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OZL

Hi M.M. I am a little confused by your comments re OZL In this mornings (27/6) edition in the section "Commodities" in your comments regarding the outlook for copper you concluded with the comment "M.M are now neutral copper in short term". On the same day you issued an Alert that M.& M. were buying OZL despite some further somewhat pessimistic comments in the Afternoon edition of the 27/6. This is a little contradictory, wouldn't you agree? The new MM 3.0 looks great As i hold OZL I look forward to some clarification of your thoughts re OZL Thanks Peter Cooke

Answer

Hi Peter – lets try and clarify our view.

  • We are unsure if Copper has found a low given concerns around a global recession, however the risk / reward stacks up around US$374/lb.
  • Stocks often lead the underlying commodity, and bottom out before the commodity does, we think OZL has potentially done that with the catalyst being the production downgrade we spoke of on the 27th – available Here 
  • We put 4% of the Flagship Growth portfolio into the position, which leaves room to add further if weakness continues. In other words, we think there is value there but are not totally convinced that a low is in place, hence the possible contradictory language you highlighted.
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Oz Minerals (OZL)
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