Have to disagree totally with your assessment that the A$2.5 mill profit reported last FY was due more to amortisation changes than underlying performance improving.
That assessment flies in the face of all the publicly available evidence to support the (in my view) fully justified move from around 10 to current low 30s or higher.
Lets look at the most basic of facts. AMUs oil and gas production last FY year was up around 25% in a year of significantly higher oil and gas prices. And blind freddy can see that that production increase - from clever acquisitions and drilling success - is sustainable going forward. In fact, just on current levels of production, AMU will deliver around 25% higher production this FY too. And drilling success on Red Creek (a record of 4 from 6 so far) suggests more to come there too.
ON a valuation basis it too is clear that AMU is still selling at a price discount to its oil and gas assets. It is not unrealistic to expect other bigger oil companies would view their undervalued assets as a tasty morsel.
And yes their amortisation policy will probably deliver about A$1 million extra to next years bottom line profit. That will - on oil and gas alone - probably come in around A$4 million.
For an oil and gas company with its recent record of success and growth, a market cap of A$40 million plus is certainly not unrealistic. At current prices AMU is still short of that.
And as I noted above, all this has been in the public arena, but ignored by the market except for some of us keen AMU followers.
PLUS .... the bio-diesel project has ticked off a bunch of very significant milestones as others have mentioned. With than project looking more and more likely to deliver profits that will surpass the immediate profitability of the oil and gas business!
Again, all public knowledge to those who have taken the trouble to do their research. (Or even to those that have read the stuff I have posted here - do a search of my posts and and see how the Shaws stuff was presented here months back! Or to those that read Quentin Cameron's Oil and Gas bulletin comment on AMU which likewise spelt out the obvious undervalued nature of AMU, posted on the AMU web site until recently.)
It was really only when Shaws did investors the favour of pulling all this together and releasing a report on it that the wider investing public picked up on the amazing undervalued nature of AMU.
All up it is no suprise that AMU is travelling at current prices. Nor should it be any suprise if it just keeps on going to approach the levels bandied about in the Shaws report (ie 60 plus when the bio-diesel projects get the nod from ANZ).
Good fortune to all those on the good ship AMU!!!!
AMU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
