Morning Report Monday 20 October 2014
**Transfield (TSE) receives Takeover Bid from Ferrovial at A$1.95/Share**
Look at Cliff Resources, do we underestimate the risks to the local stocks?
On Friday night, Cliff Natural Resources (CLF.US) a US company, fell 8% after announcing it expects to write down iron ore & coal assets by approximately $US6 billion. While the company is significantly smaller than Australia’s dominant 3 Iron Ore producers, it yet again illustrates the risks of being a “price taker” and hence not being in control of your own profitability.
Since the highs of 2011 (not even pre GFC), Cliff Natural Resources is down 91% and Vale is down 71% - Vale is the largest Iron Ore producer in the world.
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