I have had a reasonable look at MOY and have come to the following conclusions:
POSITIVE
Projected PE 4.3 F2019.
Current Ratio 1.8. (Maybe a little weak given potential capital requirements)
Debt to Equity 1%.
ROE 44% F2019.
Assuming FCF of 10Mil in 2019 then I have a value per share of 29 cents (This is where problems arise I feel. See more below)
NEGATIVE
SHARES OUTSTANDING HAVE ROCKETED IN THE LAST 3 YEARS FROM 212 MIL TO 781MIL. Will this continue?
MINE LIFE POTENTIALLY ONLY 3 YEARS. This is my main concern.
The company has stated that it intends to mine underground in the future. I dont know the costs associated with that venture, but I am assuming it would cost more that open pit work? So, if they have to mine underground that means all their profits will be used in Capital Spending.
Will this leave a profit?
I suspect the share price will rise given the indications that the gold price could rise over the next few years, however I think there are better gold stocks to buy that will outperform MOY.
If I buy this stock it will be a short term trade (several months)
Also note that MOY doesnt trade on large volume so suspect Funds do not hold.
