Thanks for your message. My research style is very in-depth. I want to know everything about the company before I invest. This is mainly due to the fact that I only invest in companies where I believe there is a 5 - 10x return on offer. Given the higher risk it is important that I take my research to another level.
After I decide I am interested in a stock (from some rough cals, general review of what they are doing/planning on doing). I take the following steps:
1. Read every announcement associated with the company or its projects. With CRC it was easy as they only have one project, but this still resulted in over 75 pages of typed notes on each and every announcement made over the last 5yrs).
2. If I am satisfied with the project and how it has progressed I then move onto the financial side of things. If the company has published a DCF or if there is a broker report that is well written I utilise my own model to try and achieve the same result. This allows me to pick up on any errors or discrepancies I dont agree with.
3. If the project then looks decent I review the DCF and make allowances to cap-ex, op-ex, price of the commodity, etc to reflect what I believe is a more likely scenario. This can also include expanding the rate of production and mine life.
4. Then I have to research management, review the charts and make the investment.
4a. For some commodities (other than gold which I am bullish on) I also review the potential for it to increase or decrease over time and what effects its supply/demand.
All in all I would do approximately 100 hours of research on a stock during this inital phase. I then continue to research it each time there is a major announcement or something that allows me to have greater confidence in the numbers i plug into my model.
CRC Price at posting:
16.0¢ Sentiment: None Disclosure: Not Held
