more on the special divi/buyback scenario... this is GSJBW's take:
Investment View: • We note earnings multiples are a misleading indicator for OZ Minerals. The stock should be evaluated using cash flow multiples following the non-cash (P&L only) effect of the revaluation and thus higher depreciation of the ZFX asset base following the merger. • Although OZ Minerals remains armed with a significant war chest of ~A$1.2bn, we believe the company is cognisant of the share price impact in overpaying for an investment. • In our view, the company is more likely to return cash back to shareholders via a special dividend or a share buyback at current levels. • The next key catalyst for OZ Minerals is the successful delivery on Prominent Hill on time (4Q FY08) and the revised budget (A$1.08bn), together with ramping up Avebury successfully. • No change to our BUY recommendation.
OXR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
