Highfield Resources has one of the least ambiguous investment propositions
Highfield Resources has one of the least ambiguous investment propositions. It is holding out the prospect of a 40-50% annual return between now and 2020 from development of its Spanish potash deposits in recent presentations to investors. The projected return comes from applying current EBITDA multiples attaching to comparable businesses to the results from a recently completed feasibility study. Taking this analysis at face value still leaves an investor with an important decision: whether to buy now with the accompanying opportunity cost risks over more than five years or wait until closer to the first earnings when the price is more likely to be re-rated. This is a key investment judgement being highlighted in the upcoming PortfolioDirect rating review of Highfield Resources.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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