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4.5¢ atlas iron limited

To buy or not to buy AGO where to from here, page-126

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Richie2013

4,028 Posts.

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16/01/17

15:45

Post #: 21925367
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Originally posted by rarebird1971 ↑

I have just finished reading the many posts from the day re AGO, some informative, some with tails of woe, others with strategy, some bagging the stock, others singing its praises.

I just wanted to make some observations (not predictions) Observations are important and should rely on fact and fundamentals not maybe's and maybe knots !!

I want to give a clear and unbiased view of AGO for potential buyers, sellers, baggers and rampers alike. I also want to clearly say that my current position on this stock is BUY ( hence my observations are why this stock is a great stock to buy) I currently hold the physical stock as well as parcels of AGOO and AGOOA.

My observations and calculations are as accurate as possible without being the company accountant!! I also like to use a fairly conservative approach ( 5 x earnings ) etc

1. AGO have said in May that they feel they can achieve a 100mill free cash flow per year with IO at $55US and an exchange rate of .75 I use this as my guide to know when to sell my holdings. Nobody wants to own a company that doesn't make money so if IO stays at US$55 or above the AGO makes 100 million a year and should be valued at 500 million (5cents )(assuming 5 x earnings)

2. AGO is a real company, with real employees, with real cash flow, who sells a real product, with real income.

3. Iron ore AGO's product which they sell is on an upwards trend defying the predictions of industry experts

4. For every US $ 1 rise in the average yearly iron ore spot price for 62% FE, AGO's share price should increase by .005 or if you like 5 cents for every $10 rise in the price ( using this method makes it easier to value AGO and takes away all the emotion) ie. if the yearly ave spot price for Iron ore was US$75 AGO's share price should realise close to 15 cents + or - a couple depending on sentiment and Iron ore price movement at the time. (remember this assume a 5x earnings.

5. At current prices AGO are conservatively making AU$30 million a month.

6. The valuation of the company at this stage is one of a company making $80 million per year (grossly undervalued)

7. AGO have just had a credit rating upgrade!!!

8 AGO have $80 million cash in the bank with an expected AU$100 million profit in the March quarter (assumes ave spot price of US$75 with exchange rate of .75

9. This profit alone along with the first half year profit of approx 100 million values the company at 1 billion or 11 cents per share (5x earnings) this is before the june qtr profits are added.

10. Due to the volatile nature of Iron Ore you may want to sell when the share price hits its true value (11 cents) IMO I will sell three quarters of my stock at 11 cents and keep the remainder just in case they take off

11. Time to lose my #*%T - To the idiots that know nothing - don't post please you look like morons - like the idiot that said that if the share price rises the options will still only be worth .001 so they are not worth buying.... PLEASE!!! What did you think was going to happen when the Share price rose above 4 cents. If you don't know much ask questions there are some regular posters on this site and others who would be more than glad to help who actually know what they are talking about.

IMO This stock will be worth 10 cents by June 30th and options will be in the money ( based on fundamentals )

Disclaimer - Of course if Iron ore hits US$36 then the fairy tale is over.....

Looking forward to next week All the very best to all AGO holders!!!

Oh I forgot to mention the idiots shorting. If you really want to short a stock short FMG IMO they are over priced!!

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This post from rarebird needs reposting for those that missed it.

AGO Price at posting: 4.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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