Even if it takes 2 years for the price differential to occur(it doesn’t need to go to the lows of feb21 ie sub 50) when demand falls and supply increases it will fall. I don’t trust the government one bit regards their 2030 cng infra plan but cng infra but even assuming half their plan plays out and supply comes back to normal Everest kanto should do well in the long run. They don’t have much debt and they have cash… so even if their profit is in low single digits(or negative) for a few quarters that just means a slowdown with expansion and no dividend(already paltry) and they won’t go bankrupt(and even if they do they can sell some of their assets etc. That’s the beauty of buying around book value. The above is the worst case scenario though. Ideally they can move towards increasing production in other products ie hydrogen/price differential comes back/infra story plays out and this turns into a 40 eps per year and 20 PE company in 2 to 3 years. I like the risk vs reward here especially since I’m putting a very small amount on the line that i can live without(since i have only 1 tranche invested with one more this quarter and the rest when things look a bit better next/the quarter after) and I’m already expecting the price to fall to low 70s and stay stagnant for some time.
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