Wednesday, August 1, 2018

AEM Plunge Was Overdone

AEM reported very solid 1H2018 results in the evening of 30 July 2018 but the share price kept plunging for two consecutive days.  

I made big money in 2017 on this stock and I had no positions in it. I think the precipitous plunge was overdone due to:

1. The forward p/e is now about 5.4x
2. Too fierce the decline when its Q2 performance actually improved.
3. Volatility as mentioned by the CEO does not mean the share price has to come down. It may mean it can go up too.
4. The insiders will likely go in and buy the stock very soon again. Once people see this, some confidence will return.
5. The reasonable price level should have been 98 cents.
6. The big volume achieved in these two consecutive days can mean all weak hands have been flushed out.



When others are fearful, you must be greedy especially when the reasons for the extreme pessimism are unfounded.

I went in to get my first tranche at 75 cents. If it dares to drop further, I will buy more.

Superphang

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