I have been an extremely long term holder/believer in Linc. Got in and out a few times but its all different this time. GFC or not, "New" Coal Sale or not - Peter Bond has proven his merit - he got Linc a sale which is being valued anywhere between 670M to 1.5B. Let me be the devil's advocate here. Even if the entire sale is valued at ONLY 670M it would be a cash backing of $1.35
With the current SP of $1.57, i really would invite ANYONE to show me a ASX 200 company which has a cash backing of 85% + assets worth atleast twice as more. A company which has been in existence for this long and is light years ahead of its competition.
The way i see it, a lot of traders expected the move up from $2 to $3 a breeze and jumped in late - most of them are closing out now. A fall of 25% has pretty much burnt them bad.
Any serious long term investor is still holding. Everyone knows that in the worst of scenario's Linc would be valued at least to $2.50 or more if one more sale goes through. Even without the sale $2 is definitely a hold. When is a factor that a long term investor shouldn't bother too much.
Peter Bond has proven assets can be sold at good prices, so its now the buyers who will be in a much bigger hurry to grab a bargain.
I am now changing my sentiment from Hold to BUY. Personally i dont think there is as much room to the downside as there is to the upside. Probably $1.40 or even $1.20 worst Case - thats 37c to the downside and potentially $1+ to the upside from here on. Again its not about IF - its when.
An investor should worry only about IF not when (principle followed by Warren Buffet).
I'd rather buy now at 1.57 than to wait for it to get any lower than be left out when the day comes.
Last time a rumor made it go from:
$1.05 to $1.38 Two days later $1.30 to $1.535 next day $1.535 to $1.68 day of the formal news release $1.59 to $2.05
most of the upside was over within 2-3 days. If we can expect the same with a second sale - i'd rather be in now than on a day when its 30% up on a rumor.
These are just my sentiments - DYOR
LNC Price at posting:
$1.57 Sentiment: Buy Disclosure: Held
