children of an idle brain

Who knew about Atico Mining (ATY.v)? Readers of The IKN Weekly knew

In IKN376 dated July 24th 2016, the main event was a 12 page analysis of Atico Mining (ATY.v) which forecast the company would post a loss in its 2q16 financials but it didn’t matter, the stock was cheap and a good buy. 
This week it reported its quarter on schedule, it posted the expected loss but since then this is what’s happened to the stock:

Yup, right on the button. ATY.v is up 34% in the three weeks since this conclusion section to the note was written.

Weekly recommends Atico Mining (ATY.v) as a buy and sets a six (not 12) month
share price target of C$0.70 on the stock, representing a 59% upside from this
weekend’s CAD$0.44.
The price target is predicated on the main catalyst, which
is that ATY will indeed be able to cover its debt repayment schedule during
2016 and once it has got to the end of the year, the market will re-rate the
stock on its stronger fundamentals and proven capacity to make profits even at
the current modest prices levels for copper. I’m going for a target based on a
reasonable 1.2X price/book ratio once people see the balance sheet clean up,
which may turn out to be a staging post for greater things. An eventual stock
price in the mid-80s wouldn’t surprise me in the least.

What ATY offers today is a trading
advantage, it’s clear to me after running the numbers that ATY isn’t in the
type of uncertain financial position that most people assume. It’s going to
file a weak looking set of 2q16 financials with sales and a bottom line loss
that those who aren’t looking may consider a reason to sell or avoid, but the
key to understanding this stock isn’t in the P+L, it’s the balance sheet (“it’s
the economy, stupid”). If copper prices improve then so does this stock, that’s
a given but even if they don’t, ATY‘s going to be just fine and that makes for
a very low downside risk attached to an entry either today or when the 2q16
financials come out in mid-August. Low risk balanced against high potential
reward is my kind of equation. I will buy some ATY.v in the week ahead and it
will become part of the ‘Stocks to Follow’ list as from next weekend.
That’s type of thing you’re allowed to write if you actually understand mining company numbers, instead of pretending to understand them. Any further questions?

UPDATE: Here’s a free offer that comes after receiving a suggestion from a reader. If anyone would like a free copy of the full 12 page report on Atico Mining (ATY.v) from IKN376, just send a mail into the usual address…

 otto.rock1 (AT) gmail (DOT) com

…and put “Atico Report Yes Please” in your title line. I’ll send you over a PDF copy of the whole analysis by return (and unlike the scamsters at Stansberry Research or Casey Research you won’t get a whole barrage of marketing mails from me afterwards, it’ll just be that one and that’s a promise).

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