VUL megathread, page-6716

Its not that simple unfortunately. Some companies can appear cheap using some metrics, however this can ignore context which is important. For instance, a stock with a value below its NTA might be justified if the business is predicted to lose money and/or the assets are inflated on the balance sheet. Then the busines would fall into the "cheap for reason" category as opposed to a "value investor" type bargain.

In terms of Vulcan, I known that it is essentially a pre production resource company with big aspirations that have yet to be fully realised. I beleive there is also additional risk around Vulcan requiring productions processes which it needs to prove out and which are not currently done on other major projects? The valuation as it currently stands likely reflects more sceptisism on the company's prospects. The fact the company will require additional capital and make losses for several years is also likely.

I also think it would be dangerous to anchor to previous share price levels and conclude the stock is now "cheap", because I think it is clear the stock was caught up in a bubble of sorts, Lithium is/was one of the hottest themes on the market and the price action of stocks and retail investor involvement are hallmarks of irrational valuations.