I recently bought then sold a stock 3 weeks later for a 65% gain.

The stock was Gullewa Limited (ASX:GUL).

Here I will tell you why I bought and sold it.

Gullewa Limited, established in 1953 and headquartered in Sydney, Australia, operates as a diversified investment holding company. Its primary activities are:​

Mineral Exploration & Royalties: GUL is engaged in the exploration and evaluation of mineral properties, particularly gold and base metals. The company holds a 1% royalty interest in the Deflector Gold-Copper Project and the Gullewa Gold Mine Project.​

• Property Development: Through its subsidiary, Gullpro Pty Ltd, Gullewa holds a 69% interest in a land subdivision project located in Aberglassyn, New South Wales.​
• Investments: The company invests in shares of both listed and unlisted entities, contributing to its diversified portfolio.​

Additionally, Gullewa's wholly owned subsidiary, Central Iron Ore Limited (CIO), focuses on gold exploration in the Darlot region of Western Australia, operating projects such as the Red 5 Joint Venture and the British King Gold Mine.

Why I bought the stock

This was a simple trade.

I bought GUL on 26 March at $0.048 per share or a market cap of around $9m.

Why I liked it:

• It made a predictable profit ($2.2m over the trailing twelve months).
• It was selling for the value of its cash ($9m).
• It was selling at ~half its 10-year median P/B (0.4x vs 0.7x).
• It was selling at less than half of its 10-year median P/E (3.9x vs 8.3x).

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They say Ben Graham style investing is dead but this seemed like a Graham style opportunity to me.

I didn’t know when the stock would go up but at this price I could afford to wait.

GUL was trading at a 0.4x P/B. It had a 10-year median P/B of 0.7x but had recently traded at 0.8x. I figured it could easily revert to this range. With total equity of ~$22m this would mean a market cap $17.6m. GUL had 218m shares outstanding so that would mean a share price of ~0.8c.

Developments

On 4 April Gullewa declared its maiden fully franked dividend of AUD 0.007 per share, payable on May 7, 2025. Based off the previous day's closing price of AUD 0.048 this meant a dividend yield of ~14.5%.

Selling

I don’t know if the dividend announcement brought the stock to the market’s attention but over the coming days the stock traded up to 7.9c. I had a price target of ~8c but with whole numbers often being areas of resistance, I decided to sell at 7.9c.

Looks like I jumped the gun, The stock closed at 9.5c the next day and recently hit 9.9c.

I can’t be mad though; I had a plan, and I stuck to it coming away with a 65% gain in just a few weeks.

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Closing Thoughts

This was a tiny company, meaning big players ignored it. It also traded infrequently and small amounts of volume, meaning it was hard to invest large amounts.