Motley Fool3 Jun 2022 23:36
Not worth the electricity needed to light their pixels!
Ronald is Martin Lewis compared to Motley!
Three different corresponds have all explained their reasons for not recommending Woodbois and all three might change their minds simultaneously when it suits!
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Paul Summers
Paul has been teaching psychology in higher education since 2007 and also holds the CFA Society's Investment Management Certificate (IMC). It won't come as a surprise to learn that he's particularly interested in anything related to behavioural finance. A Terry Smith-influenced quality investor, Paul is a fan of companies boasting seriously high returns on capital. He always reinvests his dividends.
"What’s going on with Woodbois shares?
Let’s start with a quick recap. In its own words, Woodbois is an “African focused forestry, timber trading, reforestation and voluntary carbon credit company“. Aside from some positive noises on recent trading, I think it’s this last part of the business that’s getting some investors excited. As evidence of this, Woodbois shares more than doubled in value between April and May.
But let’s not get carried away. Woodbois is still a penny stock. That’s usually a recipe for volatility. And, so far, that’s exactly what holders are getting. Shares are down a little over 25% from their recent high."
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Jon Smith
Jon is an experienced private investor from London. He specializes in macroeconomics with his articles often incorporating the state of the economy into specific stock recommendations.
"Finally, I’m in no way an expert in the sector that Woodbois trades in. It’s an African-focused forestry company. It produces and trades hardwood products globally. I’d really need to do a lot more research before I’d feel comfortable buying. On that basis, I won’t be investing, even at current share price levels."
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Christopher Ruane
Christopher Ruane writes on UK financial markets.
"But I definitely do not think it is a bargain for my portfolio. The lack of consistent profitability concerns me. The industry’s low barriers to entry could constrain future profit margins. I am particularly concerned by the company’s risk profile. Its footprint in Gabon involves political risks I may not be well-placed to assess.
So despite the Woodbois share price being in pennies, I will not be adding it to my portfolio."
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Separately , same author!
"Political risk
Next, my question is: where is Gabon? Maybe you could pinpoint it on a map, maybe you could not. Either way, Gabon is important to the performance of Woodbois shares as its sawmill and factory are there. Concentrating production in a single location can increase risk in the event of something unexpected happening in that place. On top of that, if it is a country with heightened political risks, that could hurt the share price should things go wrong."
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HOLY COW!
Self confessed ignorance and all 3 AR
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