I believe that one of the major factors holding share price back is the constantly changing structure of GDO. In such circumstances it is very difficult for anyone to accurately calculate earnings, costs, and of course an accurate value per share.
For example, over the past 2 months or so, the company was relatively static, and it was easier to calculate share price based on back-to-back quarterly reports. That being, the case, the share price gradually began to appreciate.
With last weeks news the whole picture has become clouded again. Whilst we all hope, and assume to some extent, that the acquisition will be beneficial, it is next to impossible to accurately translate the event into value per share.
How will it impact earnings? To what extent will uranium factor into the equation? What are the funding implications? What time scales are we looking at?
These are just some of the questions which arise, not even taking into account complete unknowns such as takeover talk and the general fear of nuclear power post-Japan.
I'm not being critical of GDO, and I intend to hold, but I can see why the company is not attractive to some. It is simply to confusing.
The potential for the company is huge, but at the moment it's a bit of a case of 'water, water everywhere, and not a drop to drink.'
GDO Price at posting:
42.0¢ Sentiment: Hold Disclosure: Held
