EDE and TAS
These two stocks have given me a lot of alpha. And today, with another good announcement, it is surprising that they haven't jumped up more. All the tests have been good. Perhaps it is because the sale of EdenCrete have not jumped. But you can sense the prospect.
It is also incredibly hard to believe that TAS should be worth 37c based on EDE valuation by the market at 24.5c. There is no debt, yet TAS is only worth 18.5c and rose slightly to 19c.
posted by Club Mulgoa @ 5:30 PM
6 Comments:
Your subsidiary is worth AUD$295 million, and you own just over 39% of it. That means you must be worth at least AUD$115 million. On top of that you own just over 47% of the options in that subsidiary.
Ignoring the options, the TAS market capitalization is only AUS$69 million.
Strange logic! If a house on your street is worth $1.15 million and has buyers but the owner is selling to you at $0.69 million, why would you not buy it? Note: They are willing buyers at $1.15 million!
The history of this stock is... (this was written the day before)
When there is a very good announcement, it rises and then over the next few days, it falls.
Today, the good news WAS expected as it has fulfilled all the requirement from the USA state of Georgia. Also it has pleased Georgia by setting up its manufacturing base there. It has also acquired land to manufacture in Colorado too.
In April 2016, when the market went crazy over EDE, I bought shares in TAS at 25c. In recent times, this is the most expensive price I have paid. It has since come down but I have continued to buy because it is value for money. Today, at 23c, it is 'getting there'. I don't expect it to go over 25c unless more good news is forthcoming.
The latest announcement on 23/1/17 was one of the best. Hence both EDE and TAS have gone in for a run. It is very hard to imagine them falling back to their recent steady state level.
Once upon a time, my financial stocks rule the roost. Now material sector has jumped but these stocks should really be classified as "Industrial" now. EDE does not generate the raw material but makes them into high value cement.
Whatever was announced today is NOT new; it has been known for a while. Today, it is a confirmation of a previous confirmation!!!
The market takes it as a new positive development and caused EDE's share price to jump by 2c to 30c. And TAS has gone up by 2c too to 24.5c. At this price, TAS is still value for money relative to the market cap of EDE!
Another good news today but this is to be expected...
So the share price leapt. Historically, it jumps and then settles back but higher than what it was before. However, on occasions, the share price may fall back even lower when the lull is 'too' long. But of course, the share price will be severely punished with just ONE bad announcement.
Pity that I was busy at work. The best day to buy TAS is when EDE has been rising but TAS is dropping! That means the relative value is getting bigger!
How can EDE rise by 1.5c while TAS falls by 0.5c? Each TAS share is worth about 1.5xEDE.
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