I think their issue is growth (or lack thereof). Current market cap of $77m is about 7.5x EBITDA from operations. Today's announcement states they have been unable to sell Paris Creek, so that needs to stay in the mix for the moment from an EBITDA consideration.
Marginal growth announced today (circa 3.5% - half inflation, so I suspect EBITDA is likely treading water relative to FY22), so there can be no growth premium on valuation. At 7.5x EBITDA, current market cap is therefor quite "full" with little capacity for further share price upside until new information comes to hand.
I did hold this stock and sold out in the high $0.50's area when I thought the market had moved ahead of valuation and continue to monitor for a re-entry point. I was thinking this level would be a possible entry point, but now think there is a risk we will see the share price in the "teens" before a bounce, so will continue to monitor. Proce action today off the back of the announcement will be telling.
GLTA & DYOR
MBH Price at posting:
21.5¢ Sentiment: None Disclosure: Not Held
