''VNP's investor relations is virtually non-existant''

5N Plus Inc. announced today that its President and CEO, Jacques L’Ecuyer, took the top prize in IR Magazine Canada’s awards program in the category “Best Investor Relations by a CEO – Small Cap”. 


I've been looking at this stock for about a month and can't fully understand the business model. I would suspect the company buys non refined bismuth (or whatever else raw material) then adds value by refining it and selling it with a margin. Technically this model should not be affected by price movements in the metal, but my best guess as to Q4 lower margins and inventory write off is many metals prices dropped fast in the back end of 2011 so the company bought its raw materials at higher prices during Q1 Q2 and stuck selling them at lower prices. They have a low inventory turnover (2x to 3x per year) so they hold the raw materials for long periods. Volatility is their biggest ennemy. With prices more stable in Q1 2012 the margin should come back. This is my opinion.


Adjusted EBITDA for Q4 was 7.3M$. If you take worst case and annualize this for 2012: 29.2M$. Stock today is trading at 7.7x very depressed EBITDA. I think Q1 2012 will confirm this stock is not expensive.