Market Cap = $12m
Cash = $2.5m
EV = $9.5m
Smoke is billowing over at WCN. At an EV of $9m this is the cheapest exposure to Australian cobalt on the ASX (in conjunction with MTH not included in this graphic):
View attachment 998671
The threads are toxic and would not advise anyone to head over there unless they want an earful from severely stale long term holders. Every dog has its day though and the once-dogs provide the biggest returns (look no further than KRC, VEC).
WCN looks like a clear turnaround story. Here are just some of the reasons why:
1. Cheapest Aus cobalt exposure as explained above
2. CPS have recently come on board underwriting the current $1.6m rights issue. These guys of late have been behind CTM, DYL, MLM all have been multi baggers from their entry. Unlike some of the prior brokers onboard WCN these guys are more interested in bags than pips or fees.
3. Options issued earlier to Gleneagle Securities have requirements of VWAPs above 0.8c and 1.2c to vest. Hence incentives in place for higher prices.
4. Management recently buying up on market (albeit small) adding to large existing holdings. Todd and Michael both scooping up shares on market on March 2. There is only one reason a director would buy up their own stock and that is to make money. Hence clear incentives in place for management to take this higher.
5. The chart looks beautiful as its been basing and churning now for months on end and ready to break out. Once it breaks above that 0.4c resistance it will be off to the races and you'll see exponentially increasing volumes. It just needs some short term catalysts to take it over that 0.4c mark but what are they?
Management has recently announced that cobalt drilling will take place throughout MARCH. The reason the stock has been held back is currently sitting at its lows is because of the stale long term holders that want to torch management for inactivity. Well now surprise surprise CPS jumps on board and they are suddenly drilling for cobalt with the metal at multi-year highs. Any sniff of cobalt on those drills and this stock given the negativity will go bananas just like KRC did recently for Vanadium.
