Firestone Rises After Broker Says Stock Undervalued (Update1)
By Elena Moya and Catarina Aleixo
London, June 1 (Bloomberg) -- Firestone Diamonds Plc shares rose 41 percent after Charles Stanley, stockbroker for the U.K. diamond exploration and production company, said the stock's fair value was more than double its current price.
Analyst Robert Corden of Charles Stanley issued a ``buy'' recommendation on the stock, saying that based on the company's current mining capacity, its share price should stand at 120 pence. The shares closed at 55p, up 16p, the highest percentage gain on the FT-SE Alternative Investment Market.
``We think that based on its existing mines, (Firestone) is worth 120p, and that will rise to 270p in a year's time,'' said Corden. ``And if they start production in the Botswana mine, they could go to nine pounds.''
Firestone said April 26 it increased its exploration area in Mopipi, Botswana to 2,000 square kilometers from 85 square kilometers after exploration results in the area exceeded expectations.
Firestone's shares have risen 15.79 percent this year. At current prices, the company is valued at 16.72 million pounds ($24.91 million).
By Elena Moya and Catarina Aleixo
London, June 1 (Bloomberg) -- Firestone Diamonds Plc shares rose 41 percent after Charles Stanley, stockbroker for the U.K. diamond exploration and production company, said the stock's fair value was more than double its current price.
Analyst Robert Corden of Charles Stanley issued a ``buy'' recommendation on the stock, saying that based on the company's current mining capacity, its share price should stand at 120 pence. The shares closed at 55p, up 16p, the highest percentage gain on the FT-SE Alternative Investment Market.
``We think that based on its existing mines, (Firestone) is worth 120p, and that will rise to 270p in a year's time,'' said Corden. ``And if they start production in the Botswana mine, they could go to nine pounds.''
Firestone said April 26 it increased its exploration area in Mopipi, Botswana to 2,000 square kilometers from 85 square kilometers after exploration results in the area exceeded expectations.
Firestone's shares have risen 15.79 percent this year. At current prices, the company is valued at 16.72 million pounds ($24.91 million).
