Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James, I found your comments always valuable. I read somewhere (forgot the name of the article) the China is gearing up to switch to the use of scrap metal instead of relying on iron ore for steel production. This seems to benefit the likes of SGM. What is your view on the SGM stock short term and medium term? Thanks and regards Gregory
Hi Gregory,
These articles pop up with Iron Ore prices rally – essentially, scrap becomes more valuable when Iron Ore prices are high and less valuable when they are low which makes total sense.
It sounds like we are on the same page, we like Sims Metals both fundamentally and technically:
Short-term after its recent 13% pullback we are bullish targeting fresh highs up towards $24, around 12-15% higher.
Medium-term we again still like the stock and company but in-line with our “sell the pop” mantra for 2022/23 we wouldn’t be surprised to see another pullback towards $20 but until further notice this is a company we like into weakness.
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