the good and the bad

On the bad side, earlier the week UBS downgraded MCR to sell from neutral citing cost blow outs, a rising $AU and decreasing earnings.

They have a price target of 90 cents.

They still expect a full year dividend of 4 cents, implying a 2 cent final dividend.

On the good side, the Eureka report ranked MCR as one of their top 5 picks form Diggers and Dealers.They cite MCR as a recovery story, strong management, lotsa cash and the prospect of gold. They expect a strong recovery in the next 12 months.

I'm more of the view of Eureka than UBS. I think UBS missed the boat with the downgrade - something they should have done back in March if they wanted to be helpful.

Most of the bad news is factored in. As I said before, GFC II is not factored in, but I don't see things going much below the current SP without a GFC II.

Not sure what they mean by a 'strong' recovery, but I see the current scenario as supporting $1.20 -$1.30 and more if the gold prospects work out.