Saturday, December 3, 2016
Mongolia Growth Group prospects are getting better
Mongolia Growth Group disclosed several materially positive developments in its third quarter earnings release, yet the stock is 20% lower today.
An “October surprise” essentially doubles the co.’s cash balance and provides tangible evidence suggesting MNGGF’s book value may be dramatically understated.
Investors may not be aware of these developments, as they occurred subsequent to quarter-end. Management buried the details at the bottom of the 3Q quarterly report and didn’t issue a press release.
Pro-forma cash should comprise over 30% of MNGGF’s market cap: The co. is debt-free and posting a sharp positive inflection in operating results, hence, a very attractive entry point.
With the news that I posted yesterday that Mongolian coal exports are surging and that Mongolia is getting far better pricing than in the recent past I think it is time to get bullish on Mongolia. Readers know I have been a long suffering bull on the country and I continue to believe that the several trillion dollars in mineral wealth will eventually get unlocked and it will benefit MGG and their real estate holdings in the country.
The stock is really cheap and extremely undervalued at this point and is basically a long term call option on Mongolian growth.