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Into 2017 and beyond, page-2

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redsceptre

5,336 Posts.

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22/09/16

10:32

Post #: 19338674
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Originally posted by asx_dude ↑

MT-LT IO chart shows IO is about to bounce of this temporary low of 54.

In opinion:
I expect IO to be in the 60s very soon and next year average 70-80s as all the supply doom stories have been factored in already in fact squashed by the companies which are 'apparently' adding supply when in fact Vale is simply replacing its own inefficent tonnes and Roy is a slow ramp up not expected to impact markets.

Going long MT/LT for commodities is the new commodity short of old. All globally leading surviving IO companies with lowest costs BHP, RIO, Vale, FMG, BCI and AGO are now currently cash cows as emerging demand (Asia, India, US. Europe) increases and China remains robust to the 'surprise' of bears. There is no denying the improving balance sheets and debt reduction of all these top companies (big and small). The thing is as these companies turn the bearish corner and some learn the hard lessons over the last few years (eg. too much debt), risks such as failing debt repayments will no longer be such a major concern for smaller IO companies looking into the future. Profits (and how much) will be of focus and good old investor returns (capital gains and generous divis) rather than volume expansions beyond replacing their own out of life mines (to maintain current output). Shorters who expect the IO doom to last LT are in for a rude awakening. Volatility is reducing and its only the beginning for the commodity market in a new LT upward trend which started early this year. The gains on commodities and IO over the next few years will make many in vogue Tech Stocks / Financial Stocks / Bio stocks look like overpriced investments ready for their very own big short. Hence why my opinion is you will see big money being poured back into commodities and ESPECIALLY aussie miners who ARE the world leaders.

Holders don't need luck, just patience as many IO Stocks are still set to soar as big money moves back into solid money generating sectors such as commodities. Many double and ten baggers to be had for sure in this space. Some companies which have opportunity with increasing profits may choose to diversify spreading risk. eg. I expect AGO to soon explore its Lithium potential while churning out cash from IO and accelerating debt repayments very quickly. I expect FMG and BCI to also explore other opportunities out of IO (IO their biggest cash generator). Diversication Options give leverage which can be turned into asset sales, JVs, profit share and risk management. Happy to be holding all these companies and many others in the resources space.

IO Forecasts by end of year 2017
FMG $8-10 per share
BCI $2-3 per share
AGO 20c per share (with current dilution) / $1.20 (post consolidation)

Good luck all no matter your investment style. We're all here to make money...

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what projected earnings or multi-project NPV underpins a $2B valuation in 12 months time?

AGO Price at posting: 1.0¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

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Into 2017 and beyond, page-2

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