Hi Sabine,
I find it somewhat ironic that all these technical indicators are based on price action data from 20 to 200 days, during which time the stock has been, and still is, manipulated through heavy short-selling master security agreements between JPMorgan and Citi (as seen in the substantial holder announcements). It seems only natural that a stock targeted by persistent short-sellers would receive a sell rating, as the short-sellers are essentially responsible for the very data that underpins it.
Technical indicators like moving averages are useful in normal conditions but fail to account for manipulation. In this case, these indicators simply reflect artificial downward pressure, leading to misleading sell signals. Moving averages and oscillators will show trends distorted by short-selling, not the company’s performance.
I’m not overly concerned with manipulated metrics driven by manipulated data. These technical indicators have their limitations, particularly when external factors like coordinated short-selling influences the price, and I believe fundamental analysis should take precedence in this case as a more independent and accurate metric of analysis.
From a fundamental perspective, LTR is in a good position with a great ore body and a plant that is fully operational with no disruptions. The company has shown impressive progress in improving its operational efficiencies at a rate that took its competitors 18 months to achieve. This operational optimisation has been critical for reducing costs, improving margins, and driving profitability, all factors that technical indicators cannot capture. Importantly, the company has fulfilled multiple off-take agreements, which not only demonstrates the viability of their product but also provides a predictable revenue stream. This is significant as long-term secured sales contracts reduce the risk of volatility often associated with resource-based companies.
Furthermore, the recent recovery in the Australian spodumene price, which jumped from $750 USD/t at the end of October 2024 to $850 USD/t with further price increased forecasted by most analysts is a trend likely to continue for the foreseeable future.
Additionally, there have been favourable foreign exchange movements and government support at both State and Federal levels adding further strength to the business. This company is simply too important to the government's critical mineral strategies. These fundamental factors, operational performance, commodity price recovery, and government backing are all key drivers of long-term value that the technical indicators simply can’t capture (especially in a price-manipulated market).
As these fundamental factors play out, they will contribute to a stronger balance sheet and profitable earnings by the financial year ending 30 June 2025 which should reset the share price to where it should be, regardless of any short-term technical signals, as the market will ultimately be forces to recognise the strength of the underlying business.
Ultimately, the intrinsic value lies in its assets, operations, and market position. Not manipulated moving averages and oscillators.
Regards,
CK
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