"
Hudson can actually see upside in the stock from here, thinking a lowerdollar and a recovery in domestic demand will take the stock up to 62c.
Every 1c fall in the dollar adds about $17.5m in earnings before interest and tax.
The stock is trading at four times forecast 2015 earnings before interest, tax, depreciation and amortisation, which puts it against Bradken at 5.5 times, Fortescue at 3.9 times, BlueScope at 5.5 times and Sims at 6.3 times.
If the stock has hit a natural floor that is no thanks to the extraordinary mismanagement of Smedley’s team, even if the cash is now in the door.
Arguably the very fact the capital was raised has saved Arrium, which from its inception when spun out of BHP has always been the debt-ladened problem child."
ARI Price at posting:
34.7¢ Sentiment: Buy Disclosure: Held
