We all learned from last few years that any company carrying a large amount of debt is deadly.
The 2300 million debts OST is carrying could explode one day if iron ore price drop below $100 per ton in 2-3 years time. It's amazing to me that the company still choosing to pay dividend over reducing debt. I doubled my investment in WPG last year. But after WPG sold their iron ore business to OST, I stayed away from OST for this reason. Yes, OST has other low margin and loss making steel businesses apart from exporting iron ore but they aren’t going to contribute much to its profit. Therefore, the risk of holding OST is far greater than possible reward or upside. I bet you OST will fall back to 75c once the short "hypo" of this stock is gone.
OST Price at posting:
95.0¢ Sentiment: Sell Disclosure: Not Held
