Source: Clive Maund for Streetwise Reports 03/21/2019
Technical analyst Clive Maund explains why he sees this zinc explorer as a good value.
To be sure, Group Eleven Resources Corp.’s (ZNG:TSX.V; GRLVF:OTCQB) stock looks cheap here and good value. It is an advanced zinc explorer based in Ireland, the Emerald Isle, and it is understood that it is very much liked by Peter Megaw, of MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) fame. MAG Silver in fact owns 21.4% of its stock (fully diluted) while Teck Resources Ltd. (TCK:TSX; TCK:NYSE) owns 4.3% fully diluted.
An 18-month chart is sufficient to show the entire history of the stock. After starting trading in December of 2017 it wasted no time in going straight into a bear market, which persisted until last November when a trading range started to form that is believed to have evolved into a Triple Bottom. With the current quite tight bunching of the price and its moving averages, the conditions are ripe for a reversal here, with the stock trading at less than a third of its price at inception. We would like to see stronger volume indicators, but these sometimes improve with the price rather than ahead of it.
Although it is of limited use technically, the 6-month chart shows recent action in more detail, and on it we can see that the stock is oversold here near to the bottom of its trading range and cheap. It is completely “off the radar” of most investors, which is a big reason why it is good value.
The attractive and interesting Corporate Presentation includes pages showing the long-term course of the zinc price and current low LME inventories as well as the capital structure and usual details about projects, management etc.
The conclusion is that Group Eleven is an attractive, good value zinc investment here, which due to its low price must be classed as speculative Because it is still in a basing phase, we cannot and do not expect it to go storming out of the gate two days after we buy it, but on the other hand it is certainly not overvalued, and when it does decide to move it should make good percentage gains from the current price.
A disadvantage for company employees recruited from overseas is the rotten cloudy damp maritime climate in Ireland, but this can be mitigated by listening to Irish music in pubs, assisted by drinking Irish beer, songs such as The Orange and the Green, which is about a lad who turns the apparent misfortune of having a Catholic (Irish Republic) mother and a Protestant (Ulster) father to his advantage. Here is a clearer version with lyrics and a version including the U.S. Army Band in Florida.
Group Eleven Resources website.
Group Eleven Resources Corp ZNG.V, GRLVP on OTC, closed at C$0.12 on 18th March 2019.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
( Companies Mentioned: ZNG:TSX.V; GRLVF:OTCQB,