I agree with your sentiment. Problem is that this is not an...

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GrazerAu

206 Posts.

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16/02/19

09:54

Post #: 37456950
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Originally posted by olderwiser: ↑

Its the big question for sure. Since listing it gone from little more than an idea to cash flow positive at sufficient scale to show a bright future. At the same time the share price has declined from an adjusted listing price of $1 down to 62c . I use a couple of trend graphs, based on the 4Cs, to remain objective in the face of the psychological pressure a decline in share price induces.
View attachment 1447057

COGs v Reciepts has been corrected for the error in COGS reported in the March 18 quarter. It shows the gross profit widening in real time as LPE grows, despite the fact receipts are delayed around 3 months from time of sale.
% growth above the previous quarter is taming down as the size of the business grows, which is to be expected. Its not as hard to grow $1 into $2 (100% growth) as it is to grow $1,000,000 into $1,500,000 (50% growth)
Just looking at the seasonal growth pattern in the Dec and March quarters, (highlighted in red) and its pretty clear the next 4c s going to step up.
The consolidation of 50 to 1 was a risk, without a positive supporting announcement a 15 -20% decline was not a great surprise. ( To be clear I did expect a positive to go with it). Instead we got a poorly communicated negative, which to be fair, has been partially addressed in the latest release. But the damage to sentiment has already occurred and the trading pattern indicates a shark presently feeding on that sentiment.
Like you I continue to buy, not letting the sharks have it all.

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I agree with your sentiment. Problem is that this is not an exciting stock. Its not going to ever have explosive growth such as appen or altium. Even when this is cash flow positive, it will trade on a low p/e multiple due to the type of business.

anyone expecting a Disallowed here is drunk.

LPE Price at posting: 60.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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