LONMIN has been languishing below 10c per share (on a pre-consolidation adjusted basis) for ages. Now a break to 12c. Utter shareholder value destruction - fortunately that was for the account of previous benighted investors (so far.) This is an interesting call option on platinum! Worth a dabble - perhaps on a drop back to 10/11 I would look at accumulating more...
dude, not more than a couple of weeks ago you were complaining about how difficult it is to offload thinly traded stocks. London is so thinly traded these days, you are going to fall into the same trap here. Whatever money you put into Lonmin, just know that your trade is all or nothing - the very real scenario is that you will lose 40%-50% of your bet at the slightest hint of more bad news.
Full disclosure - I have taken a slug of this seemingly horribly undervalued asset (or maybe just a horrible "asset") now - so - no negativity please. I am firmly in the see no evil, hear no evil, speak no evil camp until I sell them. I decided short the banks up at NED R188, BGA 142, SBK 113 - so my LONMINs are pretty much free anyway.
I can't argue with that - but I see it as a put option on the ZAR and a call option on Platinum / Paladium. The ZAR is not looking like it has much of a future. PT and Pd are trading at historic lows to gold. Sooo... Even if things stay as they are and LON achieves her R10400 costs she will be heading for full year all-in profits of R10 per share.
Personally - I have sworn off most S African shares but especially financial shares for a host of reasons. There is such unemployment headed our way - that there just have to be huge defaults on the cards. If the ZAR blows out - these shares will be in big trouble for similar reasons. If the government follows the example of our neighbours up north and tries to peg the ZAR - I would not like to be holding banking shares. I my opinion they are, in terms of their basic business model, about as close as you can get to an anti-hedge.