a sinking ship!, page-3

Fluffy,

Buying OZL is basically buying just the copper price. A quick run through the numbers and $4 is a punt IMHO.

I do not follow OZL except for the odd passing glance, but this stands out.

2012 Revenue was $986m and the average price was $3.61 a pound.

If copper falls 20%, ie around $2.90 a pound, revenue will fall to around $800m. Given EBIT was around $200m, this would see EBIT around $0.

Copper is currently around $3.10. If copper continues to fall, then I don't think the market will be kind to the share price. The opposite is true as well. If copper bounces back to $3.60, then buying now looks smart.

As I said, looks more like a punt on the copper price more than anything else.