The great trap in the current share market, where sensible investors buy nothing, is to look at how much cheaper your shares are now and think, "Gee, what a bargain!"
Buying the bargain is often just "throwing good money after bad".
That's one reason for the Punter not to buy Terragen Holdings (ASX code TGH).
He last bought TGH two years ago at 29.5 cents each. Now they are 2.2c. What a bargain!?
The March quarterly report showed sales were down 16 per cent on the previous corresponding quarter.
READ MORE: GrainCorp shares jump 18 per cent in a week
The company has a new leadership team and started slashing costs (including directors' fees). Hmm.
Last week it announced initial results from a longitudinal study of feeding its flagship supplement, Mylo, to 122 cows over 16 months.
The results point to a 10pc increase in milk flow (an extra 2.3 litres a day).
That's three times higher than the 2019 figure from a Queensland University study. But the results have not been independently assessed.
On the other hand, the cost-cutting resulted in a positive cash flow in the latest quarter, and Terragen had around $4 million in the bank at the end of March.
The cows in the trial were fed 10ml (11c worth) per head per day, but the company is already gathering data to back up indications that a larger dose would be even more effective.
There is anecdotal evidence that Mylo also improves weight gain and health, reducing the need for antibiotics.
Terragen has begun producing dry Mylo with a longer shelf life than the current liquid.
The Punter, whose investment decisions are not always sensible, has ordered 100,000 more TGH shares.
He has put a limit of 2.5c, which makes him the highest bidder on the market, but trading in the stock is so thin that he would have to pay up to 3.7c a share to fill the order immediately.
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