Morningstar snippets.
We retain our Buy recommendation on AGO up to $3.50 a share.
Strong free cash flow, a large net cash balance and achievable production growth make it our preferred iron ore stock.
Our fair value falls 10% to $4.30 a share.
The resulting EV/EBITDA multiple of 4x is cheap. If production reaches 12mtpa, the EV/EBITDA multiple falls to just 3x. AGO is better placed than peers to weather further iron ore price falls. At current levels, it could well be a target for larger diversified blue chip miners.
november short term trading part 2, page-139
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