This could Multibag .................., page-48

With respects to the longer term prospects, I think holding is not a bad idea. I'm still toying with the idea of picking some up but I think it could dip under 3 before the tender results are announced and if DXN loses it, I expect a major dip in the price right back into the 2 cent range as holders who picked up in the CR will take their profits, wait for the price to settle and then potentially buy back in. (This will be the buy point for people who really think the long term opportunities exist and are not phased by the tender outcome).

But in terms of the undervalued price right now according to Morningstar, if you take a look at the vast majority of companies listed on the ASX they are usually well under what Morningstar and other agencies fairly rate them at. This is a consistent theme, take 20 companies at random and I guarentee you at least 15 will be significantly under fair price.

Only really established or world leading companies with a surefire likeliness of turning a dividend or major surefire growth expected tend to be fairly rated or overpriced. Think Telsa for instance, considering the future they have ahead of them in the next 5 to 10 years and the difficulty their competitiors will have catching up to them.

If the majority of companies were fairly rated, there would be little incentive for traders to gamble their money on speculative shares like this one as a fair price would be reflected in the SP if the company and holders would receive a regular annual dividend for their holding etc. So be careful about getting sucked into that one too deeply. A lot of people have lost money buying into the wrong penny stock thinking it was great value for money only for the company to not ever gain any real traction in the market, languish for a few years and then run out of capital and fold.