Tuesday, 12 February 2013
Paternoster Resource is a company that caught my attention back in early 2012, With fantasy storeys of £16m manganese plants in South Africa or unfounded claims of RTO, Buyouts big Jv's and basic ramping across multiple bulletin board outlets I started to look at the company and value what they had. The reality at the time was the company were just shy of £500,000 cash and with a single actively moving investment in a company shroud in mystery and myth ~ Leeds resource. £400,000 approx Invested.
The other position was held in BRDY a shell or blanket company.
Pretty sure enough the weird and wonderful world of what was then viridas and the dizzy highs of nonsense posted by no other than our old friends Drosso2, Wassatt and HandiGhandy (The latter who seems to have like a Phoenix to the flame re-appeared) Imploded on lies and slipped away onto Angm (Who are now suspended or Tstr who have far to many shares in issue to be taken serious)
The company as i pointed out in Feb 2012 and always was earmarked as a investment company which is exactly what it is in its current format, Any negative thoughts that a acute fundamentalist may have were quashed when Nick Lee sold out the position in Leeds resource for £2.8million after the initial £400k capital invested leaving 166m warrants at 0.15p with no risk associated and a very burly balance.
The fact that Nick Lee has come from financial workings and not sat on a digger in a open cast mine or sifting for gold nuggets showed it didn't take rocket science to piece together what was about to come. With the newly converted profits Viridas changed name to Paternoster Resource to reflect the new company and management team in place namingly Mr Lee, the company were making steps forward. The disappointing thing lost by the retail world was the pumping of the stock by uneducated or worse unscrupulous people sending out more red herrings and white elephants than a fictional murder mystery novel.
Nick continued to prove his metal by taking positions in other resource stocks in the sector where to date the company has a healthy investment portfolio value which is starting to join together the hard work done behind the scenes during the 2H 2012. There is no denying that the Asta Investment to date has not been great yet we are hearing all the time that all is not lost with plenty of work being done to salvage that position, Not to be overlooked is the QFi investment taken from 7p at the placing price which is today approx 100% up or the Ipso (PLR) position taken at 0.25p now 1p which seemingly are mirroring the early 2012 coup in Ldp.
The direct correlation between the investments that have been taken and the value reciprocated is easy to see and as the company release data on there end of year accounts with investment disclosure from Bison Energy, Andiamo or Shumba coal its my opinion that Paternoster are simmering on the cusp of greater things.
I'm not focusing on the value in this review as it has been done before here: http://www.stockopedia.co.uk/contributors/sean-benn/
I will be updating the layman value once further disclosure comes but the fundamentals are PRS have a strong cash position to support a rewarding and diverse portfolio. But please don't take my word for it! Assign half an hour to do the sums.
There will be no funding drive here, I don't anticipate anything other than normal market fluctuations. The Technical view is the stock is in a bullish trend trading above the 200Dsma. Always take some off the table and spend more than just the time to mutter or think the words '' I'm aware of the risk '' As very often people love to take risk in stocks when its going there way but generally cannot take the risk when it works against them as they sit at the terminal growing in frustration at a bad trade or investment.
Currently the stock is trading at a 40% discount which is similar to that of my last review via stockopedia after a 35-40% rise but this is due to further investment and portfolio value increasing. The information is in the public domain. For anyone sharing concerns over the recent Zoltav Resource article Tom Winnifrith published which I agree with him on when he says there overvalued based on association and asset valuation.
I disagree to 44m or 7% of the company having any drastic effect should they come to market, As days in Mid January 100m shares exchanged hands over a few sessions. So for me the risk of what may happen if Zoltav do possibly unload stock is of no real concern. However the issue of Zoltav highlights the value of Paternoster when you offset the companies against one another something I did highlight to Tom a few months back was Paternosters Market cap was about to grow from £1.4m.
Investment companies like this often trade at a heavy discount but looking at the peer group non are revenue or profit making like Paternoster and most are over valued or shouldering heavy loss like TXO or LEG.
Alot more to come from Paternoster Resource and not so darn long winded. Enjoy the Journey
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