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

Weekend report 31/05/2025

Weekend Q&A: As we approach the EOFY, the ASX200 is flirting with its all-time high

The ASX 200 rallied on the final trading day of May, closing up +0.3% for the session, leaving the index just ~2% below its all-time high. Overall, an excellent performance by the Australian bourse, advancing +3.8% for the month, shrugging off the ongoing uncertainty around tariffs and rising long-dated bond yields. However, a more dovish than expected RBA, a strong banking sector, suspicions of overseas buying, and a market caught underweight stocks after their dramatic “V-shaped” recovery from Trump's “Liberation Day” was enough to drive the local market back towards the 8600 area. With pullbacks well supported in one of the most hated bullish advances that we can recall, it makes for a compelling argument that new highs are just around the corner.

Afternoon report 30/05/2025

The Match Out: Sell in May (& go away) not the go this year, ASX gains 3.8%!

The final trading day of the month carried the ASX to a 3.8% gain over the period and now within ~200pts of all-time highs with investors brushing off tariff risk and shifting focus back to fundamentals.