Buying of late suggests some think that the bottom is probably very close. Sufficiently close to start snapping up some of the low price offered by sellers.
The TSX has marked Anvil down to close to $2.00 a share - Aussie dollars that is. Too early to tell but even on the TSX, Anvil seems to be bouncing off a low base during the last days of trading. Large turnover at lower prices is being marked by a once a day buying surge. Half a million shares snapped up in one moment on Friday's trading.
Could short sellers be refurbishing negative holding? Could the beginnings of a take over be on the way? Could insiders/institutions be loading up in preparation for a share price reversal?
It is not difficult to imagine why Anvil share price has been devestated. The marked is in despair, panic and capitulation. Share prices falling but not many cashed up potential buyers prepared to move. Yet!
On top of all this vauation of Anvil is being undermined by --------
1. Internal conflict - war - in the Congo spreading fear into the market. Anvil is well distanced from the conflict and not affected - But tell that to potential buyers of Anvil shares who are already in fear and intrepidation.
2. The Contract Review. Markets hate uncertainty and this is a big one hanging over the market. Cotributers to HC have allayed such concerns but until the Review is released fear and uncertainty prevail.
3. Profits. With Dikulushi out of commission for upgrading and new smelters having teething problems and price of copper crashing Anvil quarterly repots are likely to upset market valuation of Anvil because of lack of profit.
Am inclined to believe this is a major factor in decline of Anvil share price.
4. The collapse of the fundraising offer. While probably a positive for share holders in the long run many will see this event as a negative and something creating more uncertainty.
Have previously suggested that mid October AND coinciding with just before the release of the Contract review would see the low in Anvil share price. The release of Contract Review has been delayed and as such the prediction is negated.
However hopefully the Contect Review will be public soon and the quarterly report out. Should both occur about the same time fear and panic will lesson and projections into the future for Anvil will become more significant. (The buy in rumour - sell on fact phenononem. Reversed in this instance.) Institutions/insiders now loading up will announce Anvil has been grossly oversold and has a great future. Management will make positive announcements (perhaps for example an earlier recommencement of mining Dikulushi? and other such items). And the prediction that Anvil will bottom about this time may well be validated!
Still stand by the prediction however that the most likely significant break through in Anvil share price will be mid to late April. The assumption is that with upgraded mining at Dikilushi and full production of smelters the finances for first quarter 2009 will be positive and the future looking better.
A return to a $20 share price for Anvil does not seem likely for two or three years. A bubble has burst.
SHOW ME THE MONEY! is the likely cautious approach of would be future investors. Real profits before real buying!
Eventually some of our more informative posters will analyse the likely profit once the SX-EW plant is functioning at whatever price of copper is current and that will be an indication of potential share price - after allowing discount for soverign risk.
That and perhaps a commencement of dividend payments may turn Anvil share price to healthy higher levels. But that may be several years hence. Less hopefully.
Well that's my guess-timating anyhow. Your guess is as good as!
AVM Price at posting:
$3.03 Sentiment: Buy Disclosure: Held
