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I’d like your current thoughts on KDR.
I have a substantial holding in the company purchased, over time, at an average price of $1.64.
Should I continue to hold, waiting for a performance similar to FMG, or should I start selling to give me a more balanced portfolio?
A: I don’t claim to have any expertise in regard to the spot price of lithium and related products. Like other resource companies, Kidman Resources (KDR) has no control over the price it receives. All it can control is how much it produces, and at what cost.
KDR will be a low cost producer. But, whether it is cheap or expensive at circa $1.16 depends on your view about the spot price.
Judging by the recent trading range, $1.16 doesn’t look like too bad a price. However, KDR is not a stock where I wold have a “substantial” holding, so on this basis, I would probably be a seller. It my experience, over-hyped sectors and their stocks, such as lithium and the potential application of battery technology in electric vehicles, rarely delivers for investors.
