Ivanhoe Mines Ltd. (USA) (IVN)

I had a bad time with (CAPS) shorting this stock before, but I think that that was just bad luck. It is still overvalued at a Price-to-Book of 165. It is also a money sucker, and just is no good.

This met a high level screen to indicate a sell and strong underperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balance sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
I'm testing capabilities of this 1st version of my automated, valuation spreadsheet matched with my personal criteria and see how it holds up.

big time mining play - fundamental value arbitrage @today's levels:
BUY TC & TCK
& SELL SHORT RTP & IVN

IVN has a too high valuation compared to its sales potential. It is also loss making at least until 2011.

Ivanhoe Mines Ltd. (IVN) is an international mineral exploration and development company. The Company’s principal mineral resource property is the Oyu Tolgoi Project, located in Mongolia. The IVN Group also holds interests in several other mineral resource projects in the Asia Pacific region, including the Ovoot Tolgoi Coal Mine, located in Mongolia; the Cloncurry Project, located in Queensland, Australia, and the Bakyrchik gold project, located in Kazakhstan. In May 2008, IVN completed the sale of its controlling stake in Jinshan Gold Mines Inc. (Jinshan) to China National Gold Group Hong Kong Ltd. (China National).

A gamble that China and Australia know mines. The price drop today looks like a reasonable entry point. Looking for a rebound up following the recent sell off in metals.

Gorilla copper and gold field in Mongolia...projected production is huge...risk is political but I think it's worth the gamble. Sick amounts of gold and copper. Due to risk factor, I'm putting in a stop just above 10.

They have access to vast resources

Oyu Tolgoi will get approved by mongolian gov't. Asset in the ground is undervalued.

This is purely a speculative pick based on the Mongolia contracts. In real life if you are playing this, stay abreast of the news and use stop limits in case talks fall through and just pray it doesn't gap down over your stop.

IA agreement will be passed within a month.

One of the most undervalued stocks with some of the worlds largest copper - gold resources. awaiting Investment Agreement with Mongolia within the next 2 - 4 weeks. Partner with Rio Tinot. Worlds largest customer base within 50 miles from mines. Everything prepared. ready to go. 12 month price target $ 25.- plus. 90 day price target $12-15.

The price may be volatile over the next month or so as negotiations continue between IVN and the Mongolian government and day traders freak out and jump ship on every piece of slightly negative news that they hear. The fact remains, though, that Parliament has voted to give the government authority to close the Oyu Tolgoi deal (Parliament was where the deal was stuck for the past 5 years). This removes a major roadblock.

The government is not in favor of granting IVN a tax holiday for the project, which speculators fear might cause IVN to walk. But they need to consider that there remains an incentive to stay in the deal because IVN effectively has no cash flow - they need this project (with or without the tax break) to guarantee their long-term survival, and both parties know it. Also, if IVN walks, there will be 20 other companies lined up to take over.

When the investment agreement is closed, IVN will have secured a major source of income for several decades. The share price could easily double over the next few years.

Because Silvers going up

Ivanhoe Mines (IVN) has a market cap around $2.2 billion with almost no sales ($3 million last quarter). The company has been sharply increasing debt over the past few years, and the stock trades around 10X net tangible assets. They also lack focus for a company trying to explore various mining opportunities such as coal, gold, and molybdenum. It is possible that they will strike it rich with one of their mines, but striking it rich is already built into the stock price at $2.2 billion.

Taking advantage of the lower share price due to the recent elections in Mongolia. Believe that they will get to mine eventually.

When things turn around it will be a result of the governments around the world having pumped money of all kinds into the system. This will cause a surge in inflation as economies start to tick up. That's why I've been and continue to be bullish on precious metals and the miners of said metals. Really, anything that is sensitive to inflation is a good place to be.

The armageddon nuts and gold bugs always think that gold is the place to be, but in this case that does not mean they are wrong.

You can blame TMFBreakerDave for me adding pitches to so many of my picks.

MINERAL

The gold play!

Marc Faber