Hello Ari,
I try to look at five factors when analyzing a stock (this is called primitive investing since I am stilla novice). Anyway, I look at:
1.) The company: management, shares outstanding, $ bank, stock price,
and stock exchange
2.) What sector the company is involved with: Gold
3.) Where the company's properties are located: Condo
4.) At what stage is their main property at: drilling
5.) Who follows the company
These are just my opinions but let me know what you think. I usually do this in my head but will try to put it in writing.
Now, let's look at these individually. Banro trades on a shitty exchange COATS. since it trades on COATS, I don't know the share structure since manipulation runs rampid in this exchange. They have approx $10 million (I think) in the bank with 20 million shares outst.
The current price is $4.35Can or Market Cap of approx $90 million Can.
This equates to a gold resource (assume $25 Can per ounce of gold) of
3.5 million ounces of gold. Unfortunately, I have no clue about the management nor the independent company CME. On a rating of 1 to 5 (where 5 is highest rating) I give this factor a 2 since I hate companies that trade on COATS and the stock appears fully valued with a resource of 4 million ounces (even though they claim 8 million).
2.) The gold sector is finally recovering but will take many months to finally gauge whether this is a temporary recovery or a permanent change in momentum. I view the gold sector with hestitant optimism.
But, if gold continues to move toward $350US, than Banro will look really good. For now, I give this factor a rating of 3.
3.) Since they only have properties in the Congo, I am very hesistant in investing in this company. Look no further than AMZ or Tenke. No major will buyout (and that's what we want!) BNRS for hundreds of millions without some assurance from the government pertaining to their rights to own the property. ESPECIALLY if Placer Dome loses their court battle to Crystallex. I give this factor a 1!
4.) Now, this is where BNRS looks good. They are going to spend $10 million this year drilling their major property. So far, they have drilled 5 holes and miraculously, they have hit on all five holes. These holes look absolutely awesome and the property has some merit.
IF ONLY THEY COULD VERIFY THE RESULTS! Look no further than Bre-X.
I give this factor a 2.
5.) Finally, who is following this company. I only know of the Coffin brothers from Hard Rock Analyst. They are highly respected and actually recommended buying this stock from $6 and up. If you know of others than please let me know. Anyway, it appears that not many people are giving credence to this stock, so I will give this factor a 3.
So, if you add up all of the numbers we get 11 out of a possible 25.
I guess this is the reason why the stock does not move when results are released. What needs to occur before people take notice:
1.) They must move to the Toronto Exchange. If this occurs that I will definitely look at BNRS. Do not think for a second that the Toronto Exchange will make another Bre-X mistake. These results will have to be verified before BNRS is accepted.
2.) Relating to #1, the results must be verified from a respectable independent firm.
3.) They must (somehow) be guarenteed of the rights of the property.
This is the biggest challenge the company faces!
There you go. I am getting tired from typing so respond if you wish.
I am not an expert but have learned from my mistakes and now take into consideration all factors before investing in these stocks.
Have a good day,
david |
