The logic behind the initial tip was that ferrochrome prices, set on a quarterly basis in talks between producers and customers, appeared to be at a bottom, but they fell further.

Questor deemed in December that the shares, with most of the bad news priced in, were worth holding on to, and yesterday, as the company announced interim results, the message from David Kovarsky, chief executive, was that he could see the "light at the end of the tunnel".

IFM mines ferrochrome in South Africa. Between 80pc to 90pc of ferrochrome is used in the production of stainless steel, which is used for a wide variety of purposes – from making cutlery to constructing building façades. Stainless steel consists of about 18pc of ferrochrome alloy. IFM is listed in London, although its operations are located in the North West province of South Africa, where the majority of global ferrochrome supplies are found, and the head office is in Sydney.

IFM's results for the half-year to December were a sharp improvement on the depths of the previous half. Sales volumes increased 35pc, revenue rose 77pc to R452m (£37.6m), and the loss before tax narrowed from R429m to R145m.

These figures were still significantly lower than those recorded in the second six months of 2008 – when revenues were 14pc ahead of the latest data – but the upward trend should encourage investors, especially given the difficulties posed by the low ferrochrome prices and a strong rand.

The company appears to have weathered the storm robustly and used the period to take a tighter grip on costs. A partnership with Anglo Platinum, announced last week, will deliver 30pc of IFM's ore requirements at only the cost of transport, while a co-generation plant, due to launch later this year, will allow the company to generate 10pc of its electricity requirement – a major cost – by harnessing gases that naturally occur during processing.

The key, though, is that Mr Kovarsky referred to a "significantly improved" ferrochrome market with rising stainless steel utilisation rates in Europe, the US and China. Economic recoveries in those areas should help to drive up the ferrochrome price and belatedly deliver the value Questor identified last summer.

"This is the most positive I have felt since October 2008," the chief executive said.

The stock has gained 33pc since the gloom of our December analysis, but investors should hang on for the brighter outlook.