Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Team, Thank you for your continued excellent daily, weekly and special commentary which I love reading. My question today is: Considering the write-downs that South 32 will experience this financial year, US$1.3B from their Hermosa Project, and that MM has had them on your watch list for some time, is it time to take the leap of faith. Or wait to see if their share price drops below $3.70 ?
Hi Rob,
A good question as its one we’ve discussed a few times over recent weeks but at this stage we’re remaining patient enjoying the flexibility some cash offers through reporting season, a time when opportunities often arise – South32 (S32) reports on the 24th of this month.
We actually believe that S32 may have already at least partially cleared the decks ahead of its report but the trend is not great for miners at present as China struggles to convince investors it can kick start its sluggish economy while costs continue to weigh on profitability. Hence we remain on the side-lines but we do anticipate pressing the “buy button” in the coming months.
Interestingly S32 coal miners went on strike late this week and the stock only slipped ~1% suggesting to us value is starting emerge.
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