The first 2 ideas
are Canadian Potash focused available on the pink sheets.
I can't forecast
the future value of Potash prices. Instead my focus is on the deep asset value
of these two stocks, very cheap and oversold relative to their industry peers.
Potash related stocks have taken a big hit after potash prices plummeted. Potash
per metric tonne reached $600 a few years ago but now for multiple reasons
Goldman Sachs is projecting potash prices to sink to $300 per ton. But these
two tiny Potash related ideas are not only financially strong but relative to
its industry peers had the biggest valuation and price drop.
PCCLF: Phoscan
Chemical Corp "engages in acquiring, exploring, and developing mineral and
natural resource properties in Canada. It holds a 100% interest in the Martison
Phosphate project, which is located towards north of Hearst, Ontario."
Source Yahoo
Why does it look
interesting?
Current price is
.25 (09/06/13) with a NCAV of just .26. Yes it's selling for slightly less than
it's NCAV. (Net current asset value (Net Current Asset Value (NCAV) = Cash and
short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) -
total liabilities) = .26
Book value is .85
or P/B of just .30.
Optimistic insider
activity was reported during 2013. 67,000 shares purchased in July 2013 for
.26, 70,000 during April 2013 for .25, 56,000 in March for .26
PCCLF has a
negative enterprise value of -17.86M, market cap value of 41.78M and posted a
52 week change of-negative 12%
I consider this a
major company positive as they executed aggressive company share repurchases.
The outstanding share count of 172.18M and has been reduced to the current
balance of 163.69M.
Value Institutions
with a longer term investment style have positions, Royce, Mackenzie Canadian
Resource among others at much higher prices.
KRLTF: Karnalyte
Resources, Inc "Karnalyte Resources, Inc., is engaged in the business of
exploration and development of high quality agricultural and industrial potash
and magnesium products." Source MSN
Why take closer
look? Negative enterprise value of
-3.99M, Market cap of 53.33M, 52 week change of negative 76%, Gujarat StateFertilizers & Chemicals (GSFC india) was willing to take a 19.8% stake in the
company paying 44.7M or 8.15 per share in a private placement. That was January
2013. Their investment is down 75.7%.
Yes Potash prices
have dropped but that should not justify a 75.70% drop in their KRLTF
investment less than a year ago.
RVM: Revett
Minerals Inc (RVM)
Last Sunday I
posted the idea of RVM based on positive renewed insider confidence with open
market purchases; furthermore I provided some decision making data. 329% off
the 52 week high of 3.95 on Sept 12, 2012 , 52 week changed of -71%, cash as a
percentage of the price was 47.83%,EV/GP of 1.15, Price to book of just .39,
Market cap of only 32M
The stock quickly
moved 27% higher from last Sunday's price of .92 to close Friday at 1.17. This was based on updates of operations,more transparency for shareholders but nothing significant yet. The
stock is still way off its 52 week high of 3.95 and statistically deeply
discounted.
