I refer to my post# 16801743 on the 15th of January 2016, where I said:
16801743: Leave that a side, it is an irrational market and there is a strong desire by the big players to play games of the Feds , exerting the highest pressure to delay further raise of interest rate or even encourage many government around the world to add more stimulus measures.
Now the ball is in Lynas court and we all have to wait for the quarter release.
THE CENTRAL BANKERS AND THE FEDS ARE HELD HOSTAGE TO THE BIG PLAYERS AND THE MARKET.
NOW THAT THE MARKET HAS ACHIEVED ITS GOAL AND THE GLOBAL SELL OFF HAS REVERSED, THE PERFECT ENVIRONMENT IS CREATED FOR LYNAS TO SHINE DESPITE THE PRICE OF RARE EARTHS HAVE PLATEAUED OVER THE LAST FEW WEEKS.
The Markets Are Backing Central Bankers Into a Corner
http://www.bloomberg.com/news/artic...mo-central-bankers-urged-to-stay-in-the-fight
That leaves investors increasingly predicting that the Federal Reserve will slow its campaign to raise interest rates and that the European Central Bank and Bank of Japan will soon deploy more stimulus.
FOSTER STOCKBROKING :NPV is A$0.30/sh AND TARGET OF A$.15/sh
We initiate coverage on Lynas Corporation Limited (LYC). Investment Highlights: · LYC is one of the two new rare earth operations to emerge as a producer from the rare earth boom of 2011, and when Molycorp shuts Mountain Pass in October 2015, LYC will be the only new producer, and the only major one that is non-China. · LYC is a value investment in the rare earth space, strongly leveraged to any recovery in rare earth prices and strategically critical to non-Chinese rare earth consumers. As the only investable rare earth producer outside China, it should have considerable option value. Steps taken to secure the balance sheet, and direct almost all operating cashflow into ensuring solvency of operations, means that the option on a recovery in the rare earths market has been extended to at least end 2017, but the market has not reflected this in the LYC shareprice. Earnings and Valuation: · Our NPV is A$0.30/sh, based on NdPr prices staging a modest recovery from a low of US$36/kg to US$47/kg then growing at 2.5% above inflation. We assume a more modest recovery in SEG and lanthanum prices, with no real recovery in cerium prices, due to sustained oversupply. · Our target price of A$0.15/sh is at a discount to our NPV because of the lack of visibility on sufficient earnings to support a higher target. The A$0.15/sh target is 9.5x FY17 EV/EBITDA. With depreciation 2.5x larger than sustaining capex, and a 10 year tax holiday in Malaysia, we believe EBITDA is the most relevant metric.
TIMING IS CRUCIAL FOR THE MARKET TO REACT TO ANY POSITIVE NEWS.
The company has mentioned to me the release between the 20th and the 29th.
The 20th (Wednesday) was not good because of the global sell off prior to Draghi news conference which was the following day.
Thursday 21st was not good either prior to Draghi 's conference that night.
Friday 22 was to wait for the response of the market to Draghi which was positive and overwhelming.
That leaves Monday or Wednesday for the company to release and the company elected to release on Wednesday the 27th at 9am.
Wednesday is better than Monday. Monday is followed by a public holiday(Australian day) and the gains in the share price will create imbalance with its listed share in the USA and Germany.
Wednesday is better for continuity of the momentum. In General the Dow does well towards the end of the month because of the financials and Lynas tends to do well in this kind of environment.
THE RELEASE AT 9AM IS A POSITIVE THING, I DO NOT LIKE THE ANNOUNCEMENT AFTER THE CLOSE OF MARKET IN GENERAL.
The 27th is closer to the end of December and will the give management a fair idea about the progress of operation in the month of January which can be communicated to the market in a positive way and offset any potential less favourable information.
NO PREVIOUS WARNING OR CHANGE TO GUIDANCE:
The company has recently updated the market in a positive way and confirmed that Nd/Pr has exceeded its guidance and there was no warning about bad news.
BECAUSE OF ALL OF THE ABOVE AND OTHER REASONS AS PER MY PREVIOUS POSTS, I STRONGLY BELIEVE THAT THE DECEMBER QUARTER WILL BE IMPRESSIVE AND WILL BE REFLECTED IN THE SHARE PRICE IN A BIG WAY.
I invest with my own money and take responsibility for my own analysis.
Everyone should do his own research , should not follow anyone and believe in his own analysis.
All IMO, not an investment advice.
Go Lynas GO
(20min delay)