SFR is a unusual investment, i am happy to say i am wrong having entered this much higher, however I dont see why we trade at these prices
This announcement had an increase in guidance and a decrease in ASIC. At near 10 year lows, any good news warrants a bounce.
Yet here we are 8% lower..
Why?
64m EBITA a quarter - 200m a year x p/e 10 = 2b which is well above market cap.
Its feel the market will not change direction until we get over the life of mine issue. I expect once Degrussa shuts down and quarterlies continue to be positive, it will remove this unfair overlay. Alternatively an expansion of Matsa life of mine along with new assets will create this outcome
Ultimately the market is a factor of value + emotion - At present emotion is taking us below value. we bought matsa for us 1.86b when copper was 4.41, its now 3.36 implying a discounted value of 1.4b US.
Our market cap with 4 months of Degrussa + Matsa + Motheo + blackbutte is less than the value of Matsa.
Market has it wrong and it wont change until Life of mine is not a consideration and shorters let go of this unknown
This is a quality copper producer and imo a continuously buying strategy is whats needed.
Id love for someone to explain why SFR is only worth 1.5b
SFR Price at posting:
$3.37 Sentiment: Buy Disclosure: Held
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