If there’s one thing I’ve learnt after many years of investing in the stock market it’s that the market always over reacts - stupidly so in many instances.
NXL is a classic example. This stock reaching $11 was insane - pure hype and FOMO. Now we’re getting into over-reaction territory on the downside. This is fundamentally a well established growth company with good prospects but the market has really turned on it - it’s overdone yet there’s probably more selling to come.
I’m dirty (as are nearly all holders) on the mismanagement of information flow into the market and the impact this has had on the share price. There comes a time however where you have to let go of that and assess the potential opportunity on offer.
I think fair value is probably 10-15% below the float price - say around $4.50. I’m watching with interest and a view to buy now because I think there’s an easy 50% gain to be made at some point when the mindless dumping of NXL subsides (say $3 back to $4.50.....or maybe $2.50 to $3.75)
“Keep your head when all about you are losing theirs”
Rudyard Kipling
NXL Price at posting:
$3.30 Sentiment: Hold Disclosure: Held
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