It may be lucky that APG diversified into iron and acid regeneration and sold WIM150.
From RBS:
Iluka – Downgrades starting to come….
The market continued to sell ILU yesterday as more analysts downgrade the stock and reduce their price target. We continue with our note yesterday to sell ILU with expected market weakness given offshore lead and ILU has broke through some support levels.
Bloomberg reports that Iluka said that third-quarter mineral sands sales fell 58 percent as the Perth-based company cut output on weaker demand. Goldman Sachs now rates the company a sell from buy in a report yesterday, citing the deteriorating price outlook for zircon as China’s property sector slows.
“The zircon market will be oversupplied for an extended period,” said Goldman Sachs analysts led by Ian Preston. Goldman Sachs lowered their 12-month share price target for Iluka to A$7.33 and put the stock on a sell from a previous recommendation of a buy.
Iluka cut its full-year sales estimate for zircon by as much as half to between 200,000 metric tons and 300,000 tons in July, citing declining demand in Asia, which accounted for 49 percent of its 2011 sales.
Tronox, which is a North American pigment producer, was off more than 24% the other night after it reported their results which disappointed the market. The market had been looking 3Q revenue of $610.8m however they delivered $487.3m and EBITDA of $131.1m vs. estimated of $190.3m. The market was also expecting Tronox to announce a special dividend of $2.50 per share which it did not deliver. Domestically, Bloomberg reports that Alkane and Mineral deposits have also had their recommendations downgraded by Goldman Sachs.
APG Price at posting:
3.7¢ Sentiment: Buy Disclosure: Held
