I had a quick look, you knew I would, I love copper and this is all copper. We are not talking AVB space here, they had US$1.6b revenue last year. But I have to say I would not buy this, ROE is in bottom quartile and I mean bottom, 2.8%. (space is avg +20%) The other thing I noticed is the next couple of years look a bit of a slog, analysts expecting the ROE to be -1% for next few years! But hey, the SP is 30% YTD, go figure? I think analysts are out by a large factor on copper, perhaps investors who pushed this up that 30% agree with me and think it's all pulling forward ? I can tell you they must see copper well above $3.
I like AVB heaps, I am in love ( mind you the next 9 year who logs on here will tell folk not to fall in love, he read a book you see ) you know I hold Freeport, but what most don't know is they are not pure copper and nothing like it, they have heaps of other interests, gold, oil and gas etc, in fact oil and gas smashed them, copper is the white knight which will ride in
Just need copper to set in a above 2.40 and 2.70 is easy as, next year $3 is child's play, I am a long player looking to sell on coppers euphoria and that is not $3 in my books. Accelerant I expect to be thrown on the fire earlier is inflation, I expect Japan to bury the bogy and grow +2%!, they were on the way before Trumpflation. In short the volatile liquid is interest rates, in terms of copper, sure watch the falling grades, reduced projects, increased uptake etc. But it will be interest rates which slams big pure copper producers, they have absolutely massive debt, been living on it for 6 years, time bomb IMO.
AVB zero debt, very good cu grades and no shortage of reactively cheap local copper prospects.
You will say it's gone up from 6 so happy enough that you are green, if you have owned copper in the last 6 years, you have been bashed about the ears, don't be deaf to the cycle, without some world or monitory catastrophe this is so cheap it's crazy.
All IMHO, hope it helps.
Cheers
Phil.
AVB Price at posting:
7.1¢ Sentiment: Buy Disclosure: Held
, I love copper and this is all copper. We are not talking AVB space here, they had US$1.6b revenue last year. But I have to say I would not buy this, ROE is in bottom quartile and I mean bottom, 2.8%. (space is avg +20%) The other thing I noticed is the next couple of years look a bit of a slog, analysts expecting the ROE to be -1% for next few years! But hey, the SP is 30% YTD, go figure? I think analysts are out by a large factor on copper, perhaps investors who pushed this up that 30% agree with me and think it's all pulling forward ? I can tell you they must see copper well above $3.
