Valuing HCH, page-59

Hello all!

Yes, my first post on HC, so please remember back to your initial posts and help me contributed in a positive way. That is my intent.

By brief introduction I’m self-employed after a long professional career as an engineer in Oil & Gas. I study the market / do research from 7am-1pm (WA time) most days. I have read HC threads on many stocks over the last few years looking for insight and answers on various issues / companies. I presently hold strong positions in each of HCH, CLA, AVZ, AAJ and a few other stocks, all Lithium/Copper/Gold/Silver/Nickel, plus Apple Inc.

I am a long-term value-oriented investor, period.

This particular thread on HCH is one of the best I have read, everyone contributing for the good of the discussion / moving the topic forward. No side conversations or “fuss” that takes the conversation flow off course.

I have the same question, Why is HCH so undervalued right now and what is the future worth (stock price appreciation). I’m not interested in someone buying them out, unless they can add huge value (obviously). I’m sure everyone has listened to Christian Easterday’s discussion on Coffee with Samso, Noel Ong. The guy is committed, stays on location to oversee development. HCH has a real good story and plenty of upside, in my opinion.

I have some ideas I would like to share / get your input. I believe HCH has great potential.

The economic analysis by TH and input from all is great. The stock price numbers calculated, 0.60 based on financials and .24 cents with the discount factors applied are closer to a Book Value. What someone may pay to buy the company, as everyone stated.

If you look at a company that is on the ASX, has very similar mineral resource amounts for comparison and is in business producing copper/gold/silver, it’s Sandfire (SFR). I don’t own SFR, wish I did.

What I’ve done is calculate Sandfire’s mc and mrv (mineral resource value) to help determine what stock price HCH would have to be to match SFR’s mc/mrv, which is 0.05, see table below.

I’ve used TH resource amounts and prices.

For HCH to have a mc/mrv = 0.05, the stock price needs to be 0.40 cents.

OZ Minerals (OZL), with 7 times the mc and 5.8 times the mrv (141,661 / 24,424), also has a mc/mrv of 0.05. OZL trades at a PE of 32.

The mc makes sense, $AUD 1.2billion, with a stock price of 0.40 cents and the value of HCH is more than the discounted “book value” of 0.24 cents per share.

PE is a key component of stock price / company mc. Another discussion by itself.

Tesla has a TTM (trailing twelve month) PE of 115 versus the US auto industry average of 15.

HCH has no earnings (yet), so there’s no way to comment on what PE it might trade. It is sort of implied in using the 0.05 from SFR and OZL mc.

There are a lot of other factors involved that will ultimately determine HCH stock price appreciation. I think they are a bit off the investor radar right now. That’s why I continue to add more HCH shares when I can, before their location starts to light up on the screen.

Good movement today. Up to 0.045 while I have been writing this post……..Nothing I have written is meant to be financial advice

Tom