In This Issue
Challenger Gold has been overlooked by the market
Last week I said that there was a significant improvement in sentiment. There was, but you have to remember that instant gratification is not normal in the market. Sentiment can improve strongly, and then there is a pause and often a pullback while recent movements are digested. Thinking investors prefer to be disciplined. Rather than keep chasing stocks that have already moved, they will wait to see if any sellers move in to take advantage of the recent rises. Further buying will come along once the dust has settled. That is how rational markets work.
Challenger Gold (CEL) is a mid-sized small cap gold company capitalised at around $76m. It has useful assets in Argentina that have for some reason not been fully embraced by the market, notwithstanding the apparent value. Let's have a closer look to understand why.
The share price fell from 9¢ in April to hit a low of 4¢ in August at the same time as the gold price was performing strongly. Thus there has been a disconnection. The price has recovered a little over the last month, but there is room for further improvement as the high grade scenario becomes more immediately tangible. It is difficult to see anything but upside from these levels, particularly if the gold price keeps rising.
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