will ipl go to 2.50?, page-54

Hi Daf,

don't forget that IPL is not the same company as it was back when it was ($200/$10).

IPL now owns DXL which is an explosives manufacturer. I would anticipate that a decline in mining activity would impact this business profitability. Also there is the new plant at Moranbah - which will cost a few $$$. Even in the 'good times' the DXL share price struggled sideways.

I think that IPL made the right decision to buy DXL at the time, but not many predicted how much of an impact the current financial meltdown would have on world GDP.

As for fertilizer:
Yes Phosphate prices are still very high, and we may face Worldwide food shortages next year. This fear may help push the price of IPL back up. However - on the downside for fertilizer is:

Declining Oil prices - easing pressure on biofuels
Slowdown in China - maybe they'll eat a few less big macs and more rice.


IPL's price:
Who knows? a PE of 10 means you are paying for 10 years worth of (last years) profit today. In a strong Bear market are people prepared to pay that much for a share? How many multiples of earnings will they pay? There are companies out there with more cash in the bank than their market cap.


Joel