scroll

Mineral Resources

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 09/11/2024

Mineral Resources

(MIN) Mineral Resources Hi James, I have been considering (MIN) at these low levels with the outlook for demand from China reasonably positive if the next stimulus is made. However, I must be missing something because out of 17 Brokers following the stock 52% recommend it as a Buy with 24% Neutral and 18% as a Sell. The Consensus Broker forecasts on Fundamentals are terrible for the next two to three years: PE 43x , EPSG -49% in 2024 falling to -244% in 2025, Debt/Equity 124%, Interest Cover only 3.9x, Free Cash negative-$2.443 M, Yield 0-1%. It looks like a Basket Case, compounded by the Scandal of the CEO resigning and the Chair retiring and lacks direction. I think it is overpriced at $38.00 but obviously I am missing something as you still have it in the Active Growth Portfolio although showing a big loss? You don't often get them this wrong so I would appreciate your thoughts

Answer

Hi Richard,

MIN are in an investment phase, spending money now to (hopefully) recoup multiples of it in later years. FY24 showed a small $158m profit, while FY25 is set to show a $200m loss which is obviously not great, however that is the nature of the business they are in, and indicative of their stage of development. In FY26, net profit is expected to increase to north of $500m then up from there. On FY26 numbers (we appreciate a long way out), MIN would be trading on a PE of 14x. We assume you are looking at a net debt figure of $4.4bn which would be the number as at June 30, though with recent asset sales, that has more than halved.

You are right in thinking it is a “basket case” on the numbers you are looking at, however, they describe a point in time, and the reason to buy or sell a stock is all about the future, and how cash flows will evolve.

The short answer to this is that the dynamics of MIN will improve materially in coming years, and while the headlines are very negative right now, we’re confident they will turn. Share prices ultimately follow earnings, and MIN earnings are set to materially improve, hence our patience.
Its been a tough few weeks but we don’t believe it’s the time to throw in the towel now.

chart

Mineral Resources Ltd (MIN)

LAST UPDATED 08/11/2024 11:54

Latest Reports

Afternoon report 09/05/2025

The Match Out: Positive US-UK trade talks fuel ASX rise

Technology stocks led the way today as the market opened a soft +10pts higher but quickly gained momentum following a positive session in the US overnight where risk-on sentiment fueled small caps higher after framework around trade policy between the White House and the UK firmed – a 10% base, though potential rollback of certain tariffs remains in play.

Morning report 09/05/2025

What Matters Today: Are Real Estate stocks still a Buy?

The ASX200 embraced the rumours that Trump's much-awaited “good news” was a trade deal with the UK, which, on top of the previous day’s announcement that the US and China would sit down and talk this week in Switzerland, was enough to lift the local index up +0.16% after a soft opening.