ASX:MMA
Maronan Metals Ltd
Investment Summary
The fund managers believe that Maronan Metals Ltd (MRM) demonstrated significant potential due to a pronounced disconnect between the earnings capacity of offshore service companies and their market valuations. In their opinion, the share price, approximately $0.21 in December 2024, reflects a substantial undervaluation compared to its intrinsic worth. They invested in MRM at an average price of 33c per share, and by late 2023, they noted its fair value reaching $1.55, prompting the sale of their holding. The fund managers acknowledge that MRM was subsequently taken over at higher prices, confirming the success of their investment strategy which significantly boosted returns in both 2022 and 2023. They remain optimistic about future growth prospects for similar investments within the sector.
Commentary From The Managers
Collins St Asset Management
31 Dec 2024
$0.21
- Collins St Asset Management identified a vast disconnect between earnings power and share prices of offshore oil & gas service companies in 2021.
- Many companies were trading at as low as 20% of the replacement cost of their machinery.
- Invested in MRM at an average price of 33c per share.
- By late 2023, the share price reached what was considered fair value at $1.55.
- Collins St Asset Management sold their holding upon reaching fair value.
- MRM was later taken over at higher prices, marking a successful investment.
- The investment significantly contributed to returns in 2022 and 2023.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.