The fundamentals for MCR has not changed. It is a well run company which produces excellent cash flow, pays a dividend and has no debt. The price has been affected due to the continuous drop in nickel prices which will eventually bottom, and this may not be too far away. MCR have advised they will be increasing their nickel production in 07/08 so their revenue and EBIT will still be strong as a result of additional nickel.
Nickel is still in high demand so one needs to ask the question what is the main reason behind the drop in nickel prices. The forces that control the market are at play here, once again, and we are being tested.
Whilst I am disappointed I didn't anticipate the drop in MCR or nickel stocks to be so dramatically, I will be content to sit tight and once I feel a bottom is confirmed I will look at adding to my existing portfolio.
Another thing to consider is MCR has only recently been included in the ASX 200 which should gain some support from institutions I would expect.
MCR Price at posting:
0.0¢ Sentiment: None Disclosure: Held
