qube in derby, wa, page-5

Credit Suisse has put freight and logistics provider Qube into its short portfolio, citing high valuation and the exposure to higher cost iron ore producers as reasons for possible share losses:

• We are tempting fate once again and starting a short position in a market darling. Qube has a great track record of  delivering growth, our own analyst forecasts double digit EPS gains over the next two years and management are highly regarded.
• However, there are a  number of concerns that support our short position. The company is not cheap. The stock trades on a top quintile PE ratio of 22x and a bottom quintile dividend yield of 2.4 per cent.
• Qube is a serial equity issuer — it has raised its share count every year since listing. Importantly, Paul Butler is concerned  about the company's exposure to higher cost iron ore producers. Atlas Iron  and Arium make about 10 per cent of Qube revenues. With a weaker Chinese growth outlook and falling iron ore prices we believe there is a growing risk  that Arium will close one of its mines.

Read more: http://www.smh.com.au/business/markets-live/markets-live-dollar-at-4year-low-20141107-3jsig.html#ixzz3ILRtx0Lq