AJX (ASX) Blue sky projections for AJX

Originally posted by joewolf ↑

Really to reply to all of your points would make this a tennis match which really I certainly dont have enough time for so forgive me for cherry picking the important points as I see it:

1. I do have issues with your blue sky because whilst it may be valid exercise it does nothing other than project huge profits for the investor just as you cannot use a PE to value a project where there are so many outcomes you cannot project this too far out. Its what creates these hugely hyped up moves in some part fueled by forums like HC and pubs. Then when they come back it hurts the newby badly. I don't think its productive other than for very disciplined players who take all their own money off the table and can have 10 baggers in the cents to ten cents ranges. If that's your trading pattern you have done well and I suspect that there are many that use this forum not necessarily this stock to trade those moves. I dont like it.

2. I see in your 10 plus baggers you state "What I would say is that a tiny minority make it stick and keep those lofty valuations through to becoming successful businesses, indeed none of those above have become mature growth type players or even turned much of a profit from memory, most of their gains came from micro cap to small cap and often with HC hyping them along the way." - My exact point - Many of those stocks including MHM , INT and the ones you note have caught the wave and the exact trading pattern that occurred in AJX in November 2014 to January 2015 occurred and the first wave made huge money. Then the heartache for those that came next ( Not suggesting AJX is the Same) MHM was a scam and in fact the lead director had to be sued to pay back the money he spent on his pleasure boat ... Its exactly why I dont like your post. If we believe that this is the real deal we dont need to make these exploration mining style claims where you measure the profits on every announcement yet everyone knows that the mine is unlikely to ever eventuate. I do note that you dont see AJX in this camp of shooting star.

3. To answer your point and that of others the 15 PE - My Point was it was to answer a request for my opinion it was started and stated as an opinion piece. Yet reality is that I also called it a sustainable earnings PE. I am not suggesting that it should have a PE and here we are being told it should be higher given its potential and the company as at today has not reported a profit. I have no idea what the PE will be its just a point that if its a mature company it has to make $17 million before tax just to service its existing market cap. It was to point out that its existing market cap is relatively high to a development company. Its the point management seemed to have grasped - too many shares. It cannot be a Disallowed as you suggest a sale at a $1Billion as thats a little north of 5.6 times its current market cap. We may see the potential but it has already racked up a large market cap for a speculative company yet to hit the sales - At the $1.00 its $300 m market cap... I like everyone here is hoping its way better than that but we have no idea.

4. This point you noted around share issues: "The dilutive effect of STI/LTI to management you mention will also diminish in the face of a rising SP, but I agree with you that generous share issues to management isn't a great look unfortunately low liquidity might also prevent large on market purchases by them as an alternate means to increasing their exposure to the company." I think you are making my point for me: Firstly they are only dilutive to other shareholders if issued to management , in fact it increases their percentage of the company. Secondly if the STI was paid in cash and there were no shares and the price had to rise we would all be happy as there would be no dilution. I keep pointing out that through a variety of methods this company has issued more than 20% of its issued shares each year for I think the past 4 years. There are just too many not sticking - here would be a great idea to create some demand - they may not have had the cash reserves but going forward I do think this has to stop. I think they have noted it but not stopped the STI's in shares to themselves.

5. Your style suggests you are looking for a big run up and a sell out... My style is to find companies that have sustainable growth and invest in that - its different. You are able to judge your exit obviously otherwise you would not have had the 10 baggers you refer to as most if not all came crashing back. I am looking for a sustainable investment where I hopefully wont sell and will invest in the future outcomes. If its at worst a 3 or 4 times your investment then its a great investment. However whilst the signs are pointing there there are a few small things like actually hitting the milestones.

Basically I like to let the results speak for themselves.

Expand

Your post is all over the place, addresses points I didn't even make, puts words in my mouth, at points try's to rebut what I have said by stating the same and ignores my conciliatory acknowledgement that it's all a confidence game until a few more quarters have passed.

I would just reiterate that AJX genuinely appear on the cusp of cash flow neutral with a very encouraging trajectory of sales and customer engagement. I have clearly said that PE isn't relevant here until much more time has passed. If you think it's expensive at sub $200 million with the potential it has then you're at the wrong end of the market. Risk/reward at sub 60 cents looks excellent.

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Last 0.8¢		Change 0.000(0.00%)		Mkt cap ! $12.49M

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