A play in NST is by definition a vote for a bounce in the gold price which is our preference at this stage as the recovery in the $US runs out of puff. In our opinion this is one of the cheapest market groups and if we do actually see a recovery by precious metals the stocks should follow in a very leveraged / amplified way. At current prices, the risk / reward is simply very attractive.
NB We are already committed to Newcrest (NCM) in the sector and hence unlikely to be buyers but as a stand-alone call NST looks great here.
MM likes NST targeting 25-30% upside
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