full-tilt & Sagaro,Goldman Sachs forecast of 2015 IO=$US80 HAS...

full-tilt & Sagaro,

Goldman Sachs forecast of 2015 IO=$US80 HAS TO BE SEEN with their corresponding currency forecast of 0.80!

Ari's Steel EBITDA will increase to $150 to $200m with a currency of 80 cents. That is being conservative looking historically.

So if you (ie GS) have that forecast ARI is a great buy below $2.00.

The share price has fallen since results day intra high $1.875 because...

1) Lower Iron ore Price (obviously). It was $US124 on the 18th Feb and has fallen since.

2) Update said EBITDA Mining Consumables would be down $15m and Steel would be positive to $30m. Given Steel should have benefited from a $20m cost saving this was quite negative.
Together that's maybe $45 of EBITDA for the half.

It has nothing to do with Goldman Sachs or shorting (ASIC data 1.6% short)

Should ARI be at 90 cents, of course not. Maybe $1.30 ish which is NTA given the sector sentiment.

Re: Takeover. Anyone with basic financial skills can see overwhelming value in their assets and cash flow.

I would be amazed if a $1.50 bid was recommended by the board. A bid at 10x FY15 consensus earning of 20 cents, so takeover at $2.00 might.

If the currency was 80-85 cents which resulted in Steel being EBIT positive (EBITDA > $100m) then around $3.00 would be required. About the book value of assets on the balance sheet.

I think the very low ASIC short interest is because the risk to a takeover is too high to be short ARI.