here.

3. Thorney owns almost the maximum 20% of the company and were buying on market in June and participated in the July placement. They clearly still see value and upside.

4. The company has been extensively looked at by Collins St Asset Management. These guys have literally been the best performing fund — despite holding DCG! They met with management and see the medium/long-term value about to be created. The share price hasn’t performed yet but eventually it still should.

Before the recent dilution, my 12 month fair value target price was ~$1 (with more upside depending on order book growth). This comes down now to ~70-80 cents but that’s still 100% upside which is hard to find in these market conditions with very little value around.

I expect the share price will start to turn around within in a couple of weeks once the SPP closes. Obviously it’s better to buy on market around 35 cents than to take the 40 cent deal with options IMO.

The funny thing with the downrampers spreading fear and blatant lies is that they have proven to be poor investors and never mention a target price. Personally I see great value at 35 cents. Everyone has a price. Most of these downrampers previously lost money here because they invested when the risk was higher than it is now and the value/upside far lower. The company has literally never been a better risk-reward investment than right now on any metric so by downramping they are essentially admitting to being incompetent financial investors. Either they never should have invested in the first place or they should invest now. The positive NTA, adequate working capital to fund growth after the recent capital raising, huge order book relative to EV and far lower risk profile of future contracts means the risk here is actually probably the lowest of the entire sector.

If anyone thinks another stock (large or small) in this sector is better value (excluding high risk drillers, contract miners, etc.) I would genuinely love to hear your view as I do follow this sector quite closely. Just make sure your analysis is based on the future rather the past. FY22/23 is what the DCG story is now all about. The past mistakes create the opportunity here to invest low and sell high IMO.