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Sincere apologies but thanks to a well known website beginning with A, I have been using the wrong issued share capital in calculating a valuation for AIM listed oil penny share Range Resources (LSE:RRL). There are not 1.129 billion shares in issue but 2.357 billion. Oh dear. This does nothing to alter the sell case I have expounded for some days except to make it more pronounced. I have revised the previous articles published to reflect this minor data error on a website beginning with A.
I stand by my conclusion that I would not buy this stock at any price until it agrees a new debt facility as it is almost out of cash. Moreover if that facility is agreed I would only buy at 0.75p or less in order to give me enough upside potential to justify the risk since my estimate of fair value falls – using the correct shares in issue – from 2.4p to 1.18p. Ouch.
You can read my last three articles on Range ( and Red Emperor (RMP) and Horn Resources both of which are also slam dunk sells) in reverse chronological orders
HERE
HERE
and
HERE
There will be some buyers out there tomorrow morning – utter morons who have fallen in love with this company and have just lost the plot. One such moron “Stocktrader1966” posted the following remark in the comments section after my last article:
“Thanks Tom i will be buying these first thing tomorrow! Just like Zoltav when you slated it at 2.58p and now sits at 3.98! Can i suggest you find another career path i hear Aldi’s are having a recruitment drive, you can add up the price of beans on one hand.”
For what it is worth AIM Listed Zoltav Resources (ZOL) remains ludicrously overvalued. Even the directors admitted three weeks ago that they did not know why the shares had gone up. At 3.98p the company is valued at c£15 million. At the end of calendar 2011 it had net assets of £1.5 million but burned c£2.5 million of cash ( almost all on PLC costs) that year.
I see that its biggest shareholder recently had to inject £500,000 via a loan convertible at 2.3p. That is because Zoltav was – I bet – almost out of cash. So if Stocktrader1966 reckons this heap of shit is worth £15 million good luck to him.
As to Range, if Stocktrader1966 wishes to buy he will find plenty of sellers. If he persists in buying shares which are so patently overvalued then he too may need extra work at Aldi. As it happens Stocktrader1966 can add to the list of those he deems financially innumerate, the bear raider Lucian Miers who has just emailed me to say that he is trying to open a short in Australia at this very moment. The Bard of the Boleyn describes this as a “stone bonk no brainer sell to sub 1p.”
Go on Stocktrader1966. Fill your boots you ignorant little peasant. Range is a slam dunk sell. So too is Zoltav where my target price is 0.5p.
range up 4%
i have read some shite in my time but this just takes the biscuit !
Interesting. Is that the same ‘The Bard of the Boleyn’ that recently strongly recommended selling short NVTA at 1.2p? If so, I might just give his latest a wide berth.
Tom
For a fellow who is supposed to be able to understand markets I am rather surprised you did not realise that Puntland was mostly in the price, after-all Range was selling towards a two year low for a reason.
There is also the considerable matter of shorts closing out on the news, this was always going to create a squeeze.
You will be pleased to know that I ignored your advice and collected a large trance of RRL at the open, I am now sitting on a nice profit, thank you! Pity the folks who may have been spooked by your negative view that sold at the open expecting it to hit 1.5p!
I think it may be best, in this instance at least, to bury your head in the sand over Range!
You called it wrong sir!
tobnobcheesewinnifrith: what a wit you are. Well 50% of one anyway.
Bob. Yes
Nathan – one day is not a long time. I did not say the shares would go ro x in one day but that is what I thought they were worth. I do not making trading calls but LT assessments of what I see as the underlying value.
I stand by that view. Les chat again in a few months and see whether my valuation was wrong then. So far the market disagrees with me. It may be a short squeeze – we do not know. Time will tell.
Thank you all for your comments.
Best wishes
Tom
I do believe all of the ideas you have introduced on your post. They’re really convincing and will certainly work. Still, the posts are too short for newbies. May you please prolong them a little from next time? Thanks for the post.