Taken from the FMG forum....... ======================================
11 iron ore "winners"
Robin Bromby | August 12, 2009
Article from: The Australian
TAKE the possible 21 iron ore stocks - outside the two Pilbara majors, of course - and Petra Capita of Sydney has found 11 they can recommend as value buys.
The broker tried to make it a level playing field - comparing apples with apples, if you like - by converting magnetite resources to their haematite equivalent; they did the sums on the amount of beneficiation required to produce a concentrate. Current benchmark iron ore prices were used to calculate enterprise value and that was all mixed up with expected EDITDA for the companies concerned.
Then they were handicapped into three divisions by market cap - one above and two below the $500 million threshold.
Four got the big tick in the heavyweight category: Murchison Metals with its Jack Hills project in the Mid West region of Western Australia; Gindalbie Metals which is also in that region with its Mungada and Karara projects; Fortescue Metals Group, the “new force” in the Pilbara; and Mount Gibson Iron which has Tallering Peak, Koolan Island and Extension Hill.
Middleweight contenders that got the nod from Petra Capital were Brockman Resources with its Pilbara iron ore deposit, Sundance Resources toiling away in tropical Cameroon, Northern Iron - a surprise winner - with the Sydvaranger deposit in Norway and - back to the Pilbara - United Minerals Corp.
In the lightweight division, there’s Western Plains Resources drilling away in the South Australia at Peculiar Knob and Buzzard, Strike Resources over there in Peru, BC Iron which has kneeled at the foot of FMG in return for access to the latter’s Pilbara railway and as a consdequence will be in production next year, and Flinders Mines and its Hamersley project. In regard the last mentioned, FMS yesterday received a speeding ticket from the ASX, the company responding that the price and volume surge may have been due to a new broker’s report.
It was interesting to see which companies got taken out in the cull. Notably there was Atlas Iron which is one of the great Pilbara junior success stories - but remember, this was all about finding stocks that are still value buys, not ones whose achievements and prospects have already been factored into their price.
BRM Price at posting:
$1.25 Sentiment: LT Buy Disclosure: Held