valuation discussion thread, page-160

Posted this on the ZFX thread in relation to the 'lack' of an independant 'experts' report

What if someone knocked on your front door and offered $100000 for your house?
Would you really waste your time and money to go out and see what an independent expert thinks? You might, but most people would tell them to get stuffed.
Can't really see the difference in this situation.

I'm sure a lot of the long term AGM holders think along similar lines to myself. That is, long term its worth well north of $1 (why else would you have been holding the 70s). If you sell now, not only do you have to realise CGT, you also have to find an investment with similar upside (not that easy). At $1 why would you. Sure, short term it will drop if the bid is pulled, but most LT holders weren't planning to sell in the next month anyway.

There is no way $1 will be succesful, you only have to look at the share price to realise that. No one in their right mind will accept an offer lower than what they can get on market.

Can't see ZFX walking away either. They desperately need some upside in their business. Most have blamed ZFX's fall entirely on the Zn price. However, I think a huge part of the reason is the lack of upside in Zinifex. When you buy a stock LT, you buy for the future upside. Woolies will sell more corn flakes, BHP will dig up more minerals, QBE will write more insurance etc. But when you look at ZFX in five years time where is the upside? There isn't much. The main mine is getting towards the end of its life, not much upside there. When you hear people talk up ZFX, the basic crux of the arguement is the dividend not the future. I hope they understand that future dividends are dependent on future, not past profits. The only really upside I see (and I think the new CEO has seen this quickly too) is they can do something smart with their cash. ZFX desperately need future upside which is something AGM has by the truck load.

Very confident there will be bigger offers in store.