A little token of appreciation for the community allowing me to post my rants and skeptical/shorts analysis. Not financial advice. This report is not completed yet, I will post the whole thesis sometimes next week. But, this is an interesting contrarian/ cigarbutts situation that may turn out extremely well for the patient investor. Do your own due diligence. I am just spy-hopping ideas here and there.
Grange Resources (ASX: GRR) The Market Is Literally Paying You to Own This Iron Ore Business.
The company has A$284 million in cash on the balance sheet. The entire market cap is A$185–231 million. That's it. You're basically buying a dollar of cash for 65 cents and getting a 55-year-old operating iron ore business, a pellet plant, and one of the world's largest undeveloped magnetite deposits thrown in for free.
The stock is down -71% over three years because iron ore prices fell off a cliff and management kept delaying their big underground mine project. Market hates it. Hence the price.
Why it might actually re-rate:
The underground mine financing just cleared due diligence. lenders are now being formally engaged.
Cash keeps rising despite the earnings downturn.
Their iron ore pellets are exactly what "green steel" producers need long-term (high-grade, low-impurity)
Net equity value is A$0.93/share. Stock trades at A$0.16–0.20. Someone's wrong.
Risks
Chinese state-owned enterprise controls the company. Board serves Jiugang first, you second.
Iron ore can fall further. Margins are thin right now.
Dividends went scrapped to preserve cash.
Conclusion:
This isn't a trade. It's a 3–5 year Graham-style "buy assets at 20 cents on the dollar and wait" situation. Can it workout? A think so, but I am expecting volatility until catalyst spring forth and investors scramble into the bargain. You can beat the crowd by getting in line early.
Look into it and run your own numbers and analytical framework.
xoxo.