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drbubb

Central Asia Gold (au.CGX)

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...i pinched this idea, and the following excerpt from GoldandOil Blog, which is worth visiting...

 

Central Asia Gold (dual quoted: au.CGX / v.CGA

 

CGX is loaded with Cash from the sale of AGR mentioned above. In fact for the year end June 2005, Free Cash Flow was 45c per share. CGX currently trades at AUD$0.47 per share. Which means that there is a LOT of spare cash at managements disposal.

In addition, net book value per share at 60c makes the 47c share price look very cheap.

CGX also carries very little debt.

 

There was a flurry of insider buying at the end of December 2005. This buying was the result of insiders exercising options (below market prices) and probably as a means of Cashing out before the bulk of the bad news hit!

 

All in all, it has been a Torrid time for existing shareholders but has also created a very Good Value Play.

 

Technicals:

 

To fully appreciate the action in CGX it’s best to look at a 3-year Weekly chart:

image006.1.jpg

 

Chart 3 - CGX has support at 40c

 

2005 was a horrible year for CGX. The share price slid from $1 to a low of 40c. A 60% drop!

Is the worst now priced in?

I think so.

Support at 40c looks to have held for now (blue line).

 

= =

 

(I plan to invite analyst, Greg Silberman, to visit GEI and post here)

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