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South32 Ltd (S32) $4.46

Diversified miner S32 has suddenly corrected over 20% from its early March $5.44 high, only a few weeks after many analysts were calling the stock to $7. Investors should never forget that the resources stocks are cyclical in nature where earnings are largely dictated by the price of the underlying commodities which it produces i.e. what looks great today for S32 may not be the case next month if the likes of coal, nickel and zinc prices fall.

We like S32 into weakness especially after it delivered a solid result in February which saw EBITDA up 138% to $US1.87bn but we are mindful of how crowded the resources space remains which could easily lead to a stampede for the exit door.

S32
MM likes S32 down towards $4
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South32 Ltd (S32)
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