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.
OZL Price at posting:
$3.95 Sentiment: None Disclosure: Not Held