it's one of the most oversold stocks around. imo at current prices not much can go wrong anymore. you can't fall far from a basement window.
of course, money flows, OBV, and suchlike have been wildly negative on it. but they are equally at never before seen oversold levels. a few tentative oscillator divergences exist, but nothing really earth-shattering.
however, its leverage to the PoG is absolutely enormous. at current prices it makes about 5 million dollars. at a PoG of 290, it makes 20 million, a fourfold increase on a 5,5% increase in the PoG. at 350 it would make roughly 80 million dollars, a 16-fold increase.
mind you those are rough estimates based on the cost structure information in the last annual report. further to the earnings potential, minable reserves would of course also increase at a higher PoG, as would the value of the reserves overall, which has basically been written down in recent years.
note that a fall in the PoG to 200 or below would put DROOY in dire straits...it would probably stop most of its current production and put several mines on care and maintenance in that case, but would likely survive. |
