Happy New Year to all LYC holders!
Well Kinbasket one thing we both largely agree on is the broad range of the numbers but i feel you are focusing too much on the right now theoretical share price based on the current basket price.
The reality is the basket price is in significant recovery phase and there is a shortage in an industry dominated by the Chinese 95%. Remember this is why the FIRB knocked them back after heavy lobbying from interested parties all over the world as the Chinese are at full capacity and are keeping it for themselves so they can build on their high tech industries. There is worldwide consensus that there is a looming shortage with LYC the only significant near term increase in supply.
Given that LYC already has contracts in place with no cap and a floor that is always set at prices that are in excess of basket price as you would for any commodity that you were entering into a 5 year contract for then what is a reasonable interpretation of the numbers for a proven 20plus year resource.
Well a base case on your 20year dcf at US12.50 gives you
76c a share so how is it overvalued? I feel a $20 plus basket price over 20years will be a better long term average based on the consensur supply/demand balance and that comes out at $1.69 according to your chart.
So then factor in the potential overs in a medium term squeeze and it isnt hard to see $2 plus for this stock based on fundamentals and lets not talk about a bubble which tends to happen when there is a shortage.
In answer to your question about the price sensitivity of the basket well my understanding is that RE's are a very small but necessary ingredient in alot of applications so from that point of view it can easily be absorbed ie not much used in lcd,ipods, or even in hybrid cars which are a large user but relative to the cost of the car it can be easily absorbed.
LYC is in a very sweet position in an industry where it will be a price maker not taker.
2010/2011 will be vintage years to all LYC holders!
cheers
Happy New Year to all LYC holders!Well Kinbasket one thing we...
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Last
$6.56 |
Change
0.050(0.77%) |
Mkt cap ! $6.131B | |||
| Open | High | Low | Value | Volume |
| $6.51 | $6.59 | $6.49 | $8.348M | 1.273M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 4 | 16304 | $6.55 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $6.56 | 2708 | 2 |
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| Last trade - 16.10pm 05/07/2024 (20 minute delay) ? |
| LYC (ASX) Chart |