The only positive I'm feeling at the moment is Allan Grey piling into the stock. They've spent $82.4m on ARI shares at an average price of 33.7c. Based on current sp they are currently 18.5% underwater, or down $15.2 million, within half a month of their announcements. In the media they've been quoted as saying they believe the mining consumables business will be profitable and the steel business will return to profitability 'in the fullness of time'. They pointedly said they weren't buying ARI because they saw value in the iron ore business. On this basis they stated that a ~34c entry point gave them comfort there was sufficient margin for error. Current events in the market can hardly be a surprise to them and given the falling knife ARI has been there must have been a high threshold level of due diligence - most likely with direct access to the company (who would be desperate for any kind of institutional support, and who would be potentially (likely?) to be more forthcoming privately than the very limited information/views they announce publicly).
My only confidence in ARI at the moment is based on investors of this calibre not being silly enough to torch over $80 million under these circumstances.
ARI Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
