But that is the share market. There are many, many stocks with inflated market capitalisations largely based on hype and hope. Many of them deflate and fall back to their true valuation over time. The beauty of all this is that there are many, many other stocks which are largely ignored by the market and are undervalued compared to their true value. LPI is one of those stocks and is a key reason why many long term holders have been accumulating and averaging down in recent months.
If you look across the resources small cap spectrum, you will see the vast majority of stocks have been hammered over the last eight months. LPI is no exception. BUT, as I have written before, given the length of the resource development cycle which is measured in years, many investors are not willing to wear the opportunity cost of committing money to a stock during a large portion of the cycle. Others do, but many dont. I believe that 2019 will be the watershed period for LPI and barring any adverse macroeconomic-event, will gain market traction from there onwards.
The number one catalyst for price escalation will be securing project financing/offtake arrangements with attractive terms and conditions. I also believe the quality of the Maricunga resource, the very impressive project metrics and the proven 99.9% BG LCE flowsheet present LPI/MSB with considerable leverage in any finance/offtake negotiations. Good times ahead. Patience required.
LPI Price at posting:
29.0¢ Sentiment: Buy Disclosure: Held
